By the Court.—The petitioner has sought to challenge the legality of a notification issued by the Union Government in the Ministry of Road Transport and Highways on 2 January 2015 in exercise of the power conferred by Rule 3 of the National Highways Fee (Determination of Rates and Collection) Rules, 2008 (Rules of 2008). By the notification, the Central Government has exempted eight bridges in the State of Uttar Pradesh from the levy of a user fee. The bridge in question to which the petition relates is at serial number four and is described as Tons (Katka-Setu) at Kilometer 430 of NH-76E (35). A contract was entered into between the petitioner and the State Government acting as an agency of the Union Government on 29 March 2014 for the collection of a fee for a period of three years from 1 April 2014 to 31 March 2017. The Union Ministry of Road Transport and Highways issued a notification on 2 January 2015 exempting the imposition of the levy of a user fee on eight bridges including the bridge covered by the contract to the petitioner. The power has been exercised under the Rules of 2008.

2. Rule 3 (1) provides as follows:

“3. Levy of fee.—(1) The Central Government may by notification, levy fee for use of any section of national highway, permanent bridge, bypass or tunnel forming part of the national highway, as the case may be, in accordance with the provisions of these rules:

Provided that the Central Government may, by notification, exempt any section of national highway, permanent bridge, bypass or tunnel constructed through a public funded project from levy of such fee or part thereof, and subject to such conditions as may be specified in that notification.”

3. Two submissions have been urged on behalf of the petitioner. The first is based on the proviso to sub-section (3) of Section 7 of the National Highways Act, 1956. Section 7 provides as follows:

“7. Fees for services or benefits rendered on national highways.—(1) The Central Government may, by notification in the Official Gazette, levy fees at such rates as may be laid down by rules made in this behalf for services or benefits rendered in relation to the use of ferries, permanent bridges the cost of construction of each of which is more than rupees twenty-five lakhs and which are opened to traffic on or after the 1 April 1976, temporary bridges and tunnels on national highways and the use of sections of national highways.

(2) Such fees when so levied shall be collected in accordance with the rules made under this Act.

(3) Any fee leviable immediately before the commencement of this Act for services or benefits rendered in relation to the use of ferries, temporary bridges and tunnels on any highway specified in the Schedule shall continue to be leviable under this Act unless it is altered in exercise of the powers conferred by sub-section (1):

Provided that if the Central Government is of opinion that it is necessary in the public interest so to do, it may, by like notification, specify any bridge in relation to the use of which fees shall not be leviable under this sub-section.”

4. The submission is that the proviso which is extracted above under which the Central Government has been empowered to exempt the payment of fees in public interest leviable on any bridge is a proviso which applies to the entire Section 7 and not only to Section 7 (3). The second submission is that the notification which has been issued on 2 January 2015 cannot apply retrospectively to contracts which were executed prior to the date of notification and hence, to that extent it is ultra vires in so far as it affects accrued rights.

5. Under Section 7 (1), the Union Government has been empowered to levy fees at such rates as may be prescribed by rules made in that behalf for services or benefits rendered inter alia in relation to the use of ferries and permanent bridges the cost of construction of each of which is in excess of rupees twenty-five lakhs and which are opened to traffic