NH Act | Compensation Under 1956 Act Determined Before 01.01.2015 Must Be Computed Under Land Acquisition Act 1894: Supreme Court

"The entitlement would be determined as to whether the ‘award’ was passed before or after 01.01.2015; if before, the entitlement will be under the Act of 1894 and if after, under the Act of 2013." Supreme Court, in a significant ruling dated September 8, 2026, clarified that for land acquisitions made under the National Highways Act, 1956 (NH Act), the computation of solatium and interest must be governed by the Land Acquisition Act, 1894 if the award was passed prior to January 1, 2015.

A bench comprising Justice J.B. Pardiwala and Justice K. Vinod Chandran held that the benefits of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (Act of 2013) become applicable to NH Act acquisitions only from the date specified by the notification, which is January 1, 2015.

The appellant challenged the computation of compensation for land acquired under the NH Act, contending that the benefits of the Act of 2013 should apply. While the Competent Authority had determined the compensation on July 11, 2014, the appellant argued that because the arbitrator's award was finalized on May 17, 2017, the more beneficial provisions of the 2013 Act should be invoked. The National Highways Authority of India (NHAI) maintained that the cut-off date of January 1, 2015, precluded the application of the 2013 Act to this specific award.

The court was primarily tasked with determining whether the compensation, including solatium and interest, for an acquisition under the NH Act should be computed under the Act of 1894 or the Act of 2013. The court also examined the precise implication of the "award" date in the context of the legislative transition between the two regimes.

Applicability of the 2013 Act

The court observed that Section 105 of the Act of 2013 provided a one-year hiatus for the application of its provisions to enactments listed in the Fourth Schedule, including the NH Act. The court noted that while Section 3J of the NH Act was declared unconstitutional in Tarsem Singh-I, this did not automatically determine which enactment governed the computation of statutory benefits. The court clarified that the legislature, through successive Ordinances and notifications, expressly extended the application of the 2013 Act to NH Act acquisitions only with effect from January 1, 2015.

Distinction Based on Date of Award

The court emphasized that the date on which the competent authority determines the compensation serves as the "award" for the purpose of identifying the applicable law. Even if acquisition proceedings commenced prior to the enactment of the 2013 Act, the specific date of the award acts as the watershed moment. The court held that if the determination occurred before the notified date of January 1, 2015, the rigour and provisions of the Act of 1894 continue to occupy the field.

Court Distinguishes Tarsem Singh Precedents

The bench clarified that earlier decisions in Tarsem Singh-II and Tarsem Singh-III dealt primarily with the entitlement to solatium and interest and were concerned with proceedings that had already attained finality. The court held that these judgments do not mandate the application of the Act of 2013 to awards passed prior to the 2015 cut-off date. The court stated that the "only dictum that can be deciphered from the decisions cited is that the benefit of solatium and interest would be applicable, not only to the landowners whose lands were acquired after 01.01.2015, it would equally be entitled to the landowners whose acquisition was before that date."

Need for Uniformity in Benefits - No Hostile Discrimination

The court reasoned that providing solatium and interest to landowners whose acquisitions occurred before 2015 is a matter of constitutional parity to avoid hostile discrimination. However, the quantum and the specific legislative framework for calculating these benefits must align with the law in force at the time of the award. The court rejected the appellant's reliance on Ministry notifications regarding "majority of land holdings," finding that the factual position in this case did not support the claim for the application of the 2013 Act.

The Supreme Court allowed the appeal only to the extent of directing the conferment of solatium, interest on compensation, and interest on solatium as per the Act of 1894. The matter was remanded to the Competent Authority for the specific purpose of computing these benefits and ensuring their disbursal to the appellant. This ruling reinforces the necessity for judicial consistency in applying compensation regimes based on the temporal sequence of administrative awards.

Date of Decision: 08 September 2026