The Supreme Court on Wednesday declined to review its ruling to retroactively award bonus and interest to landowners under the National Highways Act, while setting a specific framework that limits the reopening of claims and provides a clear deadline of March 28, 2008.
A bench of Chief Justice of India Surya Kant and Justice Ujjal Bhuiyan upheld its 2019 judgment as well as its order of February 4, 2025, and refused to reconsider the basic finding that landowners are entitled to solatium and interest notwithstanding acquisitions made under the special regime of the National Highways Act, 1956.
The court dismissed the review application filed by NHAI and held that the financial implications, even amount to an extent $29,000 crores, cannot weaken the constitutional guarantee of just compensation.
The ruling, delivered by the CJI, said the court was not persuaded to reconsider its earlier decision despite NHAI’s contention that the financial burden expected earlier was based on a clerical error. The Authority revised the estimate of its liabilities from a much lower figure to an approximate figure $29,000 Crores.
However, the Court held that “a mere escalation of anticipated obligations, no matter how significant, does not constitute a valid basis for review,” emphasizing that financial considerations cannot override the fundamental rights of land losers.
The judgment reaffirms the court’s 2019 ruling in Union of India Vs Tarsem Singh, wherein Section 3J of the National Highways Act, 1956 was effectively neutered to create a discriminatory remedy by depriving landowners of benefits and benefits. The court confirmed that those whose lands were seized between 1997 and 2015 are entitled to these benefits in line with the Land Tenure Act 1894 and the Land Tenure Regulations 2013.
The ruling is expected to have broad ramifications across the country, particularly in states with significant highway takeover activity, as it resolves a long-standing tension between ensuring equality of compensation and preserving the finality of concluding actions.
The court traced the controversy back to its landmark 2019 judgment in Union of India v. Tarsem Singh, wherein Section 3J of the National Highways Act was declared unconstitutional to the extent of depriving land owners of benefits and benefits. This provision, introduced in 1997, effectively excluded the statutory benefits of acquisitions under the Highway Act, resulting in unequal compensation when compared to acquisitions under the Land Acquisition Act.
Although it refused to interfere with the basic principle of retrospective entitlement, the bench made it clear that not all claims would be treated equally, particularly where proceedings had long since reached an end. The court stressed the need to balance equality and legal certainty, and held that concluded cases cannot be reopened simply because the law has been clarified since then.
The court drew a decisive line on March 28, 2008, the date of the judgment of the Punjab and Haryana High Court in the Golden Iron & Steel Forgings case, which struck down Section 3J. It ruled that only landowners whose claims for compensation were “still subsisting” on or after that date, and pending before a competent authority, arbitrator or court, were entitled to request the addition of the bonus and interest on the bonus.
At the same time, the court addressed concerns about late claims. It held that when landowners file claims for these benefits after a long delay, they will not be entitled to benefit for the period of such delay. In such cases, benefit will only accrue as of the date the claim is actually made, which reflects the principles applied in late appeals for enhanced compensation.
For claims that reached finality before March 28, 2008, with no pending proceedings or further appeal, the court peremptorily barred the reopening of the claim. It held that such landowners would not be entitled to seek review, amendment or submit new claims to benefits or benefits, emphasizing that “old and meaningless claims” could not be revived on the basis of subsequent judicial interpretation.
In a subsequent trend, the Court overturned some of the Supreme Court’s rulings and remanded the matters to recalculate the compensation in strict accordance with its directions. He also clarified that the amounts already paid for bonus or interest will not be subject to recovery by NHAI or the Union government.
