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Informist, Friday, Dec. 20, 2024

 

--SC: See no reason for toll fee collection continuing at DND flyover 
--CONTEXT: SC on Noida Toll Bridge's plea in DND flyover toll case 
--CONTEXT: HC had barred Noida Toll Bridge from charging toll at DND flyover
--SC: DND flyover toll contract to Noida Toll Bridge unjust, arbitrary 
--SC:NOIDA giving power to Noida Toll Bridge to levy DND flyover fee illegal 
--SC OKs HC order barring Noida Toll Bridge from levying toll at DND flyover 

 

NEW DELHI – The Supreme Court on Friday upheld the Allahabad High Court's 2016 order barring Noida Toll Bridge Co. Ltd. from collecting toll on the DND flyway between New Delhi and Noida, Uttar Pradesh. 

 

When a state engages in public work, it must be free of arbitrariness, the apex court said. "There was no tender from other interested companies and no competitive bidding was done," the court said. Noida overstepped its authority by delegating powers to Noida Toll Bridge Co. to collect toll, or levy user fees, and this was alien to the terms of the concession agreement, the court said.

 

Further, the Supreme Court said the Comptroller and Auditor General's report highlighted the growing nature of unfinished project costs. In the current case, it resulted in undue burden on users, and was violative of Article 14 of the Constitution of India. "The language of the concession agreement is such that it is perpetually in effect and, thus, forever enriching Noida Toll Bridge Co. at the cost of Noida," said the court.

 

"Thus, we hold that the general public has parted with several hundreds of crores and been defrauded by Noida Toll Bridge," the court said. There is no reason for the collection of user or toll fee to continue, the court said, adding that Article 14 of the concession agreement between Noida, Noida Toll Bridge and Infrastructure Leasing & Financial Services Ltd. was invalid. The court said the contract awarded to Noida Toll Bridge was unjust, unfair and arbitrary, and that Noida delegating power to the toll company to levy the user fee was illegal.

 

The case has its genesis in Noida making an arrangement with Noida Toll Bridge, the concessionaire, for the construction of the eight-lane DND flyway, stretching 9.2 km from Noida to Delhi, under the build-own-operate-transfer model. Noida Toll Bridge was promoted by Infrastructure Leasing & Financial Services.

 

Initially, Noida Toll Bridge charged a toll of INR 8 per car, which was hiked to INR 22 and then to INR 25 in 2012. The charge for two-wheelers was INR 12 per vehicle. Aggrieved by the increasing toll, members of the Federation of Noida Residents Welfare Associations made an enquiry which brought to light that Noida had authorised Noida Toll Bridge to impose and realise a user fee under a 1997 concession agreement. Under the agreement, Noida Toll Bridge was given the power to increase toll charges from time to time. Challenging the levy and collection of toll in the name of 'user fee' by Noida Toll Bridge, the association moved the high court.

 

According to the association, the total cost of the project--relating to the flyover and support roads--incurred by Noida Toll Bridge till the date of commissioning was around INR 4.08 billion. From 2001 to 2014, the cumulative toll income was INR 8.04 billion. Other income from hoardings, among others, was INR 380.1 million, it added. Hence, the total income till 2014 was INR 8.41 billion, which was more than double the total cost of the project incurred by the concessionaire, the association said. As of 2014, the cumulative net profit was INR 1.66 billion. Thus, Noida Toll Bridge earned profit which was more than 20% of its investment, after exclusion of expenses till 2014, the association said. From 2014 to 2016, it collected  further toll, or user fee, of around INR 3 billion, the association said. 

 

The concept of user fee, or toll, was to meet the "cost of construction" plus some reasonable returns on the investment, the association said. As soon as the entire "cost of construction" plus reasonable returns had been realised by way of toll, the bridge and road should have been exempted from toll or user fee, it said, adding that there is no justification for continuing toll collection now.  End

 

Reported by Surya Tripathi

Edited by Namrata Rao

 

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