SC declines NHAI plea, says fiscal burden no ground to deny compensation

The Supreme Court on Wednesday (March 25, 2026) held that the fiscal implications of granting solatium and interest in land acquisition matters cannot override the substantive entitlement of the land-losers.

“There is no gainsaying that the Constitutional guarantee of just compensation cannot be rendered contingent upon the magnitude of the financial burden. Consequently, a mere escalation in the projected liability, however significant, does not constitute, per se, a valid ground for review or modification of the judgment,” a Bench headed by Chief Justice of India Surya Kant observed in a judgment.

The verdict was based on a review petition filed by the National Highways Authority of India (NHAI) for a declaration that a 2019 judgment, which held that solatium and interest applicable to land acquisitions for highways, would apply only prospectively.

The Chief Justice, who authored the judgment, said the NHAI had argued that financial liability from solatium and interest would be high at around ₹29,000 crore.

In a series of directions, the apex court held that land owners whose proceedings relating to the determination of compensation were pending as on March 28, 2008, before the competent authority or court would be entitled to claim solatium and interest in accordance with law.

It clarified that land owners in cases in which enhanced compensation was granted, but the issue of solatium and interest had not been specifically claimed or adjudicated, could seek such benefits, subject to applicable legal principles. However, interest on such components would be payable only from the date on which the claim for solatium or interest was raised.

On the other hand, the apex court clarified that there would be no reopening of cases concluded prior to March 28, 2008, cautioning relentless reopening of proceedings would only undermine the certainty of litigation.