Union of India v. Tarsem Singh: Section 3-J of the National Highways Act and the right to solatium and interest

Two owners, one strip of land, unequal pay

Compulsory acquisition compensates an owner for land taken against her will. In India two statutes long ran in parallel. The general Land Acquisition Act, 1894 paid the market value of the land plus a solatium — an additional sum, fixed at thirty per cent of market value under Section 23(2), to recognise that the taking is forced rather than voluntary — together with an additional amount under Section 23(1A) and interest for delay under Section 28. The National Highways Act, 1956, by contrast, set up its own acquisition machinery for road projects. When Section 3-J was inserted into the highways statute in 1997, it declared in terms that "nothing in the Land Acquisition Act, 1894 shall apply" to an acquisition under the highways law.

The practical consequence was stark. Two neighbours whose adjoining fields were taken in the same season could receive materially different sums for identical land: the owner acquired for an ordinary public purpose under the 1894 Act got market value plus solatium plus interest, while the owner acquired for the national highway got the bare compensation the highways machinery allowed, shorn of solatium and shorn of interest. The classification that produced this gap was not the owner's conduct or the character of the land, but only the label of the acquiring statute.

How the question reached the Court

The dispute crystallised in the Punjab and Haryana High Court, which took the view that denying solatium and interest to highway acquisitions — benefits routinely paid to owners acquired under the 1894 Act — could not stand. The Union of India carried the matter to the Supreme Court, defending Section 3-J and its exclusion of the 1894 Act. A two-judge bench of Justices Rohinton Fali Nariman and Surya Kant heard the appeals and delivered judgment on 19 September 2019, with Justice Nariman writing for the Court.

The Court also had before it a shift in the wider law. In 2013 Parliament replaced the 1894 Act with the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, a statute deliberately more generous to landowners. From 1 January 2015 the 2013 Act's compensation provisions were extended, by notification, to acquisitions under the National Highways Act as well. So Section 3-J's exclusion had a natural terminus: it operated in the window from 1997 to the start of 2015, after which highway acquisitions themselves attracted the higher, fairer regime.

The Article 14 reasoning

The Court's analysis rested on equality. Article 14 forbids treating likes unalike without a rational basis tied to the object of the law. Once land is compulsorily taken, the owner's loss — and the element of compulsion that solatium exists to soften — is identical whether the road being built is a state highway acquired under the 1894 Act or a national highway acquired under the 1956 Act. There is no intelligible reason connected to any legitimate purpose of the highways statute for paying the second owner less than the first for the same expropriation.

The Court held that Section 3-J, to the extent it stripped away solatium and interest, drew exactly this kind of arbitrary distinction between two classes of expropriated owners and therefore failed the Article 14 test. Importantly, the Court did not strike down Section 3-J wholesale; it read the provision down, invalidating only the exclusion of solatium and interest while leaving the rest of the highways acquisition machinery intact. The remedy was corrective, not destructive: it filled the gap by making the 1894 Act's solatium and interest provisions applicable to highway acquisitions during the relevant window, rather than dismantling the special statute.

What owners get, and for which years

The upshot is a defined entitlement for a defined class. An owner whose land was acquired under the National Highways Act between 1997 and the end of 2014 is entitled to the benefits the 1894 Act would have given — solatium under Section 23(2), the additional amount under Section 23(1A), and interest under Section 28 — notwithstanding Section 3-J's blanket exclusion. For acquisitions from 1 January 2015 onward, the point is academic, because the 2013 Act's own, more generous compensation code already governs highway takings.

Read against the broader arc of land-acquisition law, Tarsem Singh is the bridge between the two regimes. It prevents the highways statute from becoming a pocket of sub-standard compensation sandwiched between the 1894 Act it displaced and the 2013 Act that eventually caught up with it. The principle it enforces — equal treatment of expropriated owners, and a floor of solatium-plus-interest that a special acquisition law cannot quietly remove — is the doctrinal counterpart, on the compensation side, to the finality and lapse questions worked out under Section 24 of the 2013 Act.

The 2025 sequel

The decision generated a large downstream liability, and the National Highways Authority of India later sought to blunt it. In a February 2025 ruling (reported as 2025 INSC 146), a bench headed by Justice Surya Kant declined to confine Tarsem Singh to prospective operation. The Authority argued, among other things, that the accumulated liability had ballooned far beyond early estimates; the Court held that a mere escalation in projected financial exposure is not a ground to reopen a settled constitutional holding, and that carving out a prospective-only reading would nullify the very relief Tarsem Singh was meant to deliver. The 2025 order is a clarification and defence of the 2019 principle, not a new rule — the substantive law on Section 3-J remains what the 2019 bench declared.

Why the decision matters

For landowners and their counsel, Tarsem Singh is the marquee authority whenever compensation for a national-highway acquisition in the 1997–2015 window is in issue: it supplies both the entitlement to solatium and interest and the constitutional reasoning that secures it. For acquiring authorities, it is a caution that a special statute cannot silently deny an expropriated owner benefits that the general law treats as basic to a forced taking. And for constitutional practice, it is a clean worked example of reading a provision down under Article 14 — excising only the discriminatory exclusion while preserving the workable core of the statute — and of harmonising successive acquisition regimes so that no class of owners falls through the gap between them.

Related on Valkya

• Indore Development Authority v. Manoharlal
• DDA v. Tejpal: Section 24(2) lapse
• Property Owners Association v. State of Maharashtra

Sources

1. Supreme Court of India — Union of India v. Tarsem Singh, review order dated 4 February 2025 (2025 INSC 146), restating the 2019 holding: api.sci.gov.in judgment PDF
2. LiveLaw — Supreme Court refuses NHAI's plea to review retrospective application of solatium to NH acquisitions: livelaw.in
3. SCC Times — SC reaffirms principles of solatium and interest laid down in Tarsem Singh (2019): scconline.com/blog
4. Verdictum — Supreme Court dismisses NHAI review petition in Tarsem Singh case (2025 INSC 146): verdictum.in
5. Fox Mandal — SC upholds retrospective application of the 2019 ruling on solatium: foxmandal.in