'Defrauding Public, NOIDA's Agreement Arbitrary' : Supreme Court Rejects Plea To Levy Toll On Delhi-Noida Direct Flyway Commuters

The Supreme Court on Friday (December 20) rejected the plea of the Noida Toll Bridge Company Ltd. to impose tolls on the commuters of Delhi Noida Direct (DND) flyway.

A bench comprising Justices Surya Kant and Ujjal Bhuyan rejected the company's appeal against Allahabad High Court's judgment of 2016 which struck down the concessionaire agreement in its favor, on the ground that it had recovered its costs and made sufficient profits. The High Court's ruling came in a PIL filed by Federation Of Noida Resident Welfare Association.

Concurring with the High Court's findings, the Supreme Court ruled that "NOIDA overstepped its authority by delegating the power to levy fee to NTBCL through the concession agreement and regulations, exceeding the scope of its power" and that there was "unjust enrichment of NTBCL at the cost of public suffering".

"General public has been forced to part with several hundreds of crores and even defrauded under the guide of providing public infrastructure...Considering the appellant has recovered the project cost, maintenance cost as well as [made] profit on its initial investment, there seems to be virtually no reason for the collection of user fees//toll to continue.." the bench pronounced. The language of the concessionaire agreement was "deliberately crafted" such that it was perpetually in effect and thus forever unjustly enriching NTBCL at the cost of NOIDA, it said.

Relying on the report of the Comptroller and Auditor General of India, the Court added, "[it] has very aptly highlighted the contributors to the growing unrecovered total project cost...we have held that the compounding nature of the formula, coupled with the unrealistic return rates and serious impropriety by all stakeholders involved has resulted in undue and unfair burden on the users, thereby contravening Article 14 of the Constitution".

The Court further noted that there was no tender from other interested companies and no competitive bidding was done. Hence, the award of the agreement to the NTBCL was violative of Article 14 of the Constitution and illegal.

"When a state undertakes a project involving an overwhelming public element, comprising of public funds and public assets, its actions must remain free of arbitrariness and remain grounded in a just, transparent and a well-defined policy. In this case, the government seems to have made no efforts to issue tender, invitations or seek competitive bids from other interested private companies. There is also nothing on record to suggest that following such a procedure would have been detrimental to the proposed project...selection of NTBCL without following proper procedure was in contravention of Article 14 of the Constitution."

The Court also held that the PIL was maintainable as public money was involved, although it was regarding a commercial contract.

Story to be updated after the judgment is uploaded.

Appearance: Senior Advocates Dr Abhishek Manu Singhvi and Gopal Jain; Mr. Raunak Dhillon, Ms. Madhavi Khanna and Mr Nihaad Dewan (Cyril Amarchand Mangaldas team)

Case : Noida Toll Bridge Company v. Federation of Noida RWA, SLP(C) No. 33403/2016