Union of India & Anr. v. Tarsem Singh & Ors.

The Union of India challenged a High Court order directing enhanced compensation for landowners whose property was acquired for a national highway project. The original acquisition occurred under the National Highways Act, 1956, but compensation was significantly delayed. Tarsem Singh and other farmers from Punjab argued the old rates rendered them destitute, claiming the payment violated the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. The Supreme Court examined whether landowners were entitled to market value revision and interest for prolonged deprivation.

The Supreme Court dismissed the Union’s appeal, ruling in favor of the landowners. The Court held that the Right to Property, interpreted as a constitutional right under Article 300A, necessitates fair and timely compensation. It ordered the recalculation of compensation at the current market multiplier with compounded interest, emphasizing that procedural delays cannot diminish the substantive right to just compensation.

The primary dispute centered on the determination of compensation for land acquired under superseded legislation. The key question was whether landowners were entitled to have their compensation calculated based on the market value prevailing on the date of actual payment rather than the archaic rate fixed on the date of the preliminary notification. It also examined the liability of the state for statutory interest during inordinate procedural delays.

The ruling set a significant precedent for stalled infrastructure projects across India, reinforcing that the state bears fiscal responsibility for bureaucratic delays. It prompted the central government to streamline land acquisition clearances and expedite payment mechanisms. For agrarian communities, the judgment acted as a bulwark against inflationary erosion of compensation, significantly influencing subsequent high-value land acquisition disputes involving national highways and defense corridors.