REGULATORY · INDIA
Supreme Court fixes 9% interest on land compensation
Change
The Supreme Court ruled that solatium and interest on land acquisition compensation cannot be made contingent on financial burden and that interest is payable at 9% under the Land Acquisition Act.
Why it matters
The Supreme Court held that solatium and interest on land acquisition compensation cannot depend on the magnitude of the acquiring authority's financial burden. The court stated interest payable to landowners is governed by the Land Acquisition Act rate of 9%, not the NHAI Act's 5% cap. A Bench of Chief Justice Surya Kant and Justice Ujjal Bhuyan disposed of NHAI's review plea against an earlier ruling on retrospective application. The ruling affirms the constitutional guarantee of just compensation.
Implications
- · 9% interest increases cash outflows for authorities administering land-acquisition payouts.
- · Raises settlement exposure tied to the liability finding
- · Project budgets and treasury funding for infrastructure acquisitions face higher financing needs.
- · Claims-processing and compliance workflows apply Land Acquisition Act rates rather than NHAI caps.
Who is affected
- · M&A advisers
Source
Topics
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