On Friday, December 20, the Supreme Court rejected the plea of the Noida Toll Bridge Company Ltd. (NTBCL) to continue imposing tolls on commuters using the Delhi Noida Direct (DND) flyway. The bench, comprising Justices Surya Kant and Ujjal Bhuyan, upheld the 2016 ruling of the Allahabad High Court, which had struck down the concessionaire agreement in favor of NTBCL on the grounds that the company had already recovered its costs and made significant profits.
Background of the Case
The matter stemmed from a Public Interest Litigation (PIL) filed by the Federation of Noida Resident Welfare Associations, challenging the toll charges levied by NTBCL. The High Court had ruled that the Noida Authority (NOIDA) had exceeded its powers by delegating toll collection rights to NTBCL through a concession agreement that effectively allowed the company to continue collecting tolls even after recovering the initial investment and maintenance costs. The Court found that this led to unjust enrichment at the expense of the public.
Supreme Court’s Ruling
In its judgment, the Supreme Court agreed with the findings of the Allahabad High Court. The bench stated, “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,” adding that NTBCL was unjustly enriching itself at the cost of public suffering. The Court noted that the general public had been forced to pay substantial toll amounts, which resulted in unfair profits for the company.
The Court further stated that since the project cost, maintenance costs, and profits had already been recovered by NTBCL, there was no justification for continuing the toll collection. The language of the concessionaire agreement, according to the Court, was designed to keep the toll charges in place perpetually, thereby unfairly benefiting NTBCL.
Violation of Constitutional Provisions
The Supreme Court relied on a report from the Comptroller and Auditor General (CAG) of India, which highlighted the improper and unjust nature of the toll formula used in the concession agreement. The Court also referred to how the unrealistic return rates and the compounding formula contributed to a growing, unrecovered project cost, ultimately placing an undue burden on the users and violating Article 14 of the Constitution, which guarantees equality before the law.
The Court further emphasized that the selection of NTBCL was done without issuing a tender or inviting competitive bids, which violated the principles of fairness and transparency mandated by Article 14. It was noted that the government had made no effort to seek bids from other interested private companies, which was a failure to follow due process in awarding the agreement.
PIL Maintainability and Public Interest
The Court also ruled that the PIL filed by the Federation of Noida Resident Welfare Associations was maintainable, as public money and public assets were involved in the case, despite the fact that the dispute concerned a commercial contract.
The judgment thus reinforced the principles of transparency, fairness, and accountability in the use of public funds and the management of public infrastructure projects.
Case Details
Case Title: Noida Toll Bridge Company v. Federation of Noida RWA
SLP(C) No. 33403/2016
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