The Supreme Court ruled Section 3-J of the National Highways Act unconstitutional, affirming landowners' right to solatium and interest, recognizing it as a constitutional obligation of the State.

1. The short point involved in this batch of 69 petitions concerns the entitlement of the petitioners to solatium and interest on the compensation paid to them for the acquisition of their lands under the provisions of National Highways Act (henceforth would be referred to as the Act).

2. A Note on Legislative History:
A travel through the lane of legislative history may help capturing the setting in which the petitioners rest their cause for the present action. On 24-01-1997, the President of India promulgated the National Highways Laws (Amendment) Ordinance, 1997 by which S.3 - A to 3 - J were inserted into the National Highways Act, 1956. These provisions provide for a mechanism for speedy acquisition of land for the construction of national highways and also for a speedier resolution of disputes relating to determination of compensation through a mechanism of statutory arbitration as contemplated in S.3 - G of the Act. S.3 - G (7) of the Act sets out the relevant criteria which the arbitrator must take into account in determining the compensation under the Act. S.3G(7) roughly corresponds to S.23(1) of the Land Acquisition Act, 1894. S.3 - J, which, as would be seen has become the epicentre of the present lis, specifically declared that nothing in the Land Acquisition Act, 1894, would apply to an acquisition under the National Highways Act, 1956. As S.3G(7) imported only the elements of S.23(1) of the L.A Act for determination of compensation, S.3 - J had the effect of excluding the benefit of the additional compensation under S.23 (2) statutorily computed at 30% of the market value (commonly known as 'solatium', and hence would be referred to as such in this order) and interest under S.28 of the Land Acquisition Act. The ordinance was replaced by the National Highways Laws (Amendment) Act, 1997 (Act 16 of 1997). This position continued till 01.01.2015 when the Right to Fair Compensation & Transparency in Acquisition, Rehabilitation and Resettlement Act, 2013 made solatium and interest payable for acquisitions under the National Highways Act as well (vide S.105). To complete the narration, recently in Project Director, NHAI Vs Hakkim [2021 Scc Online 473], the Hon'ble Supreme Court has travelled far enough to hold that the entire amendment introduced in 1997 to the National Highways Act is discriminatory, but stopped short of declaring it as unconstitutional as its vires was not challenged before it. The legislative history concludes here.

3.1 S.3 - J and Constitutionality - The Journey:
The constitutional validity of S.3 - J was first called into question before the Karnataka High Court in Lalita v Union of India [ILR 2002 Karnataka 259]. Following the judgments of the Supreme Court in Vajaravelu Mudaliar v Special Deputy Collector, Madras [AIR 1965 SC 1017] and Nagpur Improvement Trust v Vithal Rao [AIR 1973 SC 689], the Karnataka High Court, by an order dated 11.10.2002, struck down S.3 - J as violative of Art.14 of the Constitution. However, in 2005 a Division Bench of the Rajasthan High Court in Banshilal Samariya v Union of India [2006 Supp R.L.W 559] dissented from the view of the Karnataka High Court and upheld the validity of S.3 - J, partly on account of the fact that the decision of the learned single judge of the Karnataka High Court had been stayed by a Division Bench of the same Court in W.A 6115 - 17 of 2002. A few years later, a similar challenge arose before the Punjab and Haryana High Court in Golden Iron and Steel Forging vs Union of India [2008 SCCOnline P&H 498], and a Division Bench of the said Court struck down S.3 - J of the Act as violative of Art.14. Its reasoning was along the lines of Karnataka High Court in Lalita case.
3.2 Following the judgment in Golden Iron and Steel case [2008 SCC Online P&H 498], a learned Single Judge of this Court struck down S.3 - J of the Act in Chakrapani v Union of India [(2011) 7