2001 (9) TMI 1150 - SC - Indian Laws

Supreme Court Restores Trial Judge's Decision on Durgapur Expressway Toll Collection

The Supreme Court set aside the Division Bench's order and restored the Trial Judge's decision in a case involving toll collection on the Durgapur ... - Issues Involved:1. Right to collect toll charges on Durgapur Expressway.2. Validity and implications of the Memorandum dated 11.3.1998.3. Authority of the National Highways Authority of India (NHAI) versus the State Government.4. Legitimacy of the contract extension claims by the toll collector.5. Appointment and effectiveness of the Court-appointed Receiver.6. Public interest and loss to public revenue.Detailed Analysis:1. Right to Collect Toll Charges on Durgapur Expressway:The dispute centers on the right to collect toll charges from vehicles using part of the Durgapur Expressway, a stretch of 48 km on National Highway No.2. The Central Government, through Section 5 of the National Highways Act, 1956, had delegated the execution of works to the State Government of West Bengal. However, a subsequent Notification dated 4.2.1999 under Section 11 of the National Highways Authority of India Act, 1988, entrusted the highway to the NHAI, making it the Executing Agency.2. Validity and Implications of the Memorandum dated 11.3.1998:The Memorandum dated 11.3.1998 issued by the Joint Secretary, PW (Roads) Department, contained proposals for the toll collector but did not constitute final orders for an extended contract. The subsequent Memorandum dated 24.8.1999 clarified that the earlier memo had no application in the matter of toll collection, indicating that no amended agreement was executed based on the proposals.3. Authority of the National Highways Authority of India (NHAI) versus the State Government:With the issuance of the Notification dated 4.2.1999, the NHAI became the Executing Agency, replacing the State Government. The Central Government's statutory rules and instructions governed the toll collection, and any extension of the contract required the Central Government's approval. The State Government could not unilaterally extend the contract for 30 years without such approval.4. Legitimacy of the Contract Extension Claims by the Toll Collector:The toll collector claimed an extended contract period based on the Memorandum dated 11.3.1998. However, the Supreme Court found that this memorandum did not create any enforceable rights for an extended contract. The initial contract was for one year, and any extension required compliance with statutory rules and Central Government approval, which was not obtained.5. Appointment and Effectiveness of the Court-appointed Receiver:The Division Bench of the Calcutta High Court had appointed an Advocate-Receiver to supervise toll collection. The Supreme Court observed that the Receiver's appointment was impractical and ineffective, leading to irregular and insufficient toll collections. The Receiver's inability to safeguard public revenue was noted, and the Court ordered the Receiver to be discharged.6. Public Interest and Loss to Public Revenue:The Supreme Court emphasized the significant public interest and potential loss to public revenue due to the toll collector's defaults and the ineffective supervision by the Receiver. The Court highlighted the necessity of competitive bidding and adherence to statutory rules to protect public exchequer interests.Conclusion:The Supreme Court set aside the Division Bench's order dated 20.11.2000 and restored the Trial Judge's order. The Court discharged the Advocate-Receiver and authorized the NHAI to assume control and regulate toll collection. The judgment underscored the importance of statutory compliance, competitive bidding, and protecting public revenue in toll collection contracts. The appeals were allowed, and no costs were imposed.