24 July 2024 Civil Appeals >> Civil & Consumer Law  

In a significant legal development of Chairman, National Highways Authority of India & Another v/s Arvind Kumar Thakur & Another, the Supreme Court has overturned a judgment by the High Court that had prohibited the National Highways Authority of India (NHAI) from collecting toll fees at the Runni Toll Plaza on the Muzaffarpur-Sonbarsa section of National Highway-77. The Supreme Court’s decision, issued on September 16, 2024, addressed the legal and factual issues surrounding toll collection practices and project completion.

Background:

The controversy began when Arvind Kumar Thakur filed a writ petition challenging the NHAI’s decision to levy toll fees on the Muzaffarpur-Sonbarsa stretch of NH-77. On April 5, 2016, the High Court ruled in favor of Thakur, directing NHAI to cease toll collection from July 7, 2015. The court's decision was based on Rule 3(1) of the National Highways Fee (Determination of Rates and Collection) Rules, 2008, which stipulates that tolls can only be collected after a section of the national highway is deemed complete.

Key Issues:

The High Court's ruling focused primarily on the interpretation of the term "section of national highway" as defined in the 2008 Rules. However, the Supreme Court's review highlighted that the 2008 Rules and the National Highways Act, 1956, did not explicitly define this term. Instead, the Court emphasized that the High Court's judgment did not fully consider the operational and contractual aspects of the highway project.

The case details revealed that a notification dated November 26, 2013, had declared the completion of two-laning with paved shoulders over a 61.70-kilometer stretch of the highway and 20.38 kilometers of bypasses. The notification also outlined the prescribed toll rates for these segments. Furthermore, a provisional completion certificate issued by Intercontinental Consultants and Technocrats Pvt. Ltd. on June 29, 2015, confirmed the completion status.

Supreme Court's Ruling:

The Supreme Court’s judgment scrutinized the factual matrix of the case, noting that the High Court's decision did not adequately address the context in which tolls were being collected. The Court pointed out that tolls collected prior to the High Court’s stay order had been deposited in a nationalized bank, and the private contractor responsible for the highway’s construction had already been compensated through annuities. The annuities were structured to cover costs over 15 years.

The Court determined that reversing the High Court's decision at this juncture could adversely impact road users by necessitating additional toll collection to offset the costs already incurred. It was therefore decided that the toll fees collected, including interest, would remain in the nationalized bank and be applied towards the recovery of actual project costs.

Future Considerations:

While setting aside the High Court’s judgment, the Supreme Court recommended that the Union of India and NHAI review whether the term "section of national highway" should be further clarified within legal frameworks. This recommendation aims to prevent future ambiguities and ensure clearer guidelines for toll collection practices.

Conclusion:

The Supreme Court’s ruling marks a pivotal moment in the ongoing discourse on highway toll collection and project completion criteria. By overturning the High Court’s directive and allowing NHAI to retain and utilize the collected tolls, the Court has reinforced the importance of considering practical and contractual realities in legal judgments concerning infrastructure projects.

  National Highways Act, 1956