BOT toll collection upheld where contractual rate escalation and concession terms matched the statutory framework.

Toll collection under a BOT arrangement was upheld where the statute authorised levy and the tender and agreement contemplated periodic rate escalation. The court found that the revised notification correcting an earlier omission merely aligned the rates with the contractual terms and was not arbitrary. It also held that continuation of toll collection until the contractual concession period ended, including collection permitted during the construction period, was lawful because the project cost had not been fully recovered and no unlawful enrichment was shown. The challenge to the notification and collection arrangement therefore failed.

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Issues: (i) Whether the revised notification enhancing toll rates from 1 March 2003 was illegal or arbitrary. (ii) Whether the respondent was entitled to continue toll collection under the BOT arrangement until the contractual period ended, including the collection permitted during the construction period.

Issue (i): Whether the revised notification enhancing toll rates from 1 March 2003 was illegal or arbitrary.

Analysis: Section 20(1-A) of the Bombay Motor Vehicles Tax Act, 1958 permits levy and collection of toll on specified bridges and roads, including under BOT arrangements. The record showed that the tender condition contemplated increase in toll rates after every three years, and the omission in the initial notification was a mistake later corrected by the State. The revised notification only aligned the notification with the agreed terms and did not confer any undue benefit.

Conclusion: The revised notification enhancing toll rates was held to be valid and not arbitrary.

Issue (ii): Whether the respondent was entitled to continue toll collection under the BOT arrangement until the contractual period ended, including the collection permitted during the construction period.

Analysis: The bridge was undertaken under the BOT scheme pursuant to a tender and agreement, and the concession period was fixed up to 3 December 2005. The agreement also allowed toll collection upon early completion of the work, and the project cost or capital outlay had not been fully recovered on the material placed before the Court. In these circumstances, the collection of toll in accordance with the contract and the statutory framework could not be treated as unlawful or as conferring undeserving benefit.

Conclusion: The respondent was held entitled to continue toll collection in accordance with the agreement and Section 20(1-A) of the Bombay Motor Vehicles Tax Act, 1958.

Final Conclusion: The challenge to the toll notification and the toll collection arrangement failed, and the petition was dismissed.

Ratio Decidendi: Where toll collection under a BOT arrangement is authorised by statute and is consistent with the tender conditions and agreement, the court will not interfere merely because the notification initially omitted an agreed rate escalation or because the concession period has not expired, absent proof of arbitrariness or unlawful enrichment.

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