‘Pay Toll for a 12-Hour Jam?’: Supreme Court Scrutinizes NHAI’s Right to Collect Fees on Unmotorable Roads

New Delhi – The Supreme Court of India on Monday reserved its judgment in a contentious case challenging the National Highway Authority of India's (NHAI) right to collect tolls on a highway plagued by severe disrepair and debilitating traffic congestion. A bench comprising Chief Justice of India B.R. Gavai, Justice K. Vinod Chandran, and Justice N.V. Anjaria sharply questioned the fundamental premise of levying a user fee for a service not rendered, after hearing arguments on an appeal against a Kerala High Court order that suspended toll collection on a 65-kilometer stretch of National Highway 544.

The case brings to the forefront critical legal questions surrounding the doctrine of public trust, the contractual liabilities of concessionaires and their subcontractors, and the extent of judicial power to intervene when public infrastructure fails. The court's impending verdict is poised to have significant ramifications for infrastructure contracts and the rights of commuters across the country.

Background: The Kerala High Court’s ‘Last Resort’ Order

The legal battle originated from a judgment delivered by the Kerala High Court on August 6, which ordered a four-week suspension of toll collection at the Paliyekkara toll booth in Thrissur district. The High Court's intervention came as a "last resort" after its previous directions to rectify the poor condition of the Edappally-Mannuthy stretch went unheeded.

The High Court articulated a powerful legal principle, observing that the public's obligation to pay a toll is intrinsically linked to the NHAI's responsibility to provide a smooth and safe passage. It noted, "The relationship between the Public and the NHAI is bound by the tie of public trust. The moment it is breached or violated, the right to collect toll fees from the public created through statutory provisions cannot be forced on the public."

This order was challenged before the apex court by both the NHAI, represented by Solicitor General Tushar Mehta, and the concessionaire, Guruvayoor Infrastructure Ltd, represented by Senior Advocate Shyam Divan.

Supreme Court Hearing: A Barrage of Questions on Fairness and Accountability

The Supreme Court bench expressed palpable incredulity at the state of affairs on the highway. Citing a recent incident where a 12-hour traffic jam paralyzed the stretch over the weekend, the judges directly confronted the NHAI's counsel.

When Solicitor General Tushar Mehta attempted to describe a lorry accident that triggered the gridlock as an "act of God," Justice Chandran immediately countered, "The lorry did not fall down on its own. It fell into a pothole and got turned over." This exchange set the tone for the hearing, shifting the focus from unforeseen events to preventable failures in road maintenance.

The core of the judicial scrutiny, however, revolved around the justification for the toll itself. Chief Justice Gavai posed a simple yet profound question upon learning the toll was ₹150 for the 65 km stretch. "Why should a person pay 150 Rs if it takes 12 hours for him to get from one end of the road to the other end?" he asked. "A road which is expected to take one hour, it takes 11 more hours and they have to pay toll as well!"

The Solicitor General argued for a "proportionate reduction" in the toll as a remedy instead of a complete suspension, citing precedent. Justice Chandran dismissed this suggestion as inadequate for the extreme delay faced by commuters. "If there is traffic, it will take maximum 3 hours. For 12 hours, there is no question of proportionate reduction," he stated, adding in a lighter vein, "For the 12 hour block, the National Highway should pay something to the commuters."

The Concessionaire’s Dilemma: A Web of Contractual Liability

The hearing also untangled the complex web of contractual relationships governing highway management. Senior Advocate Shyam Divan, appearing for the concessionaire Guruvayoor Infrastructure Ltd, argued vehemently that his client was being unfairly penalized. He contended that the specific bottlenecks causing the traffic jams were due to underpass construction work awarded by NHAI to a third-party contractor, PSG Engineering.

"My revenue stream cannot be stopped when I am not responsible for this work," Divan submitted, highlighting that his client was diligently maintaining the 60 kms under its direct remit. He quantified the financial injury, stating, "The impact for me has been 5-6 crores already over 10 days. This is grossly unfair."

Divan also raised a significant point of law, questioning the High Court's use of its writ jurisdiction under Article 226 to halt the revenue stream of a private entity. "An order of this nature cannot be issued against a private party under Article 226," he argued. He further criticized the High Court's suggestion that the concessionaire could recover its losses from the NHAI, framing it as fomenting litigation rather than providing a solution.

The Supreme Court bench acknowledged this inter-se dispute, suggesting that any conflict between the NHAI and the concessionaire could be resolved through arbitration, thereby separating the concessionaire's contractual rights from the immediate issue of public hardship.

The Public Interest Argument: Upholding the Commuter’s Rights

Representing the original petitioners before the High Court, Senior Advocate Jayant Muthraj anchored his argument in the paramount duty of the NHAI. He asserted that ensuring a motorable road was the NHAI's non-negotiable responsibility, regardless of its internal contractual arrangements.

When the Chief Justice questioned how the concessionaire could be held liable for work assigned to a third party, Muthraj argued for a collective responsibility. "There should have been a meeting of minds among all these parties to ensure that the road is motorable," he said, adding, "Nothing of that sort has happened and everybody is happily collecting money."

He emphasized that the High Court had issued its suspension order only after exhausting other avenues and was actively monitoring the situation, urging the Supreme Court not to interfere.

Legal Implications and the Path Forward

As the Supreme Court reserves its judgment, the case stands at a critical juncture for public law and infrastructure governance in India. The final verdict will likely address several key legal principles:

1. The Quid Pro Quo of Tolls: The court is expected to rule on whether the right to collect a user fee is absolute or conditional upon the quality of service provided. A ruling in favor of the High Court's position would strengthen the "pay for use" principle, making it a "pay for proper use" principle.

2. The Doctrine of Public Trust: The judgment may further elaborate on how the doctrine of public trust applies to statutory bodies like the NHAI. It could set a precedent that a breach of this trust, demonstrated by a failure to maintain public infrastructure, can lead to a suspension of revenue-generating rights.

3. Accountability in Sub-Contracting: The court's decision will be closely watched for its stance on the apportionment of liability in multi-layered infrastructure projects. It may clarify whether the principal authority (NHAI) and the primary concessionaire can escape responsibility for failures of a subcontractor.

4. Scope of Writ Jurisdiction: The Supreme Court may also delineate the circumstances under which a High Court can, under Article 226, pass orders that have a direct financial impact on private entities involved in public-private partnership (PPP) projects.

With the bench noting it would "consider everything," including the practical difficulties posed by monsoons, the legal community awaits a judgment that could redefine the balance between the rights of the commuting public and the commercial interests of highway operators.