Solatium, interest to be paid highway land acquisition

In a significant ruling, the Supreme Court on Thursday held that solatium and interest, besides compensation, are to be paid to a land owner whose land is compulsorily acquired for constructing highways in the country.

A bench of Justices R F Nariman and Surya Kant declared that the provisions of the Land Acquisition Act, relating to solatium and interest, would also apply to acquisitions made under the National Highways Act 1956, which was amended in 1997 to obviate any delay in taking away of the land for speedy implementation of highways.

The top court declared Section 3J of the National Highways Act as unconstitutional for being violative of Article 14 (equality) of the Constitution. Section 3J stated the Land Acquisition Act provisions would not apply to the National Highways Act.

“Solatium” is part and parcel of compensation that is payable for compulsory acquisition of land, which may fetch a better price in market to the land owner.

Notably, the Land Acquisition Act now stand repealed and the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, has come into force since then.

According to the new land acquisition law, solatium equivalent to 100% of the market value multiplied by various factors, whether the land was situated in a rural or urban area, constituted minimum compensation package to be given to those whose land is being acquired.

The court passed its judgement while dealing with a batch of appeals filed by the Union government against the Punjab and Haryana High Court's judgement. The HC had held that non-grant of solatium and interest to lands acquired under the National Highways Act, which was available under the Land Acquisition Act, was bad in law.

The Union government, led by Solicitor General Tushar Mehta, however, pointed out the law was amended in 2015 to extend benefit of solatium and interest for all land acquisitions including for national highways.

Senior advocate Shyam Divan, appearing for the NHAI, contended that it was not possible to choose between one law and another as the National Highways Act alone would apply when land was acquired for the purpose of National Highways.

Senior advocate Amit Sibal, and others, appearing for the private parties, defended the HC's judgement. They said solatium and interest are integral parts of compensation that is awardable to persons whose lands have been compulsorily expropriated.

They further contended that the main object of the Amendment Act 1997 to the National Highways Act (NHA), 1956, was to ensure expediting the process of land acquisition for highways.

“Thus, excluding solatium and interest that is awardable under the Land Acquisition Act results in a discrimination between persons whose land was acquired for national highways as opposed to other public purposes,” they said.

Notably, before 1997 amendment to the NHA, all acquisitions for the purpose of national highways were made under the Land Acquisition Act, and the owners were given, in addition to market value, solatium as well as interest under the provisions of that Act.

On Thursday, the court declared that both before the 1997 Amendment Act and after the 2013 Act, solatium and interest is payable to landowners whose property is compulsorily acquired for purposes of National Highways. The court held that the provisions of the Amendment Act would not receive the protective umbrella of Article 31-C (saving of law for giving effect to the directive principles) of the Constitution.