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

The Supreme Court ruled on Wednesday, March 25, 2026, that the financial consequences of granting solatium and interest in land acquisition matters cannot override the fundamental rights of those who lose the land.

A bench headed by Chief Justice of India Surya Kant observed in its judgment: “There is no doubt that the Constitutional guarantee of just compensation cannot be made conditional on the magnitude of the financial burden. Consequently, a mere increase in the envisaged liability, however significant, does not by itself constitute a valid ground for review or modification of the award.”

The decision was based on a review petition filed by the National Highways Authority of India (NHAI) seeking a declaration that the 2019 verdict stating that solatium and interest are applicable in land acquisitions for highways would apply only prospectively.

Writing the order, the Chief Justice said NHAI had argued that the financial liability arising from solatium and interest would be high, around ₹ 29,000 crore.

In a series of directions, the high court ruled that landowners whose cases regarding determination of compensation were pending before the competent authority or court as on March 28, 2008, will have the right to claim solatium and interest in accordance with the law.

He explained that where enhanced compensation is granted but the issue of solatium and interest is not specifically requested or decided, landowners may seek such relief, subject to applicable legal principles. However, interest on such components is payable only from the date on which the solatium or interest claim is made.

On the other hand, the upper court announced that cases concluded before March 28, 2008 would not be reopened, and warned that uninterrupted reopening of trials would only weaken the certainty of the case.