Madras HC Issues Notice On Plea Challenging Special Discounts Offered To Fast Tag Holders [Read Order]

A challenge has been made to a circular dated January 15, 2020, whereby the NHAI has restricted the discounts applicable on fee plaza like return fare discount and local exemption to payments made via FASTag only.

The impugned circular stipulates,

"No return journey discount shall be provided to toll payments paid in cash or any other modes w.e.f 15 January, 2020. Similarly, all local discount shall be provided to concessionaire/toll plaza operators through FASTag only w.e.f 15 January, 2020."

The Petitioner has challenged the circular on the ground of discrimination between the vehicles not having the FASTag device and those vehicles having FASTag device.

He has argued that issuance of a circular to restrict discounts to a particular mode of payment was an executive action, not backed by any legislation.

Pertinently, Rule 9 of the National Highways Fee (Determination of Rates and Collection) Rules, 2008 as well as the National Highways Fee Determination of Rates and Collection) Amendment Rules, 2016 provide for discounts where multiple journeys are undertaken to cross the toll plaza without making any difference as to the mode of payment.

Thus, it has been argued that the Respondents could not restrict discounts to FASTag users only by way of a circular, when the Rules having statutory force did not provide for any such discrimination.

"If an executive action is prejudicial to any person, it is to be necessarily backed by a legislation…just because a person pays by cash, he cannot be deprived of the discount which otherwise was provided under Rule 9 of the 2008 Rules and also under the 2016 Rules," the Petitioner submitted.

After hearing the Petitioner, the court noted that even after introduction of FASTag by the 2016 Rules, an user of National Highway who crossed the fee plaza multiple times was entitled to discount whether the mode of payment was cash or by FASTag. After four years however, the Central Government issued the impugned notification restricting the right to avail discount only to those vehicles which are fitted with the FASTAg device.

Reserving its doubts about the said move, a division bench comprised by Chief Justice AP Shah and Justice Subramonium Prasad has decided to examine the validity of the impugned circular inasmuch as it restricts discounts to users of FASTag only.

"It has been held that circulars cannot amend rules having statutory force. Similarly, the power to give discount or withdraw them is ordinarily in the domain of the State. Similarly, if executive instructions are contrary to the rules, then the rules and not the executive instructions would prevail. We have therefore now to examine as to whether the impugned circular issued by the Government can limit the discount which was available to users of fee plaza by paying cash can be withdrawn to their disadvantage," the bench said.

While issuing notices, the court asked both the Union of India and the NHAI to answer the following questions by filing an affidavit returnable in one week:

• (i)whether the circular dated 15.01.2020 (impugned herein in the writ petition) has effect of amending the Rule 9 of 2016 Rules.
• (ii)If the answer is yes, then is not the circular ultra vires the rule.
• (iii)If the circular in the nature of a direction which can be issued under Section 6, then can such direction be issued which will have an effect of amending the rule itself.

The matter will now come up on March 30.

Case Details:

Case Title: P Saravanan v. Union of India

Case No.: WP No. 2472/2020

Quorum: Chief Justice AP Shah and Justice Subramonium Prasad

Appearance: Advocate A. Mohamed Ismail (for Petitioner); Assistant Solicitor General of India G. Karthikeyan (for Respondents)

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