In this paper, we propose an implicit higher-order compact (HOC) finite difference scheme for solving the two-dimensional (2D) unsteady Navier-Stokes (N-S) equations on nonuniform space grids. This temporally second-order accurate scheme which requires no transformation from the physical to the computational plane is at least third-order accurate in space, which has been demonstrated with numerical experiments. It efficiently captures both transient and steady-state solutions of the N-S equations with Dirichlet as well as Neumann boundary conditions. The proposed scheme is likely to be very useful for the computation of transient viscous flows involving free and wall bounded shear layers which invariably contain spatial scale variation. Numerical results are presented and compared with analytical as well as established numerical data. Excellent comparison is obtained in all the cases.