1. Dispute over computation of solatium, interest, and interest on solatium under National Highways Act between Land Acquisition Act, 1894 and Act of 2013. (Para 2 )
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2026 Supreme(Online)(SC) 1912
SUPREME COURT OF INDIA
K.VINOD CHANDRAN, J
Manav Bhanot – Appellant
Versus
National Highway Authority of India – Respondent
Civil Appeal No. of 2026 (Arising out of SLP (C) No.27541 of 2024)
Important Points
For land acquisitions under the National Highways Act, solatium and interest are computed under the Land Acquisition Act, 1894 if the Competent Authority's determination was made before 01.01.2015, and under the RFCTLARR Act, 2013 if made on or after 01.01.2015.
Subject
Land Acquisition - Compensation and Solatium
Act Referred
National Highways Act, 1956: S.3A, S.3C, S.3D, S.3E, S.3G, S.3H, S.3J
Land Acquisition Act, 1894: S.4, S.5A, S.6, S.11, S.18, S.28
Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013: S.23, S.24(1)(a), S.105
Land Acquisition Act, 1894: S.4, S.5A, S.6, S.11, S.18, S.28
Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013: S.23, S.24(1)(a), S.105
Headnote
(A) National Highways Act, 1956 - Sections 3A, 3C, 3D, 3G, 3H, 3J - Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 - Section 24(1)(a), Section 105 - Land Acquisition Act, 1894 - Section 11, Section 18 - Determination of solatium and interest for land acquired under the NH Act - Whether benefits should be computed under the Act of 1894 or the Act of 2013 - If the determination of compensation by the Competent Authority (akin to an award) was made before 01.01.2015, the benefits of solatium and interest shall be computed under the Act of 1894, even if the determination occurred after 01.01.2014, because the Act of 2013 became applicable to NH Act acquisitions only from 01.01.2015 via Ordinance and subsequent notification. (Paras 13, 23 and 24)
(B) Application of the Act of 2013 to other enactments - Section 105 provides a one-year hiatus for enactments specified in the Fourth Schedule (including the NH Act) before the beneficial provisions regarding compensation apply. (Paras 9, 17 and 23)
Facts of the case:
Land was acquired under the NH Act with notification under Section 3A on 07.06.2011 and a declaration under Section 3D on 20.01.2012. The Competent Authority determined compensation on 11.07.2014. The appellant disputed the quantum, leading to an Arbitrator's award on 13.01.2016. The central dispute was whether solatium and interest should be calculated per the Act of 1894 or the Act of 2013, given that the initial determination was in 2014 but the Arbitrator's award was in 2016.
Findings of Court:
The Court found that the determination made by the Competent Authority under Section 3G(1) of the NH Act is equivalent to the initial award under Section 11 of the Act of 1894. Since this determination was made on 11.07.2014 (prior to 01.01.2015), the Act of 2013 is not applicable for computing the rate of benefits.
Issues: Whether the claim for solatium and interest for acquisition under the NH Act should be computed under the Land Acquisition Act, 1894 or the RFCTLARR Act, 2013, specifically when the initial determination was passed after the 2013 Act's commencement but before its specific application to the NH Act on 01.01.2015.
Ratio Decidendi: The entitlement to solatium and interest for acquisitions under the NH Act depends on when the initial 'award' (determination by Competent Authority) was passed. If passed before 01.01.2015, the Act of 1894 applies; if after, the Act of 2013 applies. The subsequent Arbitrator's award does not change the applicable statute for computation as it is akin to a reference under Section 18 of the 1894 Act.
Result: Appeal allowed only to the extent of directing solatium, interest and interest on solatium as provided under the Act of 1894.
(B) Application of the Act of 2013 to other enactments - Section 105 provides a one-year hiatus for enactments specified in the Fourth Schedule (including the NH Act) before the beneficial provisions regarding compensation apply. (Paras 9, 17 and 23)
Facts of the case:
Land was acquired under the NH Act with notification under Section 3A on 07.06.2011 and a declaration under Section 3D on 20.01.2012. The Competent Authority determined compensation on 11.07.2014. The appellant disputed the quantum, leading to an Arbitrator's award on 13.01.2016. The central dispute was whether solatium and interest should be calculated per the Act of 1894 or the Act of 2013, given that the initial determination was in 2014 but the Arbitrator's award was in 2016.
Findings of Court:
The Court found that the determination made by the Competent Authority under Section 3G(1) of the NH Act is equivalent to the initial award under Section 11 of the Act of 1894. Since this determination was made on 11.07.2014 (prior to 01.01.2015), the Act of 2013 is not applicable for computing the rate of benefits.
Issues: Whether the claim for solatium and interest for acquisition under the NH Act should be computed under the Land Acquisition Act, 1894 or the RFCTLARR Act, 2013, specifically when the initial determination was passed after the 2013 Act's commencement but before its specific application to the NH Act on 01.01.2015.
Ratio Decidendi: The entitlement to solatium and interest for acquisitions under the NH Act depends on when the initial 'award' (determination by Competent Authority) was passed. If passed before 01.01.2015, the Act of 1894 applies; if after, the Act of 2013 applies. The subsequent Arbitrator's award does not change the applicable statute for computation as it is akin to a reference under Section 18 of the 1894 Act.
Result: Appeal allowed only to the extent of directing solatium, interest and interest on solatium as provided under the Act of 1894.
Legal Category Hierarchy
-
land acquisition
- compensation
-
statutory interpretation
- national highways act 1956 (Para 2, 6, 7, 8, 16, 17, 18, 19, 23)
- land acquisition act 1894 (Para 2, 6, 7, 8, 14, 15, 16, 17, 22, 24, 27)
- right to fair compensation and transparency in land acquisition rehabilitation and resettlement act 2013 (Para 2, 3, 9, 10, 11, 12, 13, 17, 20, 21, 22, 23, 24, 25, 26)
- constitutional law
- practice and procedure
Table of Contents
2. Appellant claims full benefits under Act of 2013; respondent contends computation under Act of 1894 because award passed before 01.01.2015. (Para 3 , 4 , 5 )
3. Appeal allowed to extent of directing compensation with solatium, interest, and interest on solatium under Act of 1894; remanded for computation. (Para 27 )
4. Does the Act of 2013 apply to acquisitions under the National Highways Act for awards made before 01.01.2015?
No, the Act of 2013 was made applicable to NH Act only from 01.01.2015, so awards before that date are governed by the Act of 1894. (Para 11 , 12 , 13 , 17 , 18 , 23 , 24 )
5. What determines the applicable Act for solatium and interest under the NH Act: the date of the award or the date of acquisition?
The date of the award (initial determination of compensation by Competent Authority) determines the applicable Act, not the date of acquisition. (Para 13 , 19 , 23 , 24 )
6. Did Tarsem Singh-II (2025) mandate that the Act of 2013 applies to acquisitions before 01.01.2015?
No, Tarsem Singh-II only declined prospective application to prevent discrimination but did not decide that the Act of 2013 applies to awards before 01.01.2015. (Para 12 , 13 )
7. What is the significance of the notification by the Ministry of Road, Transport and Highways regarding compensation under the Act of 2013?
The notification's condition that compensation not paid for majority of land holdings was not satisfied, so it did not help the appellant. (Para 25 , 26 )
J U D G M E N T
K. VINOD CHANDRAN, J.
Leave granted.
2. The only dispute herein is as to whether the claim of solatium, interest and interest on solatium, insofar as the acquisition made under the National Highways Act, 1956, Hereinafter referred to as ‘the NH Act’, is to be computed under the Land Acquisition Act, 1894, Hereinafter referred to as ‘the Act of 1894’ or the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, 3,
3. Sri Harin P. Raval, learned Senior Counsel appearing for the appellant would rely on Union of India & Another v. Tarsem Singh & Others, 2025 SCC OnLine SC 235, (Tarsem Singh-II). He specifically refers to Paragraph 19 of Tarsem Singh II and points out that in declining the prayer for prospective operation of Union of India & Another v. Tarsem Singh & Others, (2019) 9 SCC 304 (Tarsem Singh-I), this Court has specifically noticed that there could be no differentiation, with respect to the benefit of solatium and interest, between a landowner whose land was acquired on 31.12.2014 and on the very next day i.e.,01.01.2015, the date on which the Ordinance brought into effect the application of the Act of 2013 to the acquisitions under the NH Act. Hence, it is the contention of the appellant, the landowner, that he is entitled to the full benefits under the Act of 2013.
4. Sri Ankur Mittal, learned Senior Counsel appearing for the respondent-NHAI, at the outset, submits that insofar as the decisions of this Court and considering the provisions of the Act of 1894 and the Act of 2013, there can be no dispute that when an acquisition is made under the NH Act, then the landowner is entitled to solatium, interest on compensation and interest on solatium. However, the hitch is insofar as the rate at which these benefits must be calculated whether it be under the Act of 1894 or the Act of 2013. It is his contention that the Act of 2013 was made applicable to the acquisitions under the NH Act only on 01.01.2015 and the award in this case was passed on 11.07.2014 by the Competent Authority. Hence, solatium, interest and interest on solatium must be computed under the Act of 1894. He relies on National Highways Authority of India v. Tarsem Singh & Others, 2026 SCC OnLine SC 481, (Tarsem Singh-III).
5. In rebuttal, without prejudice to his earlier contention, the appellant argues that the award of the Arbitrator was passed on 17.05.2017, after 01.01.2015, in which event the Act of 2013 would be applicable in computing the benefits, even if the contention of the NHAI is accepted.
6. In considering the issue, we have to first notice the amendments made to the NH Act in the year 1997, by Act 16 of 1997, which incorporated a new Section 3 including Section 3A to 3J. Section 3J made inapplicable the Act of 1894 to the acquisitions under the NH Act, which was under challenge before this Court in Tarsem Singh-I, in which, Section 3J was held to be violative of Article 14 of the Constitution of India and thus declared to be unconstitutional.
7. In the background of the present dispute and the interplay of the provisions of the NH Act with the Act of 1894 and the Act of 2013, we need to dwell upon Tarsem Singh-I in little detail. Paragraph 10 of the said judgment is extracted hereunder:
10. Keeping in view the object of reducing delay and speedy implementation of highway projects, the amended National Highways Act does away with any “award” by way of an offer to the landowner. Post the notification under Section 3-A, objections are to be heard by the competent authority, whose order is then made final. The moment the authority disallows the objections, a report is submitted to the Central Government, and on receipt of such report, the Central Government, by a declaration, states that the land should be acquired for the purpose mentioned in Section 3-A. The important innovation made by the Amendment Act is that vesting is not postponed to
