SC: Solatium & Interest to be granted in land acquisitions u/ NH Act, 1956

The Hon’ble Supreme Court of India, on 19th September 2019, in the matter of Union of India & Anr. v. Tarsem Singh & Ors declared that Section 3J of the National Highways Act, 1956 does not provide for grant of solatium and interest to lands acquired under the National Highways Act, therefore to this extent, it is violative of Article 14, hence unconstitutional to this extent. The provisions of the Land Acquisition Act relating to solatium and interest contained in Section 23(1A) and (2) and interest payable in terms of section 28 proviso will apply to acquisitions made under the National Highways Act.

Statutory Reference

Section 3J: Land Acquisition Act 1 of 1894 not to apply.- Nothing in the Land Acquisition Act, 1894 shall apply to an acquisition under this Act.”

Questions before the Court

Whether non-grant of solatium and interest to lands acquired under the National Highways Act, which is available if lands are acquired under the Land Acquisition Act, is bad in law, and consequently that Section 3J of the National Highways Act, 1956 be struck down as being violative of Article 14 of the Constitution of India to this extent.

The Hon’ble Supreme Court observed that:

Thus, the solatium that is paid to a landowner is on account of the fact that a landowner, who may not be willing to part with his land, has now to do so, and that too at a value fixed legislatively and not through negotiation, by which, arguably, such land owner would get the best price for the property to be sold. Once this is understood in its correct perspective, it is clear that “solatium” is part and parcel of compensation that is payable for compulsory acquisition of land. (Para 10)

The object of the 1997 Amendment was to speed up the process of acquiring lands for National Highways. This object has been achieved in the manner set out hereinabove. It will be noticed that the awarding of solatium and interest has nothing to do with achieving this object, as it is nobody’s case that land acquisition for the purpose of national highways slows down as a result of award of solatium and interest. Thus, a classification made between different sets of landowners whose lands happen to be acquired for the purpose of National Highways and landowners whose lands are acquired for other public purposes has no rational relation to the object sought to be achieved by the Amendment Act, i.e. speedy acquisition of lands for the purpose of National Highways. On this ground alone, the Amendment Act falls foul of Article 14. (Para 22)

The right of user being subsumed in acquisition of ownership, the owner cannot get a double benefit on this score. The right of user is, therefore, referable only to persons other than the owner, who may have tenancy rights, and other rights of license on land which is acquired under the National Highways Act. (Para 36)

A person who is interested in an easement affecting land can claim compensation therefor under the Land Acquisition Act. Under both the Land Acquisition Act and the National Highways Act, such claims have to be proved in accordance with law, the difference being that  under the Land Acquisition Act actuals are payable, whereas under the National Highways Act, a fixed amount of 10% of the amount determined by the competent authority is payable. It is, therefore, wholly incorrect to state that extra amounts are payable to the owner under the National Highways Act, which are not so payable under the Land Acquisition Act.(Para 37)

The provisions of the Land Acquisition Act relating to solatium and interest contained in Section 23(1A) and (2) and interest payable in terms of section 28 proviso will apply to acquisitions made under the National Highways Act. Consequently, the provision of Section 3J is, to this extent, violative of Article 14 of the Constitution of India and, therefore, declared to be unconstitutional. (Para 41)

The burden to prove that the land in question is within 50m of the National Highway, and that it does not have commercial potentiality, is on the NHAI. (Para 42)

Copy of judgement: Judgement_19-Sep-2019

-Adv. Tushar Kaushik

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