23

Dec

SC Ruling Makes DND Flyway Toll-Free

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Prof Shivaji Sarkar

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New Delhi | Monday | 23 December 2024

Indian citizens burdened by skyrocketing tolls, inflated prices, and the controversial FASTag system have received a minor reprieve. In a landmark decision, the Supreme Court (SC) upheld the Allahabad High Court’s 2016 ruling, declaring the 9.2 km Delhi-Noida-Direct (DND) flyway toll-free. The SC dismissed a plea by Noida Toll Bridge Company Ltd. (NTBCL) challenging the decision, marking a victory for public interest and paving the way for broader implications in toll governance.

This judgment underscores the inherent flaws in the toll collection model, particularly agreements with private entities like NTBCL, which the SC deemed “unjust, unfair, and arbitrary.” It raises fundamental questions about the rationality of toll impositions, especially on roads built with taxpayer money. The ruling offers a glimmer of hope for millions of commuters and suggests a future where highways might be free from unjustified tolls, easing financial pressures on citizens.

The SC’s decision has far-reaching implications, not just for DND flyway users but for commuters nationwide. The apex court criticised NTBCL for recovering its costs within a short span while continuing to extract tolls, a practice deemed exploitative. A bench comprising Justices Surya Kant and Ujjal Bhuyan invalidated the toll collection agreement, stating there was no justification for continuing to levy user charges. The ruling also exposed systemic issues, such as delegating toll collection powers to entities with little to no relevant experience, which often leads to public exploitation.

 

Article at a Glance
In a significant ruling, the Supreme Court of India upheld the Allahabad High Court's 2016 decision to make the 9.2 km Delhi-Noida-Direct (DND) flyway toll-free, dismissing a challenge from the Noida Toll Bridge Company Ltd. (NTBCL).
This landmark judgment highlights the flaws in the current toll collection model, particularly the unjust agreements with private entities, which the court deemed exploitative. The ruling not only provides immediate financial relief to commuters but also raises critical questions about the fairness of tolls on taxpayer-funded roads.
It sets a precedent for challenging similar tolls nationwide, advocating for transparency and accountability in public resource management. As the government considers reforms, this decision serves as a reminder of the need for a fairer toll system that prioritizes public welfare over profit.

 

The judgment benefits lakhs of daily commuters between Delhi and Noida, offering immediate financial relief and time savings. More importantly, it challenges the broader framework of toll collection on public roads, sparking debates about the ethical and legal grounds of such levies.

The DND case highlights the ongoing strife between citizens and authorities imposing arbitrary tolls. Public highways, constructed on land acquired using taxpayer money, are increasingly monetized through tolls and cess, raising questions about their fairness. For instance, petrol cess earnings amounting to Rs 18,02,463 crore from 2018-2021 remain shrouded in ambiguity, with no transparent allocation for highway maintenance or development.

Such practices inflate transportation costs, cascading into higher commodity prices and contributing to overall inflation. The SC’s decision provides a legal precedent that could be leveraged to challenge tolls on other highways, ensuring a more equitable system for road users.

One of the SC’s key observations was the unjust enrichment of private firms like NTBCL, enabled by poor governance. The court criticized the Noida Authority for delegating toll collection powers without adequate oversight. This led to the general public parting with hundreds of crores in an arrangement that lacked transparency and accountability.

The Allahabad High Court, in its 2016 ruling, had similarly condemned the toll collection model, terming it an excessive delegation of authority contrary to the provisions of the Uttar Pradesh Industrial Development Act. The Public Interest Litigation (PIL) filed in 2012 questioned the legality of toll levies under the guise of user fees. It revealed that the right to collect toll was neither legally supported nor ethically justified, further corroborated by the Comptroller and Auditor General (CAG) report highlighting inflated project costs and unrealistic profit margins guaranteed to NTBCL.

The SC’s judgment serves as a wake-up call for revisiting the national toll policy. Arbitrary toll hikes, such as the 5% increase on June 3, 2024, despite a 35% jump in toll revenue to Rs 648 billion, highlight systemic flaws. The toll road network has expanded from 25,996 km in 2019 to 45,428 km in 2024, placing a growing financial burden on commuters.

The judgment’s implications extend beyond financial relief. It sets a precedent for questioning the imposition of tolls on roads built with public funds. If principles similar to the DND ruling are applied universally, they could result in the abolition of tolls on all National Highways Authority of India (NHAI) roads. Such a move would ease the cost of living, reduce inflationary pressures, and ensure fair utilization of public resources.

International experiences also provide valuable insights. A Japanese study revealed that highway construction led to a 5.3% rise in retail butter prices between 1966 and 1980 due to increased travel costs. While India lacks such detailed studies, the correlation between tolls and commodity prices is evident. The DND judgment highlights the need for similar research to gauge the broader economic impact of toll policies.

The DND toll controversy underscores the need for comprehensive reforms in India’s toll collection system. Citizens deserve greater transparency and accountability in the utilization of funds generated through petrol cess and toll revenues. The current model, which prioritizes revenue generation over public welfare, must be replaced with a fair and equitable system that respects taxpayers’ contributions.

The SC’s ruling also raises ethical questions about the privatization of public infrastructure. While private investments are crucial for infrastructure development, they should not come at the cost of public exploitation. The government must strike a balance between attracting private players and safeguarding citizens’ interests.

The year 2024-25 could mark a turning point if the principles of the DND judgment are applied universally. Scrapping tolls on NHAI roads and ensuring accountability in cess utilization could significantly reduce transportation costs and inflationary pressures. Such measures would align with the broader goal of inclusive economic development, ensuring that public infrastructure serves the public good.

The DND toll judgment is a beacon of hope for Indian road users, emphasizing the importance of fairness, transparency, and accountability in governance. It is a reminder that public resources belong to the people and must be managed in their best interests. As citizens await broader implementation of these principles, the ruling stands as a testament to the power of judicial intervention in safeguarding public welfare.

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