A) ABSTRACT / HEADNOTE

The Supreme Court, by its order dated 04 February 2025 in Union of India & Anr. v. Tarsem Singh & Ors., considered whether the relief declared in Union of India v. Tarsem Singh (2019 9 SCC 304) should operate prospectively or retrospectively in the context of acquisitions under the National Highways Act, 1956. The National Highways Authority of India (NHAI) sought a declaration that the outcome in Tarsem Singh be made prospective so as to foreclose reopening of acquisitions concluded between 1997 and 2015 where solatium and interest were not awarded because of the operation of s.3J of the NHAI Act.

The Court rejected the plea for prospectivity, emphasising that prospectivity would perpetuate an unjust classification between two homogeneous classes of landowners (those acquired during 1997–2015 and others) and would thereby offend Article 14. The Court reiterated that s.3J which excluded application of the Land Acquisition Act, 1894 to NHAI acquisitions and thereby denied solatium and interest created unequal treatment that had been remedied by the judgment in Tarsem Singh. The Court held that granting prospectivity would nullify the remedial aim of Tarsem Singh; it would not amount to reopening settled cases in the sense of re-litigating merits or declaring past acquisitions void, but would require the grant of the statutory benefits of solatium and interest to affected landowners.

The Miscellaneous Application was dismissed and directions issued to the Competent Authority to compute solatium and interest in accordance with Tarsem Singh.

Keywords: Land Acquisition, Solatium, Interest, Article 14, Section 3J (NHAI Act).

B) CASE DETAILS

C) INTRODUCTION AND BACKGROUND OF JUDGEMENT

The litigation stems from the insertion of s.3J into the National Highways Act, 1956 by the National Highways Laws (Amendment) Act, 1997. S.3J declared that “nothing in the Land Acquisition Act, 1894 shall apply to an acquisition under this Act”, thereby creating a distinct statutory regime for NHAI acquisitions and excluding benefits such as solatium and interest that the 1894 Act provided under ss.23 & 28. Several High Courts struck down s.3J as unconstitutional because it produced unequal treatment between landowners whose land was acquired by NHAI and those whose land was acquired otherwise.

The Right to Fair Compensation Act, 2013 subsequently extended its applicability to NHAI acquisitions from 01.01.2015 (via Ordinance and notification), shortening the functional life of s.3J but leaving a discrete gap (1997–2015) where many acquisitions had taken place without solatium and interest. The Supreme Court in Tarsem Singh (2019) held s.3J violative of Article 14 and directed parity in awarding solatium and interest. The present Miscellaneous Application by NHAI sought clarification that Tarsem Singh operate prospectively to avoid reopening concluded matters and financial exposure. The Court evaluated the constitutional dimensions equality under Article 14, doctrine of finality, consequences of retroactivity, and the legislative overlay of the 2013 Act to determine whether prospectivity would be lawful and just.

D) FACTS OF THE CASE

Between 1997 and 2015 NHAI acquired numerous parcels of land under the NHAI Act without applying the Land Acquisition Act, 1894, by reason of s.3J. Consequently, affected landowners were not paid solatium or interest. Post-2002 several High Courts invalidated s.3J in individual matters (e.g., Lalita v. Union of India), and litigation persisted. The 2013 Act came into force on 01.01.2014 and, through amendment and subsequent notification, its provisions were made applicable to NHAI acquisitions with effect from 01.01.2015, thereby granting statutory benefits to acquisitions post-that date.

The Supreme Court in Tarsem Singh (decided 19.09.2019) declared s.3J unconstitutional and held that solatium and interest were payable to those excluded by s.3J. Following Tarsem Singh, numerous High Courts directed NHAI to award solatium and interest or to reconsider representations. NHAI filed the present Miscellaneous Application seeking that Tarsem Singh be given prospective effect only contending that retrospective application would force reopening of settled acquisitions, impose substantial financial burden (estimated by NHAI to be crores), and violate finality principles and Gurpreet Singh precedent.

Landowners, by contrast, urged that prospectivity would perpetuate arbitrary disparity among similarly situated landowners and thus violate Article 14. The Court had to balance remedial equality against concerns of finality and fiscal impact.

E) LEGAL ISSUES RAISED

1. Should the Supreme Court’s decision in Tarsem Singh be applied prospectively only, or does it operate retrospectively so as to afford solatium and interest to landowners whose land was acquired by NHAI between 1997 and 2015?

2. Does applying Tarsem Singh retrospectively contravene the doctrine of finality or create an impermissible reopening of concluded acquisitions?

3. Would prospective operation create an impermissible classification violative of Article 14 by treating landowners differently based solely on dates beyond their control?

F) PETITIONER / APPELLANT’S ARGUMENTS

The NHAI (Applicant) through the Solicitor General submitted that:

(i) Tarsem Singh should operate prospectively from 19.09.2019 to avoid reopening concluded matters;

(ii) retrospective application would oblige the State to compensate all claimants from 1997–2015, causing substantial fiscal burden;

(iii) reopening settled awards would violate the doctrine of immutability and principles of delay and laches; and

(iv) Gurpreet Singh v. Union of India supports prospective application to protect finality.

G) RESPONDENT’S ARGUMENTS

Counsel for landowners countered that:

(i) prospectivity would perpetuate unconstitutional discrimination between similarly situated landowners and hence infringe Article 14;

(ii) Tarsem Singh was decided to remedy the unequal treatment arising from s.3J and limiting it to prospectivity would negate that relief;

(iii) the Government’s prior representations and concessions (in earlier proceedings) preclude reversal; and

(iv) granting solatium and interest is a confined remedial exercise and does not amount to reopening merits or invalidating past acquisitions.

H) JUDGEMENT

The Court dismissed the Miscellaneous Application. It held that making Tarsem Singh prospective would defeat the decision’s remedial and equalising purpose because it would leave two homogeneous groups of landowners those whose land was acquired between 1997–2015 and others in unequal positions absent any intelligible differentia. The Court emphasised that when a statutory provision is declared unconstitutional, the continuing disparity must be rectified rather than frozen by prospectivity. The judgment clarified that the relief ordered payment of solatium and interest does not equate to reopening finalized awards in the sense of re-litigating quantum or invalidating the acquisition; it merely recognises statutory benefits retrospectively.

The Court rejected the immutability argument: directions to pay benefits are not impermissible re-opening of merits. Financial burden alone cannot justify perpetuating inequality; fiscal considerations do not override constitutional mandates including Article 14 and Article 300A is not a shield to deny relief. The Court also observed that where acquisitions are under PPP models the ultimate financial burden would be absorbed by project proponents and commuters, not the State alone. Finally, the Court directed Competent Authorities to compute solatium and interest in accordance with Tarsem Singh, dismissed challenges to denial of Additional Market Value where appropriate, and disposed connected matters accordingly.

a. RATIO DECIDENDI

The decisive legal principle is that when a provision (here s.3J) is declared unconstitutional for violating Article 14, the remedial order must eliminate the unjust classification it created; prospectivity that preserves the discriminatory status quo is impermissible. The Court reasoned that solatium and interest are compensatory benefits integral to expropriatory statutes; awarding them retrospectively to those denied them does not amount to reopening merits or undoing finality but corrects an inequality struck down by the Court. Fiscal strain or administrative inconvenience cannot justify perpetuating unconstitutional discrimination.

b. OBITER DICTA

The Court observed by way of obiter that litigants should not use Miscellaneous Applications as tactical instruments to neutralise adverse precedents; Quando aliquid prohibetur ex directo, prohibetur et per obliquum what cannot be done directly should not be done indirectly. It further commented on the manner in which public-private models distribute costs and noted that project proponents and commuters would ultimately bear much of the economic impact.

c. GUIDELINES 

1. Tarsem Singh principles stand; solatium and interest to be paid to affected landowners whose lands were acquired by NHAI between 1997–2015.

2. Competent Authority to calculate solatium and interest in accordance with directions in Tarsem Singh and to decide representations where required.

3. Direction does not mandate reopening of the acquisition process or re-litigation of quantum except for computing solatium and interest.

4. Claims for Additional Market Value to be dealt with on merits; refusal of such additional component in certain matters upheld.

I) CONCLUSION & COMMENTS

The Court’s dismissal of NHAI’s plea for prospectivity underscores a fundamental constitutional axiom: remedies must correct inequalities created by invalid legislation rather than entrench them behind the cloak of procedural finality. The decision carefully narrows the remedial exercise awarding solatium and interest without annulling acquisitions thereby striking a pragmatic balance between finality and equality. Practically, the judgment imposes administrative and fiscal obligations but anchors these obligations within constitutional duty; the State cannot rely solely on the inconvenience of rectifying a wrong to resist compliance.

For practitioners, the ruling reiterates that where legislative exclusion produces a discrete discriminative class, courts will prefer retrospective relief to effectuate equality under Article 14. For administrators, it signals that prior assurances and piecemeal concessions do not permit a wholesale rollback. The decision is a clarion affirmation that remedial justice for statutory victims will not be truncated by a mechanistic invocation of prospectivity.

J) REFERENCES

a. Important Cases Referred

1. Union of India & Anr. v. Tarsem Singh & Ors., [2025] 2 S.C.R. 376 : 2025 INSC 146.

2. Union of India v. Tarsem Singh, (2019) 9 SCC 304. (As cited in judgment).

3. Gurpreet Singh v. Union of India, (2006) 8 SCC 457. (As cited).

4. Sunita Mehra v. Union of India, (2019) 17 SCC 672. (As cited).

5. Lalita v. Union of India, 2002 SCC Online Kar 569. (As cited).

6. T. Chakrapani v. Union of India, 2011 SCC Online Mad 2881. (As cited).

b. Important Statutes Referred

1. Land Acquisition Act, 1894.

2. National Highways Act, 1956 (esp. s.3J as inserted by the 1997 Amendment).

3. Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.