1. Toll fee collection on a national highway section — Challenge to levy under Rule 3(1) of National Highways Fee Rules, 2008. (Para 1 , 3 , 4 )
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2024 Supreme(SC) 610
SUPREME COURT OF INDIA
SANJIV KHANNA, SANJAY KUMAR, R. MAHADEVAN, JJ.
Chairman, National Highways Authority Of India & Anr. - Appellants
Versus
Arvind Kumar Thakur & Anr. - Respondents
Civil Appeal No. 2996 of 2017
Decided on : 24-07-2024
Important Points
IMPORTANT POINT
Toll once collected, same cannot be returned to road users.
Toll once collected, same cannot be returned to road users.
Subject
Administrative Law - Infrastructure and Transport
Act Referred
NATIONAL HIGHWAYS AUTHORITY OF INDIA ACT: S.11
NATIONAL HIGHWAYS FEES DETERMINATION OF RATES AND COLLECTION RULES: R.3(1)
NATIONAL HIGHWAYS FEES DETERMINATION OF RATES AND COLLECTION RULES: R.3(1)
Headnote
National Highways Fee (Determination of Rates and Collection) Rules, 2008 – Rule 3(1) – National Highways Authority of India Act, 1988 – Section 11 – Restraint order by High Court on toll collection from users at Runni Toll Plaza on Muzaffarpur-Sonbarsa section of National Highway-77 with effect from 07.07.2015 – Toll is being collected by NHAI, as highway being constructed is under “Build, Operate and Transfer” basis – Contractor responsible for laying highway is being paid annuity which has been fixed in terms of contract – Impugned judgment of High Court is unsustainable – Judgment merely refers to Rule 3(1) of 2008 Rules, but does not interpret or go into other aspects and facts which were highlighted and pointed out by NHAI – Toll/fee, having been collected and being available in Bank, today, it will be impossible to return the same to road users – Amount lying deposited in nationalized bank along with interest may now be utilized by NHAI and would be treated as toll/fee collected from users – It will be accounted towards actual cost to be recovered – Judgment of High Court set aside – Appeal allowed. (Paras 5 to 9)
Facts of the case:
Present appeal by the National Highways Authority of India through its Chairman and the Project Director, PIU, impugns Judgment dated 05.04.2016, whereby the writ petition filed by respondent No. 1, was allowed with a direction that the appellant, NHAI, will not levy and collect any fee from users at Runni Toll Plaza on Muzaffarpur-Sonbarsa section of National Highway-77 with effect from 07.07.2015. It was further directed that the appellant, NHAI, shall not levy any fee in exercise of its power under Rule 3(1) of National Highways Fee (Determination of Rates and Collection) Rules, 2008 till completion of the project.
Findings of Court:
Union of India and NHAI may examine the question as to whether expression “section of national highway” requires proper elucidation and clarification in a manner permitted by law.
Result : Appeal allowed.
Legal Category Hierarchy
Advocates appeared:
For the Appellant(s) : Ms. Neetica Sharma, Adv. Mr. Tavinder Sidhu, Adv. M/s. M.V. Kini & Associates, AOR
For the Respondent(s): Mr. Dharnidhar Jha, Sr. Adv. Mr. Govind Jee, AOR Mr. Rambha Singh, Adv. Mr. Akhilesh Kumar Mishra, Adv. Mr. Omanakuttan K.K., Adv.
For the Appellant(s) : Ms. Neetica Sharma, Adv. Mr. Tavinder Sidhu, Adv. M/s. M.V. Kini & Associates, AOR
For the Respondent(s): Mr. Dharnidhar Jha, Sr. Adv. Mr. Govind Jee, AOR Mr. Rambha Singh, Adv. Mr. Akhilesh Kumar Mishra, Adv. Mr. Omanakuttan K.K., Adv.
Table of Contents
2. Legality of toll collection upon completion of specific highway sections versus completion of the entire project. (Para 1 , 2 )
3. High Court ignored provisional completion certificates and BOT annuity structures; returning deposited toll funds to users is practically impossible and detrimental to cost recovery. (Para 5 , 6 )
4. Toll fees are leviable upon the completion of a specific section of a national highway as notified under the applicable rules. (Para 3 , 4 , 5 )
5. Appeal allowed — High Court judgment set aside — Deposited toll funds released for recovery of actual costs. (Para 7 , 8 )
6. Can toll fees be collected before the entire highway project is completed?
Yes, toll fees can be collected if a specific section of the national highway is completed and a notification is issued under the relevant rules, such as the National Highways Fee Rules, 2008. (Para 3 , 4 , 5 )
7. How are toll funds handled when a court stay is later vacated in favor of the collecting authority?
If returning the funds to users is impossible, the court may direct that the deposited amounts, along with interest, be utilized by the authority to account towards the actual cost of the project. (Para 5 , 6 , 7 )
8. Is the term section of national highway clearly defined in the National Highways Act, 1956?
The court noted that the expression section of national highway is not specifically defined in the National Highways Act, 1956 or the 2008 Rules, and suggested it may require further legal clarification. (Para 2 , 9 )
ORDER :
1. This appeal by the National Highways Authority of India1[“NHAI”, for short.], through its Chairman and the Project Director, PIU, impugns the judgment dated 05.04.2016, whereby the writ petition filed by respondent No. 1, Arvind Kumar Thakur, was allowed with a direction that the appellant, NHAI, will not levy and collect any fee from the users at Runni Toll Plaza on Muzaffarpur-Sonbarsa section of National Highway-77 with effect from 07.07.2015. It was further directed that the appellant, NHAI, shall not levy any fee in exercise of its power under Rule 3(1) of the National Highways Fee (Determination of Rates and Collection) Rules, 20082[“2008 Rules”, for short.] till completion of the project.
2. Our attention has been drawn to Rule 3(1) of the 2008 Rules, which refers to the section of the national highway being complete and, thereupon, the highway users can be asked to pay the prescribed fee by way of toll. The expression “section of national highway” has not been specifically defined in the National Highways Act, 19563 or the 2008 Rules. However, in the context of the present case, we need not go into the said aspect. The aforesaid issue is left open.
3. Our attention has been drawn to the notification dated 26.11.2013 issued under Section 11 of the National Highways Authority of India Act, 1988, in relation to the stretch from kilometre 0.000 to kilometre 89.000 (Muzaffarpur-Sonbarsa Section of National Highway-77). The said notification states that the section length of 61.70 kilometres for use of two laning with paved shoulder had been completed. It is also stated that the length of 20.38 kilometres of the bypasses had also been completed and, therefore, the Central Government proposed to levy and collect fee from the road users. The fee prescribed for 61.70 kilometres is 60% of the base rate specified in the table given in the notification, whereas, the fee prescribed for 20.38 kilometres of the bypasses is at the rate of 90% of the base rate specified in the table given in the notification.
4. After issuing the aforesaid notification, an independent contractor, namely, Intercontinental Consultants and Technocrats Pvt. Ltd. examined and verified the two laning with paved shoulder of the Muzaffarpur-Sonbarsa Section of National Highway-77. It issued provisional completion certificate dated 29.06.2015. In the present case, the toll is being collected by NHAI, as the highway being constructed is under “Build, Operate and Transfer” basis. The contractor responsible for laying the highway is being paid annuity, which has been fixed in terms of the contract.
5. Having regard to the aforesaid facts, we are of the opinion that the impugned judgment of the High Court, giving the aforesaid directions, is unsustainable. The judgment merely refers to Rule 3(1) of the 2008 Rules, but does not interpret or go into the other aspects and facts which were highlighted and pointed out by the NHAI. Moreover, in the facts of the present case, this Court, while issuing notice, vide order dated 25.04.2016, had stayed the operation of the impugned judgment subject to the condition that the amount collected towards toll on the completed portion of the highway/road shall be deposited in a nationalized bank. The toll users have, therefore, paid the toll which is now lying with the nationalized bank. The private contractor, who had laid the highway, has also been paid the annuity. The annuity, it may be noted, is payable at the rate specified for 15 years. The NHAI collects the toll till the actual costs are recovered with a stipulation that after recovery of the capital cost the fee leviable would be reduced to 40% of the user fee.
6. The toll/fee, having been collected and being available in the bank, today, it will be impossible to return the same to the road users. Any order passed by this Court, modifying the interim order, would in fact, be detrimental and harmful to the road users as additional amounts would have to be collected to m
