Supreme Court Upholds Right to Just Compensation, Rejects NHAI Review Plea

The Supreme Court on Wednesday reaffirmed that the constitutional guarantee of just compensation cannot be diluted, ruling that payment of solatium and interest in land acquisition cases cannot depend on the financial burden involved. A bench comprising Chief Justice Surya Kant and Justice Ujjal Bhuyan dismissed the National Highways Authority of India’s (NHAI) plea seeking a review of the court’s February 4, 2025 judgment, which upheld retrospective compensation and interest for land acquired under the NHAI Act. The court clarified that interest payable to landowners would follow the Land Acquisition Act rate of 9%, rather than the 5% cap under the NHAI Act.

Rejecting NHAI’s argument that the financial liability could reach nearly ₹29,000 crore, the bench stated that “mere projection of financial liability does not constitute a valid ground for review.” The court emphasized that solatium and interest are integral to fair compensation and cannot be denied on fiscal grounds. It reiterated that excluding such benefits would violate Article 14 of the Constitution, which guarantees equality before the law.

However, the apex court introduced a key limitation, stating that while landowners are entitled to solatium and interest, settled claims that have attained finality cannot be reopened. The bench highlighted the need to balance landowners’ rights with legal certainty, noting that endless reopening of concluded cases would disrupt judicial consistency. The court also indicated that pre-2018 land acquisition cases cannot be revisited, ensuring clarity on the scope of retrospective benefits.

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