2026 INSC 973 Page 1 of 18

CA@ SLP (C) No.27541 of 2024

Reportable

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

Civil Appeal No. of 2026

(Arising out of SLP (C) No.27541 of 2024)

Manav Bhanot

...Appellant

Versus

National Highway Authority of India

...Respondent(s)

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

1

, is to be

computed under the Land Acquisition Act, 1894

2

or the Right to

Fair Compensation and Transparency in Land Acquisition,

Rehabilitation and Resettlement Act, 2013

3

.

1

Hereinafter referred to as ‘the NH Act’

2

Hereinafter referred to as ‘the Act of 1894’

3

Hereinafter referred to as ‘the Act of 2013’

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3. Sri Harin P. Raval, learned Senior Counsel appearing for

the appellant would rely on Union of India & Another v. Tarsem

Singh & Others

4

, (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

5

(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

4

2025 SCC OnLine SC 235

5

(2019) 9 SCC 304

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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

6

, (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

6

2026 SCC OnLine SC 481

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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

after an award is made by the competent authority.

Vesting takes place as soon as the Section 3-D

declaration is made. One other important difference

between the Amendment Act and the Land Acquisition

Act is that determination of compensation is to be

made by the competent authority under the

Amendment Act which, if not accepted by either party,

is then to be determined by an arbitrator to be

appointed by the Central Government. Such

arbitrator's award is then subject to challenge under

the Arbitration and Conciliation Act, 1996. Thus,

delays in references made to District Judges and

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appeals therefrom to the High Court and the Supreme

Court have been obviated. Section 3-G(7) does not

provide for grant of solatium, and Section 3-H(5)

awards interest @ 9% on the excess amount

determined by the arbitrator over what is determined

by the competent authority without the period of one

year contained in the proviso to Section 28 of the Land

Acquisition Act, after which interest is only awardable

@ 15% p.a., if such payment is made beyond one

year.

8. However it must be said that though vesting occurs on the

declaration being made, as emphasised by an underlining in the

above extract, possession can only be occasioned after the

amount determined by the Competent Authority, under Section

3D is deposited as provided under sub-section (1) of Section 3H.

Insofar as the computation of solatium, interest and interest on

solatium, there is a marked difference in the Act of 2015 from the

Act of 1894, which also has been highlighted in Paragraph 13 in

the decision in Tarsem Singh-I; which is extracted hereunder:-

13. The First Schedule to the said Act provides that

solatium equivalent to 100% of the market value

multiplied by various factors, depending on whether

the land is situated in a rural or urban area, constitutes

minimum compensation package to be given to those

whose land is acquired. The Fourth Schedule to this Act,

to be read along with Section 105, expressly includes

under Item 7, the National Highways Act, 1956. In Item

9, this Schedule also includes the Requisitioning and

Acquisition of Immovable Property Act, 1952. By a

Notification dated 28-8-2015 issued under Section 105

read with Section 113 of the 2013 Act, it is provided that

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the 2013 Act compensation provisions will apply to

acquisitions that take place under the National

Highways Act. The result is that both before the 1997

Amendment Act and after the coming into force of the

2013 Act, solatium and interest is payable to

landowners whose property is compulsorily acquired

for purposes of National Highways. This is one other

very important circumstance to be borne in mind when

judging the constitutional validity of the 1997

Amendment Act for the interregnum period from 1997

to 2015.

9. In considering the dispute arising, we must first notice

Section 105 of the Act of 2013, which is extracted hereunder:

‘105. (1) Subject to sub-section (3), the provisions of

this Act shall not apply to the enactments relating to

land acquisition specified in the Fourth Schedule.

(2) Subject to sub-section (2) of section 106, the Central

Government may, by notification, omit or add to any of

the enactments specified in the Fourth Schedule.

(3) The Central Government shall, by notification,

within one year from the date of commencement of this

Act, direct that any of the provisions of this Act relating

to the determination of compensation in accordance

with the First Schedule and rehabilitation and

resettlement specified in the Second and Third

Schedules, being beneficial to the affected families,

shall apply to the cases of land acquisition under the

enactments specified in the Fourth Schedule or shall

apply with such exceptions or modifications that do not

reduce the compensation or dilute the provisions of this

Act relating to compensation or rehabilitation and

resettlement as may be specified in the notification, as

the case may be.

(4) A copy of every notification proposed to be issued

under sub-section (3), shall be laid in draft before each

House of Parliament, while it is in session, for a total

period of thirty days which may be comprised in one

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session or in two or more successive sessions, and if,

before the expiry of the session immediately following

the session or the successive sessions aforesaid, both

Houses agree in disapproving the issue of the

notification or both Houses agree in making any

modification in the notification, the notification shall not

be issued or, as the case may be, shall be issued only in

such modified form as may be agreed upon by both the

Houses of Parliament.’

10. By Ordinance 9 of 2014, there was an amendment made to

sub-section (3) of Section 105, which is extracted hereinbelow:

‘(3) The provisions of this Act relating to the

determination of compensation in accordance with the

First Schedule, rehabilitation and resettlement in

accordance with the Second Schedule and

infrastructure amenities in accordance with the Third

Schedule shall apply to the enactments relating to land

acquisition specified in the Fourth Schedule with effect

from 1st January, 2015.;’

11. The above-mentioned amendment stood extended by

Ordinance 5 of 2015 and later by a notification, the provisions of

the Act of 2013 were made applicable from 19.09.2015. Hence, the

contention of the NHAI that, though the Act of 2013 was brought

into effect from 01.01.2014, it was made applicable to the NH Act

only with effect from 01.01.2015. Thereby the contention is that

prior to 01.01.2015 in computing the benefits of solatium, interest

and interest on solatium, it must be based on the Act of 1894.

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12. In Tarsem Singh-II, the NHAI attempted to seek a

clarification to the extent of Tarsem Singh-I being applied

prospectively. The intention was to preclude reopening of cases

where land acquisition proceedings have already been

completed, and the determination of compensation had attained

finality. However, this Court in Tarsem Singh-II held that granting

such clarification would effectively nullify the very relief that

Tarsem Singh-I intended to provide. It was also held in

Paragraph 19 as an illustration that there could not be a situation

created where solatium and interest would be entitled to a person

whose land is acquired on 01.01.2015 but would not be entitled to

a landowner whose land was acquired on 31.12.2014. Tarsem

Singh-I reckoned this very malady of solatium and interest not

being entitled to acquisitions between 1997 and 2014; i.e.: the

date on which Section 3J was incorporated in the NH Act with

retrospective effect from 24.01.1997 and the date on which the Act

of 2013 came into effect, 01.01.2014. That is why Section 3J was

struck down, but that is only to declare the benefit of solatium and

interest being applicable across the years and not to determine

under which enactment such benefit is to be granted. Hence,

Tarsem Singh-II declined the prayer for prospective application,

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which would result in hostile discrimination. But the issue agitated

here is res integra, since even Tarsem Singh-III was only

concerned with the proceedings which had attained finality.

13. Hence, only on and after the date on which the Ordinance

brought in application of the Act of 2013 would the statutory

benefits contained therein be entitled to landowners whose lands

are acquired under the NH Act. The decisions cited does not say

that the Act of 2013 is applicable to the awards passed prior to

01.01.2015. 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. Tarsem

Singh-II does not lay down as a proposition that solatium and

interest before 01.01.2015 would also have to be computed based

on the provisions under the Act of 2013, not even from its effect,

i.e.: 01.01.2014; since for the acquisitions under the NH Act, the

Act of 2013 came into effect only from 01.01.2015. That benefits of

solatium and interest are due to even landowners whose lands are

acquired on or before 01.01.2015, is unimpeachable, however,

the entitlement would be determined as to whether the ‘award’

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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.

14. In this context, we should examine the Act of 1894 wherein

the acquisition commences with Section 4, inter alia providing for

publication of a preliminary notification in the Official Gazette and

public notice, whereupon an authorised officer is entitled to enter

upon the premises and carry out a survey and the ancillary things

as provided in sub-section (2). Section 5A enables the landowner

to object to the acquisition within 30 days, in the event of which a

hearing is mandated before consideration of such objections;

further requiring the Collector to furnish his recommendations

along with the record of proceedings to the Government. Section

6 mandates a declaration that the land is required for public

purpose, which must be made after considering the report of the

Collector, within three years from the date of publication of the

notification under Section 4(1).

15. The Act of 1894 also provides for an inquiry and award by

the Collector as per Section 11, which award shall be made within

a period of two years from the date of publication of the

declaration, failing which the entire proceedings for acquisition

would lapse. Any person interested in the land who does not

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accept the award made, could, under Section 18, by a written

application to the Collector, require reference by the Collector

for determination, to the Court, the objections regarding

measurement of land, amount of compensation, the persons to

whom it is payable and apportionment among the persons

interested.

16. Identical are the provisions under the NH Act, but with

different timelines considering the expediency in the matter.

Section 3A requires a notification to be published by the Central

Government in the Official Gazette, with publication in two local

newspapers; one of which must be in the vernacular language.

Section 3C provides a hearing of objections and Section 3D

provides a declaration of acquisition by the Central Government

on a report made by the Competent Authority by a notification in

the Official Gazette, within a period of one year from the date of

publication of the notification under Section 3A, failing which the

notification under Section 3A would not have any effect. Section

3E empowers the possession of such property by the Competent

Authority, when the land is vested in the Central Government as

per sub-section (2) of Section 3D, by virtue of a declaration in sub-

section (1) of Section 3D and the amount determined by the

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Competent Authority under Section 3G with respect to such land,

has been deposited under sub-section (1) of Section 3H. Section

3G provides for the determination of amounts payable as

compensation; sub-section (1) empowering the Competent

Authority to determine the amount of compensation and pay the

same, which under sub-section (1) of Section 3H has to be

deposited before taking possession of the land. Akin to a

reference under Section 18 of the Act of 1894, any party aggrieved

with the amount determined by the Competent Authority under

sub-section (5) of Section 3G, can make an application to resolve

the dispute by the Arbitrator to be appointed by the Central

Government.

17. The conspectus of the decisions cited above juxtaposed

with the provisions of the three enactments dealt with, is that

insofar as the Act of 2013, which came into effect on 01.01.2014,

there was a time of one year provided by Section 105 insofar as

its application to the enactments specified in the IV

th

Schedule;

admittedly NH Act is one of such enactments included in that

schedule. Section 3J of the NH Act, making inapplicable the

provisions of the Act of 1894, which was brought in the year 1997,

was declared unconstitutional by Tarsem Singh-I. As is evident

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from the dictum a blanket disentitlement to the benefits of

Schedules I to III of the Act of 2013 would run afoul the

authoritative pronouncement regarding constitutionality. Hence,

but for Section 105 of the Act of 2013, it would have become

applicable even to the NH Act from the date of its effective

operation i.e.01.01.2014. Section 105 extended the period in

which it becomes applicable for a period of one year, to those

enactments included under Schedule IV, after which, by

Ordinances and later by a notification, the Act of 2013 was made

applicable to the acquisitions under the NH Act also.

18. In the present case, admittedly the notification with respect

to acquisition i.e. under Section 3A was published in the Official

Gazette on 07.06.2011 and on 01.07.2011 it was published in an

English newspaper and one in Hindi too. Objections were called

for under Section 3C (1) and after considering the same, on

20.01.2012, the declaration under Section 3D (1) was published in

the Official Gazette, which was also published in two newspapers

and a notice was issued on 01.09.2012 to the landowners for

determination of compensation. The Competent Authority, NH7

and Sub-Divisional Officer, Jabalpur, determined the

compensation by order dated 11.07.2024 wherein a total

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compensation of Rs.3,47,38,287/- was awarded, which is

produced as Annexure P1. The appellant received the amount of

Rs.49,17,000/- due to him, on 13.10.2014, which was disputed on

quantum and referred for consideration before the Arbitrator,

who issued an order dated 13.01.2016 as Annexure P5, which was

challenged under Section 34 and Section 37 of the Arbitration and

Conciliation Act, 1996; which orders are challenged before us.

19. Now the question arises as to which is the order to be

determined as an award under the NH Act for the purpose of

attracting the provisions of the Act of 2013. As we noticed from the

Act of 1894 and the Act of 2013, the initial determination of

compensation as per those enactments, by the Collector, termed

to be an award, is respectively under Section 11 and Section 23.

Under the NH Act, it is the determination made by the Competent

Authority under Section 3G (1). The determination made by the

Competent Authority of the compensation under sub-section (1)

of Section 3G and the determination of the dispute raised under

sub-section (5), by the Arbitrator, under the NH Act are

respectively in the nature of the award passed under Section 11

and the determination by a Civil Court, on a reference made to it

under Section 18 of the Act of 1894.

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20. Section 24(1)(a) of the Act of 2013 reads as under: -

“24(1)(a) where no award under Section 11 of the said

Land Acquisition Act has been made, then, all provisions

of this Act relating to the determination of compensation

shall apply; or”

21. In this context, we must notice the Constitution Bench

decision of this Court in Indore Development Authority v.

Manoharlal and Others

7

, wherein in Paragraphs 366.1 is relevant

and is extracted hereunder:

‘366.1. Under the provisions of Section 24(1) (a) in

case the award is not made as on 1-1-2014, the date of

commencement of the 2013 Act, there is no lapse of

proceedings. Compensation has to be determined

under the provisions of the 2013 Act.’

22. Even going by the Constitution Bench decision, the

application of the Act of 2013 arises with reference to the award

made, whether it be under the Act of 1894 or the Act of 2013; even

if the proceedings for acquisition were commenced prior to

01.01.2014. If an award is made prior to 01.01.2014, the date of

effect of the Act of 2013, then the compensation has to be

determined under the provisions of the Act of 1894 in the

reference under Section 18 of that Act and in any further challenge

7

(2020) 8 SCC 129

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raised, wherein the solatium and interest will be as available

under that Act. However, if the award is made after 01.01.2014,

obviously, it has to concede to the more beneficial proceedings

under the Act of 2013, even if the acquisition proceedings were

commenced under the Act of 1894.

23. Insofar as the NH Act is concerned, as we saw, a hiatus of

one year was provided for its application. Section 105(1) provided

that the enactments included in the IV

th

Schedule, will not be

entitled to the benefits of the Act for a year and sub-section (3)

provided for such benefits to be made applicable by a notification

after one year. The intention as we discern is to provide a period

of one year from the date of effect of the Act of 2013 for the

Competent Authority under the NH Act to determine the

compensation, deemed to be the initial award, insofar as the

acquisition proceedings taken prior to the Act of 2013. If a

determination of compensation has not been made before

01.01.2015, then necessarily the Act of 2013 was to apply. But if a

determination of compensation is made by the Competent

Authority under the NH Act before 01.01.2015, even if it is after

01.01.2014 solatium interest and interest of solatium would be

payable under the Act of 1894.

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24. In the present case admittedly, the Competent Authority

determined the compensation under the NH Act, which is akin to

the award under the Act of 1894, passed on 11.07.2014, prior to

the Ordinance which made applicable the benefits of the Act of

2013 to the NH Act w.e.f. 01.01.2015. Hence, though, the solatium,

interest and interest on solatium is applicable, the same shall be

computed based on the provisions of the Act of 1894.

25. An attempt was made to point out the notification brought

out by the Ministry of Road, Transport and Highways, produced

as Document-A along with I.A No.254333 of 2024, specifically

4.6(c) which is extracted hereunder:

‘All cases of Land acquisition where the Awards

had not been announced under Section 3G of the

NH Act till 31.12.2014 or where such awards had

been announced but compensation had not been

paid in respect of majority of the land holdings

under acquisition as on 31.12.2014, the

compensation would be payable in accordance

with the First Schedule of the RFCTLARR Act, 2013.’

26. The attempt of the learned Senior Counsel for the appellant

is to urge that the majority of the landowners were not paid the

compensation as on 31.12.2014. In fact, we must notice that the

word employed in the notification is the majority of the ‘land

holdings’ and not the ‘landowners’. NHAI has taken a contention,

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as available in Annexure R-1 produced along with the counter

affidavit that the total land acquired is 3.080 hectares out of which

the compensation for 1.700 hectares was paid in the year 2014

itself. The notification does not help the appellant.

27. We, hence, allow the appeal only to the extent of directing

that the compensation as determined by the Arbitration Award,

shall be conferred with solatium, interest and interest on solatium

as provided under the Act of 1894, for which the matter is

remanded to the Competent Authority for the purpose of

computation and disbursal by the Government to the appellant

herein.

28. Pending application(s), if any, shall stand disposed of.

.......…….……………………. J.

(J. B. PARDIWALA)

....……….……………………. J.

(K. VINOD CHANDRAN )

NEW DELHI;

SEPTEMBER 08, 2026.