Bombay High Court
M/S. Sion Panvel Tollways Pvt. Ltd vs The State Of Maharashtra And Ors on 8 September, 2015
hcs
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 5764 OF 2015
WITH
CIVIL APPLICATION NO.1782 OF 2015
WITH
CIVIL APPLICATION NO. 1783 OF 2015
WITH
CIVIL APPLICATION NO. 2320 OF 2015
WITH
CIVIL APPLICATION ST NO. 20760 OF 2015
ig WITH
CIVIL APPLICATION ST NO. 20758 OF 2015
WITH
CIVIL APPLICATION ST NO. 20761 OF 2015
M/s Sion Panvel Tollways Pvt. Ltd.,
through its Authorized Signatory,
Rajendra Mahajan
Co-operative Housing Society,
Koregaon Park, Pune 411 001. ...Petitioners
V/s.
1. The State of Maharashtra
Through Chief Secretary,
Mantralaya, Mumbai 400 032. ...
2. The Public Works Department,
Government of Maharashtra,
Through its Secretary (Roads)
Mantralaya, Mumbai 400 032. ...
3. The Chief Engineer,
Special Projects,
Public Works Department,
Fort Mumbai. ...Respondents
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WITH
WRIT PETITON NO. 6577 OF 2015
M/s Sion Panvel Tollways Pvt. Ltd.,
through its Authorized Signatory,
T.K. Karthikeyan,
IVRCL House, 35, Suyojana
Co-operative Housing Society,
Koregaon Park, Pune 411 001. ...Petitioners
Vs.
1. The State of Maharashtraig
Through Chief Secretary,
Mantralaya, Mumbai 400 032. .
2. The Public Works Department,
Government of Maharashtra,
Through its Secretary (Roads)
Mantralaya, Mumbai 400 032. ...
3. The Executive Engineer,
Multistory Building Construction
Division, Opp. Naaz Hotel,
L.B.S. Road, Kurla (West),
Mumbai - 400 070 ...
4.The Superintendent Engineer,
Mumbai Construction Circle,
Chembur, Mumbai ...
5. The Chief Engineer,
Special Projects,
Public Works Department,
Fort, Mumbai. ... Respondents
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WITH
PUBLIC INTEREST LITIGATION NO.239 OF 2013
Mr. Vijay Jagganath Mane
Age-40 years, Occupation:Business,
Having address at Shop No. 4
Sagar Darshan CHS., Plot No. D91,
Sector-18, Nerul (West),
Navi Mumbai-400 706 ...Petitioners
Vs.
1.The State of Maharashtra ...
2. Minister,
Public Works Department,
State of Maharashtra, Mantralaya
Mumbai. ...
3. Secretary,
Public Works Department,
State of Maharashtra, Mantralaya
Mumbai. ...
4. Chief Engineer,
Public Works Department,
State of Maharashtra, Mantralaya
Mumbai. ...
5. Executive Engineer,
Multi Storeyed Building,
construction Division, Industrial
Chemical Lab Building, 1st Floor
V.N. Purav Marg, Chunabhatti,
Mumbai- 400 022. ...
6. Executive Engineer,
Multi Storeyed Building,
construction Division, New
Administrative Building, 3rd Floor
Naaz Hotel, L.B.S. Marg, Kurla (West)
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Mumbai - 400 070. ...
7. M/s Sion Panvel Tollways Pvt. Ltd.
IVRCL House, 35, Suyojana CHS.,
Koregaon Park. Pune 411 001. ...
8. Essel Mumbai WTR Private Limited
513/A, 5th Floor, Kohinoor City,
Kirol Road, L.B.S. Marg, Off. Bandra
Kurla Complex, Kurla (West),
Mumbai - 400 070. ...
9. J. Kumar Infra Projects Ltd.,
16/A, Andheri Industrial Estate,
Vira Desai Road, Andheri (West),
Mumbai - 400 058. ...
10. J. M. Mahtre Infra Pvt. Ltd.,
Market Yard, Plot No. 57/58,
Sahakar Nagar, Panvel,
District -Raigad 410 206. ...
11. Deputy Commissioner of Police
Traffic Control Division,
Navi Mumbai ...
12. Superintendent of Gardens & Trees,
Having office at Veer Mata Jijabai
Bhosle Udyan, Dr. Ambedkar Road,
Byculla (East), Mumbai 400 027 ... Respondents
Mr. Milind Sathe, Senior Advocate with Dr. Birendra Saraf with Mr.
Hitesh Jain with Ms. Neha Prashant & Ms. Ankita Singh with Ms.
Karishma Rathod and Ms. Cheryl Fernandis i/b ALMT Legal for
petitioner in wp 5764/15 and wp 6577/15.
Mr. Vineet B. Naik, Senior Advocate and Spl counsel with A. B.
Vagyani, G.P. and Mr. V. B. Thadani, AGP for Respondent State in
wp 5764/15, wp 6577/15 CAST 20758/15, CAST 20760/15, CAST
20761/15 and CAW 1783/15.
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Mr. A. Y. Sakhare, Senior Advocate with Mr. A. B. Vagyani, G.P and
Mr.P. G. Sawant AGP for Respondent State in PIL 239/13 & CA No.
2320/15.
Mr. Ahmed Abdi i/b Abdi & Co. for Applicant in CAST 20761/15.
Ms. Urjita Badheka with Mr. Ambika Singh a/w Ms. Manorama
Mohanty i/by S. K. Srivastava and Co for R. No 7 and 8 in PIL
239/13
Mr. Hanumant Govind Wakshe for petitioner in PIL 239/13.
Mr. Prashant P. Chavan i/by Ravindra R. Chile for Respondent No 2
(MSRDC)
Mr. Janak Dwarkadas, Senior Advocate with S. Jagtiani with
Teresa Daulat i/b Divya Shah & Co. in WP No.7573/15, 7574/15
and 7575/15.
Mr. S. M. Mushrif for Applicant in CAWST 2320/15,
Mr. Pravin Upadhyay for Applicant in CAWST. 20760/15
Mr. Anil Y. Sakhare, Senior Advocate i/by Pralad Paranjape &
Ruturay Pawar for Intervenor in CAW 1783/15
CORAM : MOHIT S. SHAH, C.J. &
A.K. MENON, J.
RESERVED ON : 25 AUGUST 2015
PRONOUNCED ON : 8 SEPTEMBER 2015
JUDGMENT (PER A.K. MENON, J.)
1. Historically speaking toll roads have been in existence
since ancient times, be it across plains or mountain passes,
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through the middle ages till this age as well. The present petitions
arise out of a Concession Agreement in respect of a road tolling
project. The petitioner in petition no. 5764 of 2015 and 6577 of
2015 ("the petitioners") as the "Concessionaire" was required to
widen and develop an existing highway which in the petitioners'
words is the gateway from Mumbai to the southern parts of India.
The petitioners are required to maintain the road while collecting
toll for a concession period of 17 years and 5 months. The
highway leads from the island city of Mumbai into Panvel in the
Raigad District via Thane. This is the only highway access up to
Panvel from where other options are available onwards to Pune
such as the Mumbai Pune expressway or old Mumbai Pune road.
2. A few facts may be set out before considering the
merits of the case. The petitioners are a private limited company
which was awarded a project for construction, operation and
maintenance of the road commencing from the junction of Bhabha
Atomic Research Centre Junction (CH-140/690) upto Kalamboli
Junction (CH-115/800). The contractor was awarded by the State
of Maharashtra through it Public Works Department and vide a
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letter of acceptance dated 15.9.10. The project was awarded on a
Built, Operate and Transfer basis (BOT). The respondent no.1 in
the present petition is the State of Maharashtra, respondent no.2 is
the Public Works Department and respondent no.3 is the Chief
Engineer of the Public Works Department. The entire length of the
project is 23.09 km and is spread over Mumbai, Thane and
Raigad. The project includes collection of toll at plazas at
Kamothe and Kopra. It is a welfare project undertaken by
respondent nos.2 and 3 to strengthen an arterial road.
3. The petitioners entered into a concession agreement
with respondent no.1 on 19 January 2011 ("the agreement") after
a competitive bidding process. The agreement provided that after
work is completed and a provisional completion certificate is
issued, the State would issue a notification under the provisions of
the Bombay Motor Vehicles Tax Act, 1958 thereby authorising
collection of toll. According to the petitioners there was
unjustified delay in issuance of the toll notification by the
respondent no.2 because of which the petitioners suffered losses.
The petitioners filed a writ petition in this Court being writ
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petition(L)no.3170 of 14 seeking orders directing respondent no.2
to publish a toll notification as required under the agreement.
Under the agreement, the petitioners have been granted the right
to collect toll for 17 years and 5 months including the construction
period of 3 years.
4. On 23 December 2014, this Court directed respondent
no.2 to issue the notification. The notification was issued on 3
January 2015 as directed, permitting levy and collection of toll
from 1 January 2015 but only until 30 June 2015. Even this
notification according to the petitioners did not comply with the
requirements of the concession agreement, since the respondents
had granted additional exemptions beyond what was
contemplated under the agreement. In the result, the petitioners
complained that its losses were mounting. The notification dated
3 January 2015 contained a schedule appended thereto listing out
the tariff for toll collection with description of the vehicles and the
amount of the toll to be collected. This included light motor
vehicles at serial no.2A and buses of the Maharashtra State Road
Transport Corporation ("MSRTC").
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5. On 26 May 2015 a further notification bearing no.
PSP.2006/C.R.-181/(Part-3)/Road-9A came to be issued whereby
the respondent in exercise of powers conferred by sub-section 1(E)
of section 20 of the Maharashtra Motor Vehicles Tax Act exempted
light motor vehicles and buses of MSRTC from payment of toll
w.e.f 1 June 2015. Thus while the notification dated 3 January
initially permitted the collection of toll upto 30 June 2015, by the
impugned notification of 26 May 2015 not only was the petitioners
prevented from collecting toll from light motor vehicles of MSRTC
buses after 30 June 2015 but the petitioners could not collect toll
on the exempted categories of vehicles from 1 June itself.
6. The petitioners therefore filed the second petition
No.6577 of 2105 on 30 May 2015. An ad-interim application was
made on 30 May 2015 seeking stay of the notification. The Court
declined to grant the relief. As a result the petitioners filed a
Special Leave Petition before the Hon'ble Supreme Court which
came to be disposed of on 3 June 2015 granting liberty to the
petitioners to approach this Court for modification of the order, if
so advised. It is pursuant to this liberty that the present civil
application has been filed. We may clarify that the petition was
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initially filed on the original side and was transferred to the
appellate side in view of the fact that the area of operation of
contract extended upto to Panvel District Raigad. The Notice of
Motion taken out has therefore been numbered as a civil
application. PIL No.239 of 2013 was filed by the PIL petitioner
complaining about the work being carried on the highway. The
petitioner in the aforesaid writ petitions are party respondents and
hence PIL was directed to be heard alongwith said two writ
petitions.
7. The Civil Application was taken out in June 2015. On
30 June 2015 a further notification came to be issued whereby
apart from exempting light motor vehicles from collection of toll
and section claiming 2A of the schedule to the notification of 3
January 2015 buses of the MSRTC all vehicles coming from Taloja
MIDC and School buses were also exempted. The present petition
was amended and challenges both these notifications.
8. The Civil Application seeks stay on operation of
notification dated 26 May 2015 issued by respondent no.1 which
restricted the petitioner's right to levy and collect toll as per
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notification dated 3 January 2015. The petitioners also seeks stay
of the notification dated 30 June 2015 to the extent the
notification exempts collection of toll from light motor vehicles,
buses of the Maharashtra State Road Corporation (MSRTC), all
vehicles coming from Taloja MIDC area and school buses.
According to the petitioners, after the agreement was executed on
19 January 2011 there was unjustified delay in issuance of
notification by respondent no.2 because of which there was
already substantial delay in collection of toll resulting in financial
losses. The petitioners claim to have taken term loans of an
amount of Rs.1299.17 crores and construction was commenced on
29 May 2011 thereafter since some of the construction would be
within the 50 metres buffer zone of mangroves, permission was
obtained from this Court on or about 29 October 2013.
9. It is the petitioners case that the petitioners would only
recover Rs.26 lakhs per day after the issuance of the restrictive
notification dated 3 January 2015 and that meant there was a
reduction in collection of Rs.17 lakhs per day and as a result the
"Capital Outlay" as contemplated in the Maharashtra Motor
Vehicles Act, 1958 would not be achieved during the concession
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period. The petitioners contend that by virtue of the impugned
notifications, the toll collection will be lower than the actual
operating cost of the toll plaza, let alone maintenance costs.
According to the plaintiffs and according to the petitioners, the
action of the respondents in issuing the impugned notification is
arbitrary and they have, therefore, invoked the jurisdiction of this
Court under Article 226.
10.
The submissions on behalf of the petitioners are briefly
as follows:-
(i) The Notification issued by State Government dated 26 th May
2015 and 30th June 2015, exempting a class of vehicles
from payment of toll in deviation from the format
Notification appended in Schedule 'F' to the Concession
Agreement, is liable to be set aside and quashed as
arbitrary and unreasonable;
(ii) The exemptions granted are causing a loss of about Rs.45
lakhs a day;
(iii) The State Government should be directed to issue
appropriate orders/authorisations/notifications to
empower the petitioners to levy, collect and recover toll
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from all vehicles (except the exempted category of
vehicles indicated in Schedule 'F' of the format
Notification).
(iii) The Concession Agreement entered into between the
petitioners and the State Government is not an ordinary
contract but is an extra ordinary contract and its
enforcement is in the public interest.
iv) The actions of the State Government are arbitrary,
unreasonable and violative of Article 14, 19 (1) (g) and
300 A of the Constitution of India.
v) That the actions of the State are against public interest.
vi) That the actions on the part of the Respondents are
contrary to and in violation of doctrine of legitimate
expectation / promissory estoppel.
The relevant prayers in the writ petitionno.6577 of
2015 are reproduced below :
(a) (i) That this Hon'ble Court be pleased to issue a writ of
certiorari or a writ in the nature of certiorari or any other
writ, order or direction under Article 226 of the
Constitution calling for the records and papers pertaining
to the impugned Notification being Exhibit "H" hereto,
and after going into the legality, validity and propriety of
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the impugned Notification, quash and set aside the
impugned Notification to the extent it exempts the
collection of toll from light motor vehicles as defined
under the Motor Vehicles Act, 1958 in column (a-ii) of the
Schedule, the buses of the Maharashtra State Road
Transport Corporation, all vehicles coming from Taloja
MIDC and school buses;
(a) (ii) That this Hon'ble Court be pleased to direct the
Respondents to re-issue/amend/rectify the impugned
Notification dated 30th June 2015 to bring it in direct
consonance with Schedule "F" of the Concession
Agreement dated 19th January 2011 as appended at Exh.
"B" hereto, and thereby allow the petitionerss to levy and
collect toll on that basis as agreed upon under the
Concession Agreement."
The relevant clauses of this agreement are as follows:-
2.1. Grant of Concession
Subject to and in accordance with the terms and
conditions set forth in this Agreement, GOM hereby
grants and authorizes the Concessionaire to investigate,
study, design, engineer, procure, finance, construct,
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operate and maintain the Project/Project Facility and to
exercise and/or enjoy the rights, powers, privileges,
authorisations and entitlements as set forth in this
Agreement, including but not limited to the right to levy,
demand, collect and appropriate Toll from vehicles and
Persons liable to payment of Toll for using the
Project/Project Facility or any part thereof (collectively
"the Concession").
2.2. Concession Period
The Concession hereby granted is for a period as per
accepted Bid in Financial Bid Volume III commencing
from the Commencement Date (the Concession Period)
during which the Concessionaire is authorized to
implement the Project and to operate Project Facility in
accordance with the provisions hereof. (as per Bidding
Data - volume II)
Provided that ;
(a) in the even of the Concession being extended by the GOM
beyond the said period in accordance with the provisions
of this Agreement, the Concession Period shall include
the period/aggregate period by which the Concession is
so extended, and
(b) in the event of Termination, the Concession Period shall
mean and be limited to the period commencing from the
Commencement Data and ending with the termination.
Article 4 provides for right to concession to levy, collect
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and appropriate toll. Article 4 reads thus :
4.1. Levy, Collection and appropriation of Toll
(a) Subject to the provisions of this Agreement, the
Concessionaire shall during Operations Period be
entitled to levy, demand and collect Toll in
accordance with the Toll Notification and to
appropriate the same. (as per schedule I)
(b) The GOM undertakes to publish to Toll
Notification as per Schedule 'F' after issue of
provisional completion certificate by Engineer in
Charge as per Schedule 'N'.
(c) The concessionaire shall give concession to users
as per Toll Notification.
(d) The Concessionaire shall not levy and collect any
Toll until it has received Toll Notification issued by
the GOM.
(e) The Concessionaire shall not collect any Toll in
relation to Exempted Vehicles.
(f) The Concessionaire shall conspicuously display the
Toll Rates at the Toll Plazas and also at a distance
about 200 meters ahead of Toll Plazas on either
side of Project Facility.
(g) The concessionaire shall provide uniform to staff
working on toll stations. The colour and type shall
be got approved from the Engineer in Charge.
(h) The concessionaire shall provide drinking water
and toilet facilities for the road users near the toll
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plaza.
(i) The concessionaire shall provide sufficient area
lighting near the toll plaza.
4.2. Revision of Toll
In the event of extension of Concession Period in
accordance with provisions of this Agreement, the
GOM shall issue revised Toll Notification (s)
taking into account increase in Toll rates (as
Specified in Schedule 'F' or as per contract data
Volume II).
4.3. Traffic Sampling :-
To ascertain the actual Toll income joint traffic
survey will be conducted after completion of 5
years from COD. The traffic survey will be
conducted twice in a year in the month of March /
October of every year of continuous period not less
than 7 days and average count will be taken as
base.
To compute yearly toll income the following
procedure shall be followed :
Yearly Toll Income - Average Traffic count of each
category worked out as above [x] prevailing toll
rate [x] 365 days [x] 0.85 [Discount factor for
coupons / Monthly passes] From actual Toll
income worked out as above, 10% will be
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deducted and there after from the balance toll
income, the estimated, Toll income during that
year considered in the cash flow submitted with
the bid, will be deducted and balance will be
shared equally with Authority.
(x) Article 5 provides for obligations and undertakings.
(xi) Article 5.3 provides for obligations of GOM.
(xii) Clauses (ix)and (x) of Article 5.3 provide for GOM to
compensate the additional amount either in the form
and extended concession period or in cash. These
clauses reads as follows :-
(ix) assist the concessionaire for shifting of utility and cutting of
trees if such utility and tree cause a material adverse effect
on the construction or maintenance of project Highway, to
seek the permissions from various department. The cost of
shifting of utility be borne by concessionaire. The
Concessionaire shall carry out the work of utility shifting
and tree cutting and will bear the cost to the extent
specified in the NIT. The GOM shall compensate the
additional amount over and above what has been provided
in the NIT to the Concessionaire either in the form of
extended concession period or in cash as would be decided
by Engineer in charge.
(As Per Contract Data - Vol. II)
(x) Shall carry out the necessary proceeding for the land
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acquisition and encroachment removal. The cost to the
extent as specified in NIT shall be borne by the
concessionaire.
The GOM shall compensate the additional amount over and
above what has been specified in the NIT to the
concessionaire either in the form of extended concession
period or in cash as would be decided by Engineer in
charge.
(xiii) Article 9 provides for project management and
operation.
(xiv) Article 9.2. provides for project completion and
reads as follows :-
9.2 Project Completion
(a) The Project shall be deemed to be complete and open to
traffic only when the Completion Certificate is issued
by the Engineer in charge in accordance with the
provisions of Article 9.3. (the "Project Competition")
(as per contract data in volume II).
(b) The Concessionaire guarantees that the Project
Completion shall be achieved in accordance with the
provisions of this Agreement on a date not later than
36 Calendar months from the Commencement Date.
("the Scheduled Project Completion Date") (As per
contract data in volume II).
(c) If the Project Completion is not achieved by the
Scheduled Project Completion Date for any reason
other than Force Majeure or reasons attributable to
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the GOM, the Concessionaire shall be liable to pay
liquidated damages for delay beyond the Scheduled
Project Completion Date, to the extent of Rs. 4.00 Lacs
per day for every day of delay. Provided that such
liquidated damages do not exceed in aggregate (As per
contract data Volume-II) Provided further that nothing
contained in this sub-article (d) shall be deemed or
construed to authorise any delay in achieving Project
Completion.
(d) If the COD does not occur within 180 days from the
Scheduled Project Competition Date, the GOM shall
subject to the provisions of this Agreement relating to
excuse from performance of the Concessionaire's
obligations hereunder, be entitled to Terminate this
Agreement in accordance with the provisions of Article
(xv) Article 9.4. provides for operation and maintenance
and reads as follows :-
9.4. Operation and Maintenance
The Concessionaire shall operate and maintain
the Project/project Facility by itself, or through a
Contractor and if required, modify, repair or
otherwise make improvements to the
Project/Project Facility to comply with
Specifications and Standards, and other
requirements set forth in this Agreement, Good
Industry Practice, Applicable Laws and
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Applicable Permits and manufacturer's
guidelines and instructions with respect to Toll
Plaza More specifically, the Concessionaire shall
be responsible for:
(i) ensuring smooth and uninterrupted flow of traffic
during normal operating conditions;
(ii) charging, collecting and appropriating Toll in
accordance with the Toll Notification and this
Agreement;
(iii)minimizing disruption to traffic in the event of
accidents or other incidents affecting the safety
and use of the Project/Project Facility by providing
a rapid and effective response and for this purpose
maintaining liaison with emergency services;
(iv)undertaking routine maintenance including
prompt repairs of potholes, cracks, concrete joints,
drains, line marking, lighting and signage;
(v) undertaking maintenance works in accordance
with Maintenance Manual and the maintenance
Programme;
(vi)preventing with the assistance of concerned law
enforcement agencies where necessary, any
unauthorised entry to and exit from the Project;
(vii)preventing with the assistance of the concerned
law enforcement agencies where necessary, any
encroachments on the Project/Project;
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(viii) adherence to the Safety Standards set out in
Schedule 'P'.
(xvi) Article 13 provides for change of scope of work.
(xvii) Article 13.2(e) provides for extension in
concession period in the event of change in scope
of work, which reads as follows:-
13.2(e) The Change of Scope Order shall be
effective and binging upon receipt thereof by the
Concessionaire. Notwithstanding a Dispute
regarding cost and time Concessionaire shall
proceed with the performance of such order
promptly following receipt thereof. Any Dispute
regarding the extension in the Concession Period
recommended by the Engineer in charge shall be
resolved in accordance with the Dispute Resolution
Procedure.
(xviii) Article 16 provides for events of default and
termination.
(xix) Article 16.1(b) provides for GOM in the event of
default and reads as follows:-
(b) The GOM Event of Default.
The following events shall constitute events of
default by the GOM (each a "GOM Event of
Default"), unless any such the GOM Event of
Default has occurred as a result of
Concessionaire Event of Default or due to a
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Force Majeure Event:
(1) The GOM is in breach of this Agreement and
has failed to cure such breach within
90(ninety) days of receipt of notice in that
behalf from the Concessionaire;
(2) The GOM repudiates this Agreement or
otherwise evidences as intention not to be
bound by this Agreement.
(3) The GOM or any the GOM Agency has by an
ig act of commission or omission created
circumstances that have a Material Adverse
Effect on the performance of its obligations
by the Concessionaire and has failed to cure
the same within 60 days of notice thereof by
the Concessionaire.
(4) The GOM has delayed payment of any
amount that has fallen due in terms of this
Agreements beyond 90 (ninety) days.
Any representation made or warranties given
by the GOM under this Agreement is found to
be false or misleading.
(xx) Article 16.2(3)(b) provides for termination for the
GOM event of default and reads as follows:-
(b) Termination for the GOM Events of Default
(1) The Concessionaire may, upon the occurrence
and continuation of any of the GOM Event of
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Event of Default terminate this Agreement by
issuing Termination Notice of h GOM.
(2) Upon Termination of this Agreement by the
Concessionaire due to a GOM Event of Default,
the Concessionaire shall be entitled to receive
from the GOM, by way or Termination
Payment a sum equal to:
(i) The total Debt Due, plus
(ii) 120% (one hundred twenty percent) of the
ig Equity subscribed in cash ans actually spent on
the Project if such Termination occurs at any
time during three years commencing from the
Comm Date and for each successive year
thereafter, such amount shall be adjusted every
year to fully reflect the changes in WPI during
such year and the adjusted amount so arrived
at shall be reduced by 7.5% (seven and half
percent) per annum.
(xxi) Article 16.4 provides for termination payment.
(xxii) Article 17 provides for change in law and
Article 17.2 provides for extension of
concession period on the basis of change in
law and reads thus:-
17.2 Extension of concession Period
The Engineer in charge shall upon being
notified by the concessionaire of the
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Change in Law and the proposed
amendments to this Agreement, assess
the change in the financial position as a
result of such Change of Law and
determine the extension to the
Concession Period so as to put the
Concessionaire in the same financial
position as it would have occupied had
there been no such Change in Law and
ig recommend the same to the GOM. The
GOM shall, within 60 days of receipt of
such recommendation, decide the
extension to the concession period
extend the Concession Period by such
period.
(xxiii) Article 19 provides for resolution of disputes by way
of amicable resolution, conciliation and arbitration
which, however, has been substituted by a
mechanism through Engineer In-charge, Chief
Engineer and a Committee. Substituted Article 19
reads as follows:-
Amicable Resolution ( This clause substituted the original
Arbitration clause )
(A) Save where expressly stated otherwise in this Agreement
any dispute, difference or controversy of whatever nature
26 wp5764.15
howsoever arising under, out or in relation to this
Agreement including in completion of the project between
the parties and so notified in writing by either party to
the other (The "dispute") in the first instance shall be
attempted to be resolved amicable by the Engineer and
charge and failing resolution of the same in accordance
with the procedure set forth in sub-article (b) below
(B) Either party may require the dispute to be reformed to
the Superintending Engineer. The Superintending
Engineer shall give his decision within 30 days. The
Concessionaire may within 30 days of receipt by him of
any order passed by the S.E as aforesaid appeal against it
to the Chief Engineer.
The Chief Engineer shall give his decision within 30 days.
In case the Concessionaire is not satisfied with the
decision of the Chief Engineer, the Concessionaire may
request in writing to the Secretary Public Works
Department, Govt. of Maharashtra. The Secretary PWD
if convinced that prima facie the Concessionaire's claims
of rejected by the SE/CE is not frivolous and that there is
some substance in the claims of the Concessionaire as
would meant a detailed examination and decision by
standing committee refer the dispute to the standing
committee setup at Govt. level vide P.W. Department's GR
No. ...... 2002/CR-116/rd-9 dated 11.3.03.
C) Pending the submission of and/or decision on a
dispute, difference or claims or until the decision of
27 wp5764.15
standing committee is finalized, the party shall
continue to perform all of their obligations under this
agreement without prejudice to final adjustment with
decision of standing committee.
11. On behalf of Respondents nos.1 to 3 an affidavit
of Dilip Salunke, Superintendent Engineering, Mumbai
Construction Circle has been filed in reply to the civil application.
The affidavit states that the notification dated 26 May 2015 is
based on a well thought out policy decision taken in larger
public interest. The impugned notifications have been issued after
due consideration and prior approval of the competent authority.
By Government Resolution bearing No.PVT-2014/cr-27/RD-9
dated 5.12.2014, a committee was formed consisting of ten
members to consider closure of toll plazas. The committee
thereafter submitted a report and after considering the same the
state took a policy decision to close down 11 Toll Plazas under
the jurisdiction of Public Works Department (PWD) and one Toll
Plaza under the jurisdiction of Maharashtra State Road
Development Corporation (MSRDC) from 1 June 2015. It was also
decided to exempt light motor vehicles from payment of toll on
27 Toll Plazas in 19 projects under the jurisdiction of PWD and
28 wp5764.15
26 Toll Plazas in 12 projects under MSRDC. Thus in all
exemption is granted to 53 Toll Plazas in 31 projects across the
State from 1 June 2015 onwards. According to the deponent,
the exemption in the instant case has been granted to light motor
vehicles in exercise of the powers conferred under sub-sections (1-
E) of section 20 of the Maharashtra Motor Vehicles Tax Act, 1958.
12. Furthermore, the State Government also constituted a
committee under the Chairmanship of the Minister (Public Works
Undertaking) for study of the Integrated Road Development Plan,
Kolhapur and Mumbai Pune Expressway and Mumbai entry point
toll. It is submitted that on receipt of recommendations from the
aforesaid committee suitable action would be taken in respect of
those projects as well. According to the deponent, no loss would
be caused to the petitioners by way of the notification and care
has been taken that the State does not resile from the agreed
terms and conditions of the Concession Agreement. It stated that
cash flow projections have been prepared by the petitioners after
considering viability of the project and the projection as reflected
in the statement (Form 4) was accepted by the State and that the
petitioners are estopped from claiming any deviation of any
29 wp5764.15
nature.
13. The affidavit further states that the effect of exemption
granted to light motor vehicle would be made good by the
answering respondents to the petitioners/Concessionaire as per
the accepted cash flow and the shortfall in the cash flow
statement will be computed in a manner such that the accepted
IRR of 13.94% would be met by the petitioners over the
concession period. All monetary loss would be made good in
keeping with cash flow statement. It is submitted that no loss
would be caused to the petitioners.
14. The respondents have denied that the impugned
notification results in breach of Articles 14 and 19(1)(g) of the
Constitution of India. It is submitted that the petitioner's claim is
only for monetary loss. The State has denied that the petitioners
is suffering monetary loss of Rs. 45 lacs per day. It is stated that
the present dispute is a contractual dispute for which there is
efficacious and alternative remedy provided in the contract itself.
Reference is made to the provisions of the Amicable Resolution
provisions in the agreement. We may mention here that this
30 wp5764.15
amicable resolution provision was in substitution of the provision
for arbitration and as such substitution is consensual and the
petitioners has agreed to the same.
15. According to the respondents the petitioners have
changed their case from what was pleaded in Writ Petition
(Lodging) No.1595 of 2015 and even the case in the Civil
Application is different than in the writ petition. It is further
state that the respondents have never declined to fulfill their
obligation under the Concession Agreement. The respondents
have denied the fact that the petitioners has invested Rs.1843
crores in the project as stated in paragraph 13 of the affidavit in
support and it is contended that the State has only recognised
capital cost of Rs.1220 crores as set out in the cash flow
statement. We may mention here that it is petitioners' stated case
that it has borrowed Rs.1299.7 crores. The State presently is only
willing to recognise the figure mentioned in the cash flow
statement. The State's affidavit denies that exemption to light
motor vehicles from payment of toll has resulted in 95% of traffic
being exempted.
31 wp5764.15
16. In paragraph 22 of the affidavit while dealing with
paragraph 18 of the affidavit in support of the Civil Application,
it is stated that the respondents have sought from the petitioners a
calculation of average loss being caused but these details have
not been provided. Unless these details are provided the same
cannot be gone into. It is stated that the impugned notification
is the result of a policy decision and it is not that the petitioner's
project has been singled out. On this basis the civil application
has been opposed.
17. In the affidavit in rejoinder of the petitioners dated 26
June 2015, the deponent has contended that decisions of the
committee constituted do not disclose the basis on which the
decision was arrived at. He submits that there is no rationale or
public policy involved in the impugned notification and differentia
is not intelligible i.e. the distinction between the same class is not
justified/reasoned and therefore, the same is in violation of Article
14 of the Constitution. According to deponent public policy of
respondent no.1 should be applied uniformly in the State and
to pick and chose some toll booths and the so called
comprehensive policy is applied only to selective toll plazas and
32 wp5764.15
is therefore arbitrary. He reiterates that there is tremendous
financial loss suffered by the petitioners. He further submits that
the remedy of the petitioners is not barred in cases where the
fundamental right is to be enforced. There is failure in observing
the principles of natural justice. He submits that while issuing the
notification all these principles have been violated.
18. Dr. Milind Sathe, learned Senior Advocate appearing
for the petitioners submitted that before issuing the impugned
notifications the state should have issued a draft informing the
affected party so that the petitioners would have had an
opportunity to make representations. In the present case this right
has been violated and no such draft of the notification was shared
with the petitioners. As a result, principles of natural justice have
not been followed by the respondents. Dr. Sathe, then, submitted
that the present petitions are maintainable also on the count of
principles of legitimate expectation based on the state's
representation that it would be able to collect toll under the
agreement for a period of 17 years and 5 months. By issuing the
notifications the respondent no.1 has breached the agreement and
made it impossible for the petitioners to exercise their rights.
33 wp5764.15
19. Dr. Sathe further submitted that under the Concession
Agreement being a public private partnership the bargaining
power of charges has to be taken into consideration. The
petitioners, he submitted had a vested right to collect toll,
reimburse itself and earn reasonable profits as a consequence of
the assignment of the project rights. The respondents have
therefore after taking advantage of the petitioners obligation to
complete the project, issued the impugned notification taking
away the petitioner's right to recover monies spent and reasonable
returns as specified in agreement. Having borrowed about
Rs.1300 crores from a consortium of banks to finish the project,
the decision to stop collection of toll from the exempted category
of vehicles effectively means that the petitioners would be unable
to repay the loans obtained from the bank and would be unable to
recover the Capital Outlay. Dr. Sathe then referred to the
definition expression 'Capital Outlay' under section 20(1A)(ii). For
ease expression 'capital outlay' is reproduced below:-
"Explanation :- For the purposes of this section, the
expression "Capital Outlay" shall include the
34 wp5764.15
anticipated cost of certain essential on goings or
imminent works like improvements, strengthening,
widening, structural repairs, maintenance,
management, operation, reasonable returns and
interest on such outlay at such rates as the State
Government may fix until the full amount of such
outlay is recovered."
20. Learned senior counsel submitted that until the entire
capital outlay has been recovered, the petitioners would be
entitled to collect toll under the agreement for a period of at least
17 years and 5 months. The learned Senior Counsel further
submitted that by issuing the impugned notifications the
respondents had violated right of the petitioners to recover the
entire capital outlay.
21. The other ground on which the petitioners have
assailed the notification is that the respondents had acted in an
arbitrary and discriminatory manner by excluding some toll
projects from the ambit of the notifications. Dr. Sathe pointed out
that in the State of Maharashtra respondent no.2 i.e. Public Works
Department operates 38 toll booths whereas the MSRDC operates
53 toll booths. Out of these 11 booths operated by Public Works
35 wp5764.15
Department and one operated by MSRDC have been completely
shut down. 37 toll booths operated by Public Works Department
and 26 which were operated by MSRDC have been partially shut
and by the impugned notifications pertaining to the petitioners
project and the 27 booths operated by the Public Works
Department have been partially shut. It is the grievance of the
petitioners that the other toll booths at Kolhapur, Mumbai Entry
Points, Mumbai Express Way have been left untouched by the
respondent. This conduct of the respondents is, therefore,
arbitrary since public interest cannot be restricted to few toll
booths. There is no justification in partially or fully closing some
toll booths leaving the others to operate the booths and collect toll.
22. By way of illustration, Dr. Sathe pointed out that entry
point at Mumbai Vashi the charge of Rs.35/- levy for every car on
each trip a return journey is not even considering. Thus, the
person going to Vashi and return same day would be at Rs.70/-
whereas the petitioners charge Rs.30/- for the entire long distance
upto Panvel in Raigad District and Rs.45/- for a return journey,
apart from exempting cars from local village areas specified in
impugned notification. According to the petitioners, exempting
36 wp5764.15
only one toll booth would not serve any purpose. The petitioners
therefore allude to favoritism shown to some other private parties.
Dr. Sathe, then, submitted that the impugned notifications affect
the viability and feasibility of the Build, Operate and Transfer
scheme. The petitioners have borrowed money from a consortium
of banks which loans also constitute public money which is at
stake by virtue of the impugned notifications. The petitioners have
incurred costs to construct the road after acquiring permissions has
constructed the road and is willing to comply with its duties and
responsibilities under the agreement provided it is entitled to
recover its capital outlay. According to Dr. Sathe, the state had
assigned a sovereign function of collecting toll which was akin to a
tax. Thus having assigned such sovereign function the state cannot
dilute the assignment. According to learned senior counsel in the
alternative, the petitioners have a vested right to collect toll as an
agent of the state, therefore, the petitioners having acted on the
basis of the representations and assurances contained in the
Concession Agreement the State must be held to their part of the
bargain and a situation should not arise whereby after the work of
construction had done the respondent fails to abide by the
representation and assurances under the concession agreement.
37 wp5764.15
23. Dr Sathe submitted that the entire substratum of the
concession agreement gets diluted if the impugned notifications
were allowed to remain, seriously prejudicing the petitioners. The
State, he submitted must be compelled to perform their part of the
obligations. Dr. Sathe further submits that apart from the fact that
the impugned notifications are violative of the rights of the
petitioners under Article 14, 19(1)(g) of the Constitution, the
impugned notifications by exempting the specified vehicles destroy
the essence of the concession agreement and are against the public
policy which is to uphold sanctity of contract. Dr. Sathe submitted
that effect would be to defeat the basic principles to arrive at
public partnership and undermines the project as a whole.
24. According to the petitioners,by virtue of the impugned
notifications over 95% of road users will be allowed to use the
projects section free of cost. It will obviously cause substantial loss
to the petitioners and the said notifications have issued unilaterally
without any undertaking feasibility analysis/commercial viability
of the project. Mr. Sathe further submitted that there is over
whelming public interest in supporting public private partnership
38 wp5764.15
projects. The Concession Agreement is a public welfare project
strengthen road infrastructure. There is a public interest in
preserving the project. Stopping collection of toll will destroy the
substratum of the agreement and affect public interest as it will
discourage investments in group projects.
25. According to Dr. Sathe, the respondents have
constitutional duty to act in public interest. He further submitted
in the case in hand, the original and only gateway between
Bombay and Southern India was a six lane road. This has been
increased to 10 lanes under the public private partnership model.
The public at large will benefit from the enhanced infrastructure
while private parties such as the petitioners recoup the
investments and reasonable return thereon. The impugned
notifications are violative of this basic expectation under the
agreement. Dr. Sathe, learned Senior Counsel for the petitioners
also submitted that if the petitioners are not protected, the result
of the impugned notifications is that the term loans taken by the
petitioners will be jeopardy as there will not be able to repay the
monies.
39 wp5764.15
26. Dr. Sathe further submitted that the actions of the
respondents are arbitrary, unreasonable and capricious. He relied
upon the decision of the Hon'ble Supreme Court in Srilekha
Vidyarthi V/s. State of U.P.1 in support of the contention that the
petitioner's rights are arising out of the concession agreement
which are separate special rights which cannot be dealt with under
the alternate rules and regulations. Dr. Sathe also relied upon the
decision of Hon'ble Supreme Court in the case of Jitendra Kumar
V/s. State of Haryana2 in which the Hon'ble Supreme Court held
that legitimate expectation is not the same as an anticipation.
However, it is distinct from a desire and hope. A legitimate
expectation is based on a right and grounded in the rule of law as
requiring regulatory, predictability and certainty in the
Government's dealings with the public. The Hon'ble Supreme
Court held that the legitimate expectation operates both in
procedural and substantive matters.
27. The learned Senior Counsel also relied upon the
observations of the Hon'ble Supreme Court in Madan Mohan
Pathak3 in which the Hon'ble Supreme Court observed that the
1 AIR 1991 SC 537
2 (2008) 2 SC 161
3 (1978) 2 SCC 50
40 wp5764.15
representations made by, the conduct of the Government and
equities arising therefrom may be taken into consideration for
judging whether a particular piece of legislation, initiated by the
Government and enacted by Parliament is reasonable.
28. Dr. Sathe then submitted that the acts of the State are
not immune from challenge on the ground that they are covered
under the policy domain. He submitted that by citing policy these
acts cannot be excluded from judicial review. According to Dr.
Sathe, if the policy decision is ultra vires the statute or the
constitution or it violates any of the fundamental rights guaranteed
under Part III of the Constitution and it seeks to take away a vested
right of a person, such policy decision is clearly arbitrary,
unreasonable and violative of petitioner's rights under Articles 14,
19(1)(g) , 265 and 300A of the Constitution of India. Accordingly,
he submitted that such decisions are subject to judicial review and
it is necessary to apply wednesbury principles of reasonableness.
He relied upon the decision of the Tata Cellular V/s. Union of
India4. Lastly, he submitted that in writ jurisdiction under Article
226 this Court has power to mould the relief to do justice. He
4 (1994) 6 SCC 651
41 wp5764.15
relied upon the observation of the Hon'ble Supreme Court in Shri
Anadi Mukta Trust V/s. V. R. Rudan5 in which the Hon'ble
Supreme Court held that a public duty does not necessarily have to
be imposed by statute. It may be sufficient for the duty to be
imposed even by contract and judicial control over the fast
expanding maze of bodies affecting the rights of the people should
not be put in watertight compartment. It should remain flexible
and technicalities should not come in the way of granting relief.
29. Mr. Naik, learned senior counsel on behalf of the
respondent submitted that notification dated 26.5.2015 was
issued pursuant to section 20 sub-sections (1-A) to (1-E)
particularly under sub-section (1-E) of the Maharashtra Motor
Vehicles Tax Act, 1958. He submitted that on 30.5.2015, the
Court has already rejected the prayer for interim relief and
Hon'ble Supreme Court had granted liberty to apply for
modification without being influenced by the observations. He
submitted that there has been no change in the circumstances. He
submitted that the impugned notification was issued on the basis
of a well thought out public policy based on recommendations of a
5 (1989) 2 SCC 691
42 wp5764.15
Committee and the Government took a decision to close some Toll
Plazas and exempt light motor vehicles from payment of toll in
other cases. He submitted that grant of the interim relief would
have a cascading effect over 52 projects proponents of which are
not before the Court. In the circumstances he prayed that the
Court may not interfere in the policy matters.
30. Mr. Naik then submitted that the contention of the
petitioners that the concession agreement is a statutory contract
is not true. According to him this is a purely commercial contract
between the State and Private Entity such of whom had entered
into negotiations and arrived at contract for collection of toll.
The toll notification was issued under section 20(1A) and 20(1B)
of the Motor Vehicles Tax Act, 1958 and that merely because toll
notification is issued under the Act it does not mean that the
contract is a statutory contract.
31. Mr. Naik submitted that amendment to the Motor
Vehicles Act in 2001 recognised the fact that private participation
is permissible in such projects. He denied the contention that
sovereign functions of the State have been delegated to a private
43 wp5764.15
entrepreneur. He further denied the contention that toll is being
collected as a tax. He submitted that a sovereign function
would be in the nature of those relating to defence of the
country, foreign affairs, power to acquire territory etc. which are
not amenable to the jurisdiction of the ordinary civil Court. The
other functions such as the present one form part of the welfare
activity of the State could not be construed as exercise of
sovereign functions. He submitted that the State's activities are
multifarious and every such activity could not be construed as a
sovereign function capable of being assigned to an outside agency.
It is in this behalf the following judgments of the Supreme Court
are referred :
"2000 (8) SCC 61 (Agricultural Produce Market
Committee Vs. Ashok Harikuni and Anr.) and
2013 (8) SCC 345 (Balmer Lawrie and Co. Ltd. &
Ors. Vs. ParthaSarathi Sen Roy & Ors.)"
32. It is submitted that the Notification dated 26.5.2015 is
based on a well thought public policy decision, which is in the
larger interest of the public and has extremely wide impact. It is
44 wp5764.15
submitted that since there was a huge public outcry against the
collection of toll, the Government with an intention to being fair
constituted a Committee vide Government Resolution dated
5.12.2014 under the Chairmanship of Chief Engineer, Public Works
Region, Mumbai and included ten other members being Chief
Engineer, Pune/Nashik/ Amravati/Nagpur/ Aurangabad/
MSRDC / PPP Advisor and Section Engineer, Raigad considering
the report of the Committee, the Government took a policy
decision to :
(A) Close 11 toll plazas in 9 projects of PWD
(B) Close 1 toll plaza in 1 project of MSRDC
(C) Grant exemption to LMVs from payment of toll at 27 toll
plazas in 19 projects of PWD
(D) Grant exemption to Light Motor Vehicles from payment of
toll at 26 toll plazas in 12 projects of MSRDC.
LMVs have thus been granted exemption at a total of 53 toll plazas
in the state.
33. It is submitted that, any grant of any interim relief here
would have an cascading effect on 52 toll plazas none of whom are
before the Court. It is further submitted that, the decision of
45 wp5764.15
the Government is in the larger public interest and is in the realm
of the policy decisions and the Hon'ble Court should therefore
refrain from interfering in policy matters of the Government.
34. Mr. Naik submitted that the contention of the
petitioners that there has been violation of Articles 14, 19 (1) (g)
of the Constitution of India is without any basis. It is further
submitted that the State Government has also constituted a
Committee under the Chairmanship of the Minister, Public Works
Department for studying the integrated road development plan,
Kolhapur and also constituted a Committee under the
Chairmanship of the Additional Chief Secretary, Public Works
Department for studying the Mumbai-Pune Expressway and
Mumbai entry point toll and on receipt of the said reports, the
State Government will take appropriate action regarding the said
tolls.
35. According to the State, interim relief cannot be granted
for two reasons; firstly, there is no financial loss as is sought to be
projected by the petitioners and based on the accepted cash flow
which is part of the concessionaire agreement, the Government is
46 wp5764.15
committed to reimburse the Petitioners vis-a-vis a toll collection
projected of LMVs, thereby maintaining the Internal Rate of
Returns (IRR) and the concession period of 17 years 5 months.
Secondly, apart from the fact that grant of interim relief is in the
nature of final relief, there are innumerable practical difficulties if
such an order is granted. For example the petition being
dismissed, the petitioners cannot refund the amounts of toll
collected to the vehicle owners. On the other hand if the Petition
is allowed, then on the basis of damages to be ascertained, the
Petitioners can always recover the same from the Government.
36. Mr. Naik on behalf of the State submitted that in the
Concessionaire Agreement, Article 4 relates to levy, collection and
appropriation of Toll. Clause A (4.1) reads 'subject to the
provisions of this agreement, the Concessionaire shall be entitled to
levy, demand and collect toll.; Clause E categorically indicates that
the Concessionaire shall not collect tolls in relation to exempted
vehicles. The reference to Schedule F at page 125 at best is to a
proforma / standard Notification. This does not form part of the
Agreement. In fact, at Page 127, the nine types of Motor Vehicles
which are exempted can at best be indicative and not an
47 wp5764.15
exhaustive list because, the definition of 'exempted vehicles' at Page
34 specifically mentions 'vehicles as specified in the Toll Notification
as prescribed in the BMV Tax Act, 1958'. Section 20 (1E) contains
the power to grant such an exemption, which power has been
exercised in public interest.
37. The policy decision of the Government of Maharashtra
is having regard to public discontent and criticism regarding toll
collections at toll plazas. This was studied by constitution of an 11
member High Power Committee. Various recommendations were
made by the committee on the basis of which, the GOM has taken
the aforesaid decision. This therefore, is in the realm of the policy
decision of the government and any loss caused will be
compensated by the State.
38. Mr. Naik submitted that allegations have been made
by the petitioners that the State Government has acted in an
arbitrary and high handed manner by issuing notification dated
26 May 2015 but according to him the state government has acted
fairly and while granting exemptions to light motor vehicles from
payment of toll, the state government has taken care to ensure that
48 wp5764.15
no loss is caused to the petitioners and it is clarified that the state
will not resile from the agreed terms and conditions of the
Concession Agreement. It is submitted that the cash flow
statement which was submitted by the petitioners before entering
into the contract and on the basis of which the agreement was
entered into between the state and the present petitioners
permitting the petitioners to levy toll will be honoured. It is
further submitted that the amount due and payable to the
petitioners on account of the exemption being granted would be
made good by the state government on the basis of the accepted
cash flow at the accepted IRR of 13.94% and the concession period
of 17 years and 5 months including period of 3 years construction
period as agreed upon in the concession agreement. Therefore, no
loss is likely to be caused to the petitioners.
39. Mr. Naik submitted that entire grievance of the
petitioners is that the monetary loss would have been caused to
the petitioners. Learned Senior counsel submitted that agreement
entered into provided for an alternate mechanism to deal with
dispute and that the petitioners ought to have availed of alternate
remedy and no fundamental right of the petitioners has been
49 wp5764.15
violated. The entire dispute, he submitted, from day one being
related to monetary loss, the appropriate remedy was therefore
to invoke the dispute redressal mechanism contemplated under
Concession Agreement. An exhaustive procedure has been
prescribed and in this process all disputes will be decided and
adjudicated upon.
40. Mr. Naik also submitted that the petitioners' contention
that they have suffered huge additional project costs due to
inflation is not bonafide inasmuch as the respondents had delayed
the financial closure. Mr. Naik submitted that Government
accepted tender on 5.8.2010 and that it informed agency to
achieve financial closure before 15.9.2010 and accordingly the
last date for financial closure was 14.3.2011(180 days from
15.9.2010). However, financial closure was achieved by the
agency on 30.5.2011, therefore, it took eight and half months for
achieving financial closure as a result of which the petitioners
may have suffered inflation in the project cost. The petitioners
has thus projected higher loss and the government has disputed
the contention that the petitioners had suffered loss to such an
extent.
50 wp5764.15
41. In this manner, Mr. Naik submitted that no interim
relief should be granted. Mr. Naik reiterated that the State was
willing to pay over the respondents the sum of money which
would represent the loss caused by not collecting from exempted
vehicles contemplated in Form 4. Dr. Sathe submitted that Form
4 annexed to the agreement showed the estimated yearly toll
collection. Considering the traffic growth over a period of
contractual agreement it revealed that in the year 2015-16 total
of 55,974 cars were expected to pass through the toll gates
everyday. A total 6,733 light commercial vehicles were expected
to pass and those numbers would steadily increase to about
99,669 and 11,988 respectively in the year 2028-29 when the
concession period would end.
42. Mr. Naik submitted a table showing a summary of
projections of built operate transaction basis for which concession
were granted from 1 June 2015 and the number of toll collection
years remaining where total of 19 PWD projects and 12 MSRDC
project. Thus total of 31 number remaining toll acquire between
1 to 5 years, 6 to 10 years six projects, 11 to 15 years seven
51 wp5764.15
projects, 16 to 20 years three projects and 21 to 25 years eight
projects. He submitted that in all these cases the state
government would compensate the parties concerned on the
basis of projected income. According to Mr. Naik in the present
case since Form 4 estimated the number of cars passing through
toll booth in 2015-16 was 55974, the State would compensate
the petitioners by paying an amount equivalent to Rs.30/- per car
multiplied into number of cars. Dr. Sathe on the other hand
submitted that government has considered various issues arising
out of notification and arrived at formula for compensating the
concession which they are willing follow. Accordingly, Mr. Naik
submitted that they would compensate the petitioners by paying
approximately Rs.385.02 lakhs per month computed at the rate
of approximately Rs. 12.59 lakhs per day considering 25% deficit
due to the exemptions quoted. He relied upon the state's
proposal which offer Rs.12.59 lakhs per day in 2015-16 and
steadily rises to Rs.43.12 lakhs per day in 2027-28 subject to the
conditions provided in the proposed copy of which has been
provided to the petitioners as well.
43. Dealing with Dr. Sathe's argument that a sovereign
52 wp5764.15
function is being conducted by the petitioners, Mr. Naik in the
course of submissions referred to the observations of the Supreme
Court in Agricultural Produce Market Committee Vs. Ashok
Harikuni and Anr. (2000) 8 SCC 61. In paragraph 21 the
Supreme Court has observed that what is "sovereign" is defence
of the country, raising armed forces, making peace or war, foreign
affairs, power to acquire and retain territory all of which are not
amenable to the jurisdiction of the ordinary civil Courts. He
submitted that this ruling supported his contention that other
functions of the State including welfare activity of government
cannot be construed as a exercise of a sovereign function. He
submitted that in paragraph 32 of the said judgment the
Supreme Court observed that sovereign functions in the new sense
may have very wide ramifications but essentially sovereign
functions are primary inalienable functions which only the State
could exercise. He submitted that dichotomy between any
sovereign and non sovereign function could be ascertained by
finding which of the functions of the State could be undertaken
by any private person or body and the one which cannot be so
undertaken. According to him the judgment in the Agricultural
Produce Market Committee (supra) is to be read along with
53 wp5764.15
decision in the case of Balmer Lawrie & Company Ltd. and
Others Vs. Partha Sarathi Sen Roy & Others (2013) 8 SCC 345
in which the Court observed that often there is confusion as to
what would amount to sovereign function and what not. The
Supreme Court clarified that every Government function need not
be sovereign since the state's activities are multifarious. The
sovereign function are restricted to those which are primarily
inalienable. In our view the petitioners contention that
collection of toll was sovereign function which has been assigned
cannot be accepted. Collection of toll in our view is not an
inalienable function and the toll business demonstrates otherwise.
44. Mr. Naik then referred to the decision of the Supreme
Court in Sethi Auto Service Station and Anr. Vs. Delhi
Development Authority and Others6 in which the case of Punjab
Communications Ltd. Vs. Union of India7 was considered. He
submitted that doctrine of legitimate expectation although
accepted in a subjective sense as part or our legal jurisprudence,
it arises when an administrative body by reason of a representation
or by past practice or conduct gave rise to an expectation which it
6 (2009) 1 SCC 180
7 (1999) 4 SCC 727
54 wp5764.15
would fulfill unless some overriding public interest comes in the
way. The judgment holds that a person who claims on the basis
of this doctrine must be in the first instance, satisfied that he has
relied upon the said representation and that the denial of that
expectation has worked to his detriment. The Court could only
interfere with the decision taken by the authority if it was found
to be arbitrary, unreasonableness or in gross abuse of power or in
violation of principles of natural justice and if it is not taken in
the public interest. The Supreme Court has observed that it is
well settled that the concept of legitimate expectation has no
role to play where the State action is taken as a matter of public
policy or in the public interest unless the action taken amounts to
an abuse of power. The Court must not usurp the discretion of
the public authority which is empowered to take decisions in law
and the Court is expected to apply an objective standard. Even in
case where the decisions are taken entirely at the discretion of the
authority concerned but if the decision is taken fairly and
objectively, the Court will not interfere on the ground of
procedural fairness, to a person whose interest based on
legitimate expectation might be affected. Thus the grounds on
which relief can be granted on the basis of legitimate expectation
55 wp5764.15
is extremely limited.
45. In the course of submissions Mr.Naik had referred to
the decision of Villianur Iyarkkai Padukappu Maiyam Vs.
Union of India & Others8 in support of his contention that the
Court held that in the matter of policy decision and economic tests
the scope of judicial review is very limited and unless the decision
is shown to be contrary to any statutory provision or the
Constitution, the Court would not interfere with an economic
decision taken by the State. The Supreme Court held that in a
democracy it is prerogative of the elected Government to follow its
own policy and often change in a Government may result in the
shift in focus or change in economic policies. Any such change
may result adversely affecting some vested interest but unless
any illegality is committed in the execution of the policy or the
same is contrary to law or malafide, a decision bringing about
change cannot per se be interfered with by the Court.
46. The Supreme Court further held that it is not within
the domain of the Courts or the scope of judicial review to embark
8 (2009) 7 SCC 561
56 wp5764.15
upon an enquiry as to whether a particular public policy is wise
or whether better public policy can be evolved. Nor are the
courts inclined to strike down a policy at the behest of the
petitioners merely because it has been urged that a different
policy would have been fairer or wiser or more scientific or more
logical. Wisdom and advisability of economic policy are
ordinarily not amenable to judicial review and we do not find any
reason to stay the present decision resulting in impugned
notifications. The Court is not a forum for questioning correctness
of a policy. The Supreme Court further observed that a
presumption operates that Governmental action is reasonable and
in public interest. In the event of challenge it is for the petitioners
to show that such policy was wanting in reasonableness and is not
in public interest. Such burden of proof is to be discharged by
the petitioners to the satisfaction of the Court which in the instant
case the petitioners has not been able to do. The government may
be entitled to make decision and policy which may be necessary in
the peculiar circumstances. The Supreme Court observed this in
the case of privatisation of the Port in the State of Pondicherry.
However, the essence of the decision is that the policy matters are
not to be lightly interfered with especially when the petitioners are
57 wp5764.15
unable to show that it has been arbitrary and unreasonable.
47. In rejoinder, Dr. Sathe made reference to Form VI
being Cash Flow Projection statement which had pegged project
costs to Rs.1220 crores. He submitted that according to this
chart in the year 2015-16, the net toll income to be derived from
toll was estimated at Rs.162.82 crores. In this manner the income
would keep increasing till it peaks 525.74 crores in the year
2026-27 and stand reduced to Rs.226.70 crores in the year 2027-
28 thereby providing IRR of 13.94%. Dr. Sathe submitted that
the projections were made at the time of entering into the
Concession Agreement and they have thereafter undergone
revision and that actual cash flow has since been updated in form
VI which he then took us through.
48. According to updated form, the total costs has
escalated to 21.66 crores and for relevant period 2015-16 net
toll income stood at Rs.46.75 crores. It is according to this
updated statement Dr. Sathe pointed out that net toll income
would peak in 2027-28 at Rs.127.82 crores and thereafter
reduce to Rs.87.37 crores in 2028-29. According to him the
58 wp5764.15
effect of notification would mean that instead of making
reasonable profit, the petitioners are likely to face a deficit of
Rs.3988.01 crores. These are all figures of computation arrived
at on the basis of inputs based on current operations of the
project. Although the petitioners have relied on contents of Form
4, except for a revised and updated version of Form 6, they have
not relied upon any further financial analysis which reveal the
effect after the exemptions were granted. In our view the order
we intend to pass it is not necessary to deal with these factual
aspects of the matter.
49. Dr. Sathe submitted that the contentions of the State
that it has taken steps so that no loss would be caused to the
petitioners by compensating in good measure to enable the
petitioners to meet IRR of 13.94% has no merit. He submitted that
quite apart from the numbers mentioned in the projections, the
State should compensate the project for the actual number of
vehicles that would pass through the Toll Plaza.
50. Therefore according to Dr. Sathe, the difference
between the figures in the Form IV and the actual number of
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vehicle of each exempted cars passing through the Toll Plazas
should be mentioned and the State must make payments on the
differential as well in accordance with the agreed toll.
51. In view of the suggestions made by Mr. Naik, learned
Senior Counsel appearing for the State to pay the difference in
actual toll collections and the projected collections as per Form 4,
Dr. Sathe had contended that the only manner in which the
present dispute should be resolved in by the State agreeing to one
of the following:-
(i) (A) The State shall pay to the petitioners on monthly basis
difference between net collection of toll as projected in Form 6
(column 12) being part of the Concession Agreement and the
actual collection of toll amount at the toll plaza.
Or
(B) The State shall pay to the petitioners on ad-hoc basis an
amount equivalent to the number of vehicles of exempted category
being Car, Jeep such as Tata Sumo, Trax, Commander and any
other similar vehicles (having carriage capacity upto twelve
passengers excluding driver) and Six Seater Auto-Rickshaw (Tum-
Tum) (i.e. column 2(a) of the Schedule to the Notification dated
60 wp5764.15
30th June, 2015), the Buses of Maharashtra State Road Transport
Corporation (ST), all the vehicles coming from Taloja MIDC and
school buses (hereinafter collectively referred to as "exempted
vehicles"), (as mentioned in Form IV being part of the annexure to
the Agreement) multiplied by the toll rate of each category of
vehicles for that year and further pay/recover on monthly basis an
amount calculated on the basis of actual number of vehicles of
those categories passing through toll booth multiplied by the toll
rate of that category of vehicles for that year.
Or
(ii) To reissue the Notification under the Maharashtra Motor
Vehicles Taxation Act, 1958, exactly in format of Schedule F
appended to Concession Agreement authorising the petitioners to
levy and collect the toll on the vehicles as per such notification."
52. On behalf of the petitioners reliance was placed on
ABL International Ltd. and Anr. Vs. Export Credit Guarantee
Corporation of India Ltd. and Others 9 wherein the Supreme
Court observed that where a party discharges an act of the
Government and acts as an agent of the Government and
discharges functions in the national interest and that in such
9 (2004) 3 SCC 553
61 wp5764.15
situation it would be futile to contend that action such as the
notification which are impugned in the writ petition did not have
touch of public function or discharge public duty. The Court had
laid down legal principles as to maintainability of the writ
petition and in appropriate case writ petition is against the State
or an instrumentality of the State arising out of contractual
obligation is maintainable. Merely because some disputed
questions of facts arise for consideration the same cannot be the
ground to refuse to entertain a writ petition. In some cases as a
matter of rule, writ petitions involving monetary claim is also
maintainable. In that case the Hon'ble Supreme Court was
hearing a challenge to the judgment of the Appellate Bench of
Calcutta High Court. The learned Single Judge of the Calcutta
High Court after hearing parties concluded that although dispute
arose out of contract, the first respondent being State within
meaning of Article 12, was bound by the term of contract and
therefore for non performance a writ action was maintainable. In
appeal filed by the first respondent before the Division Bench the
findings were reversed. It was held that the appellants claim
involved disputed questions of fact which could not be
adjudicated under Article 226. As a result the Supreme Court
62 wp5764.15
observed that divergent views of two Courts have resulted in a
question of consideration as to whether the writ petition under
Article 226 is maintainable to interfere with contractual
obligations of the State or instrumentality by the appealing party.
53. The Court observed that the issue is not res integra
and in large number of decisions which referred to the Court
inter alia observed that once the State or instrumentality of the
State is a party to the contract it is under an obligation to act in
law fairly, justly and reasonably as required under Article 14 of
the Constitution of India. According to Dr. Sathe these
observations of the Supreme Court which were reflected in the
facts of that case where the company in question was acting as an
agent of the Government giving guarantee and had responsibility
to discharge such function in the national interest were clearly
applicable in the instance case as well. Further reference was
made to the decision in Joshi Technology International Inc. Vs.
Union of India 2015 SCC Online SC 490.
54. Dr. Sathe relied upon paragraphs 55 and 57 of the
judgment and submitted that in the present writ petition a public
63 wp5764.15
law remedy is what the petition seeks to invoke, in
contradistinction to the private law remedy simplicitor under the
contract. In the said judgment reliance is placed on the
observation of Kumari Shri Lekha Vidyarthi Vs. State of U.P. and
others (1991) 1 SCC 212 and other judgments which dealt with
issue of nature. Dr. Sathe relied upon the observations of the
Court as to various legal positions that emerge from the
judgments which are summarised by the Supreme Court as
follows :
"(i) At the stage of entering into a contract, the
State acts purely in its executive capacity and is
bound by the obligations of fairness.
(ii) State in its executive capacity, even in the
contractual field, is under obligation to act fairly
and cannot practice some discriminations.
(iii) Even in cases where question is of choice or
consideration of competing claims before entering
into the field of contract, facts have to be
investigated and found before the question of a
violation of Article 14 could arise. If those facts are
disputed and require assessment of evidence the
correctness of which can only be tested satisfactorily
by taking detailed evidence, Involving examination
and cross- examination of witnesses, the case could
64 wp5764.15
not be conveniently or satisfactorily decided in
proceedings under Article 226 of the Constitution.
In such cases court can direct the aggrieved party to
resort to alternate remedy of civil suit etc.
(iv) Writ jurisdiction of High Court under Article
226 was not intended to facilitate avoidance of
obligation voluntarily incurred.
(v) Writ petition was not maintainable to avoid
contractual obligation. Occurrence of commercial
difficulty, inconvenience or hardship in performance
of the conditions agreed to in the contract can
provide no justification in not complying with the
terms of contract which the parties had accepted
with open eyes. It cannot ever be that a licensee can
work out the license if he finds it profitable to do so:
and he can challenge the conditions under which he
agreed to take the license, if he finds it commercially
inexpedient to conduct his business.
(vi) Ordinarily, where a breach of contract is
complained of, the party complaining of such breach
may sue for specific performance of the contract, if
contract is capable of being specifically performed.
Otherwise, the party may sue for damages.
(vii) Writ can be issued where there is executive
action unsupported by law or even in respect of a
corporation there is denial of equality before law or
65 wp5764.15
equal protection of law or if can be shown that
action of the public authorities was without giving
any hearing and violation of principles of natural
justice after holding that action could not have been
taken without observing principles of natural justice.
(viii) If the contract between private party and the
State/instrumentality and/or agency of State is
under the realm of a private law and there is no
element of public law, the normal course for the
aggrieved party, is to invoke the remedies provided
under ordinary civil law rather than approaching
the High Court under Article 226 of the
Constitutional of India and invoking its
extraordinary jurisdiction.
(ix) The distinction between public law and private
law element in the contract with State is getting
blurred. However, it has not been totally obliterated
and where the matter falls purely in private field of
contract. This Court has maintained the position
that writ petition is not maintainable. Dichotomy
between public law and private law, rights and
remedies would depend on the factual matrix of each
case and the distinction between public law remedies
and private law, field cannot be demarcated with
precision. In fact, each case has to be examined, on
its facts whether the contractual relations between
the parties bear insignia of public element. Once on
66 wp5764.15
the facts of a particular case it is found that nature
of the activity or controversy involves public law
element, then the matter can be examined by the
High Court in writ petitions under Article 226 of the
Constitution of India to see whether action of the
State and/or instrumentality or agency of the State
is fair, just and equitable or that relevant factors are
taken into consideration and irrelevant factors have
not gone into the decision making process or that
the decision is not arbitrary.
(x) Mere reasonable or legitimate expectation of a
citizen, in such a situation, may not by itself be a
distinct enforceable right, but failure to consider and
give due weight to it may render the decision
arbitrary, and this is how the requirements of due
consideration of a legitimate expectation forms part
of the principle of non-arbitrariness.
(xi) The scope of judicial review in respect of
disputes falling within the domain of contractual
obligations may be more limited and in doubtful
cases the parties may be relegated to adjudication of
their rights by resort to remedies provided for
adjudication of purely contractual disputes.
55. Dr. Sathe had placed reliance on points (v), (vii), (ix)
and (x) to submit that the writ petition is maintainable and
67 wp5764.15
appropriate writ can be issued since distinction between public
law and private law is not so clear in the present case. It is not
correct that the present matter falls in private law field of contract
and once it is observed that the nature of activity involves a public
law element the matter can be examined by the Court under
Article 226 to see whether the same is fair, just and equitable.
56. Mr.Janak Dwarkadas, learned senior counsel is
appearing for some of the petitioners in other petitions, wherein
the issues are not identical to the present petitioners. He
requested us to hear him on the aspect of policy issues since the
decision in these petitions may have a bearing on the petitioners
whom he represents. Accordingly, we have permitted
Mr.Dwarkadas to make submissions on the larger issue involved.
In the course of arguments, he submitted that the State has been
picking and choosing projects to selecting implement their policy.
He submitted that impugned notifications are not issued
generally to exempt all projects from payment of toll but are being
issued selectively as in the case of the petitioners and his clients
who are petitioners in writ petition Nos.7573/2015, 7574/2015
and 7575/2015. According to Mr. Dwarkadas, the State did not
68 wp5764.15
merely act on a recommendations of the Committee but had set up
the Committee with the task of determining which toll plaza
should be closed. Therefore an arbitrary decision was taken and
an attempt was made to cover it up by involving the Committee.
He submitted that in the case of these petitions, the facts may be
slightly different, inasmuch as unlike the petitioners herein, the
petitioners in other petitions are not "start ups" in the operation
of the Toll Plazas. ig They have been operating the projects for
a number of years and have some years to go before the
concession period comes to an end. He submitted that if the
respondents agreed to compensate the petitioners herein, his
clients also would be entitled to benefit of current policy being
implemented pursuant to the impugned notifications. According
to him "toll policy" is conveniently employed to affect certain
persons and not others. He submitted that while enforcing policy
due regard has to be given to uniformity in the Court rather than
selective. Citing an example, he stated that certain projects which
also involve the MSRDC are excluded from the policy decision.
57. Mr. Dwarkadas also assailed the present impugned
notification in the policy cited by the Government on the ground
69 wp5764.15
that, although Mr.Naik cited development and implementation of
measures for avoiding the public discontent in view of public
agitation under levy of toll at toll plazas, it is pertinent to mention
that insofar as toll plazas of MSRDC are concerned, the MSRDC
had communicated in 26 toll plazas in five projects it is not
feasible to provide exemption to cars, jeeps and MSRDC buses.
This admission in the report of the Government relied upon by Mr.
Naik itself shows that policy is not based in the public interest.
58. The learned Senior Counsel relied upon Bannari
Amman Sugars Ltd. Vs. Commercial Tax Officer & Others 10
(2005) 1 SCC 625 wherein the Hon'ble Supreme Court has dealt
with principle of promissory estoppel and observed that for taking
up policy decision the Government is now required to hear
persons of benefit which is sought to be withdrawn. However,
when such benefit is sought to be withdrawn the Court must
consider all aspects including result sought to be achieved and
public good at large keeping in mind fundamental principles of
equity.
10 (2005) 1 SCC 625
70 wp5764.15
59. It is further observed by the Supreme Court that in
cases where the doctrine of promissory estoppel is invoked a
clear, sound and positive foundation must be laid in the petition
itself by the party invoking the doctrine and bald expressions
without any supporting material will not be sufficient. The Courts
are bound to consider all aspects including public good at large.
Mr. Dwarkadas also relied upon decision of the Punjab
Communication Ltd. (supra) and submitted that change in policy
defeating the substantive legitimate expectation must satisfy the
the test of Wednesbury reasonableness.
60. After having perused the pleadings and documents
and having heard counsel, we find that the case of the petitioners
in a nutshell is that the respondents had acted in arbitrary and
unreasonable manner in having issued the impugned notification
without following due process of publishing draft notification and
having issued the notification the respondents sounded the death-
knell of the Concession Agreement. According to the petitioners
the effect of exemption granted by the notification will reduce the
toll collection by 95%. The petitioners have submitted that cost of
toll collection and of running toll plaza is about Rs.8 lacs per day
71 wp5764.15
and that after taking into account the exemptions it is well nigh
impossible to break even or even service the debt. This figure of
Rs.8 lakhs has been stated across the bar and is not to be found in
the pleadings and we therefore do not wish to interfere into this
area. The petitioners further contend that the impugned
notifications are hit by doctrine of legitimate expectation and
promissory estoppel and are, therefore, the actions of the State are
violative of Article 14, 19 (1) (g) and 300A of the Constitution of
India. The petitioners submits that as on date the petitioners are
unable to pay costs of maintaining the project let alone servicing
of debt which includes amount borrowed from commercial banks
at high rate of interest.
61. The proceedings thus far may be briefly adverted to;
The first Writ Petition No. 5764 of 2015 was filed on 05
December 2014 sought the following prayers:
a) That this Hon'ble Court be pleased to issue a writ of
mandamus or a writ in the nature of mandamus or any
other writ, direction or order under Article 226 of the
Constitution directing the Respondents -
(i) To forthwith take all necessary steps in discharge of
72 wp5764.15
their obligations as public duty as well as arising
under the Concession Agreement dated 19th January
2011 so as to enable the Petitioners to commence levy
and recovery of toll on Sion-Panvel Special State
Highway, which the petitioners have developed on
"Build, Operate and Transfer basis" under the
Concession Agreement dated 19th January 2011;
(ii) To take all necessary steps including issuing
Notification in terms of Schedule "F" appended to the
Concession Agreement dated 19th January 2011 in
terms of provisions of the Bombay Motor Vehicles Tax,
1958.
62. On 16 December 2014 the following Order came to be
passed :-
"1....
2. The learned counsel also invites out attention to the
provisional Completion Certifying that the work of
improvement to Sion Panvel Special State Highway
from B.A.R.C. Junction to Kalamboli Junction is
nearly completed by the petitioners and all parts of the
project can be legally, safely and reliably opened for
commercial operation. The certificate further states
that the toll can be levied from 30 September 2014.
3. The grievance of the petitioner is that in spite of the
aforesaid completion certificate, the State Government
73 wp5764.15
is not issuing the notification as required by clause 4.1
(b) of the Concession Agreement.
4. Notice to the Respondents, returnable on 23 December
2014."
63. Thereafter on 23rd December 2014, the Court directed
the State Government to issue the Notification required under
Clause 4.1 (b) of the Concession Agreement in the format given in
Schedule 'F' (page 140 of the paper-book) as expeditiously as
possible and, in any case, within 2 weeks from 23 December 2014.
64. On 3rd January 2015, the State Government issued a
Notification authorizing the Petitioners to levy toll w.e.f. 6th
January, 2015, except in respect of exempted category. This
Notification had three additional categories of exemptions in
addition to the exempted category from the format Notification in
Schedule 'F'. Those categories being the (1.) Buses of Maharashtra
State Road Transport Corporation; (2.) All vehicles coming from
Taloja MIDC Road and (3.) Cars owned by named villages.
65. On 26 May 2015, the State Government issued another
Notification purporting to grant exemption to light motor vehicles
74 wp5764.15
as defined under the Motor Vehicles Act, which were part of item
2(a) of the Notification dated 3rd January 2015, from payment of
toll with effect from 1st June 2015.
66. Upon issuance of the notification of 26 th May 2015, the
petitioners filed the present Writ Petition No. 5764 of 2015 seeking
quashing of the notification dated 26th May 2015. Ad-interim
reliefs were refused on 30th May 2015. This Order was challenged
in the Hon'ble Supreme Court on 3 rd June 2015,the Supreme
Court dismissed the SLP permitting the petitioners to apply for
modificationof the Order.The Civil Application was then taken
out.At the hearing of the Civil Application Mr. Anil Singh, learned
Acting Advocate General, informed the Court that the Notification
under the Maharashtra Motor Vehicles Tax Act, 1958 will be issued
by tomorrow for a further period of 6 months.
On 30 June 2015, a fresh Notification was issued
authorizing the petitioners to levy, collect and
appropriate toll on Sion-Panvel Special State Highway
for a period commencing from 1 st July 2015 and
ending on 31st December 2015. However, in this
Notification toll against category of light motor
vehicles, cars, jeep, etc. has been shown as nil and
75 wp5764.15
there are categories of Maharashtra State Road
Transport Corporation buses, school buses and vehicles
coming from Taloja MIDC Road added in the exempted
category which is in deviation of Schedule "F" of the
draft Notification appended to the Concession
Agreement.
The petitioners, on amending the writ petition after
the aforesaid Notification, have added the following
prayers to the writ petition:-
(a)(i) That this Hon'ble Court be pleased to issue a writ
of certiorari or a writ in the nature of certiorari
or any other writ, order or direction under Article
226 of the Constitution calling for the records and
papers pertaining to the impugned Notification
being Exhibit "H" hereto, and after going into the
legality, validity and propriety of the impugned
Notification, quash and set aside the impugned
Notification to the extent of the impugned
Notification exempting the collection of toll from
light motor vehicles as defined under the Motor
Vehicles Act, 1958 in column (a-ii) of the
Schedule, the Buses of the Maharashtra State
Road Transport Corporation, all vehicles coming
from Taloja MIDC and school buses;
(a)(ii) That this Hon'ble Court be pleased to direct the
Respondents to re-issue /amend/rectify the
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impugned Notification dated 30th June 2015 to
bring it in direct consonance with Schedule "F" of
the Concession Agreement dated 19th January
2011 as appended at Exhibit "B" hereto, and
thereby allow the petitioners to levy and collect
toll on that basis as agreed upon under the
Concession Agreement."
67. The petitioners have contended that the Agreement is a
civil law contract akin to law, a statutory contract and an extra
ordinary contract entered into pursuant to the provisions of
Motor Vehicles Act, 1958 and as such it cannot be equated with
any ordinary commercial contract.
68. An attempt has been made during submissions on
behalf of the petitioners to contend that the toll being collected is
in fact a tax that has been levied by the State which is being
collected on behalf of the State by the petitioners as an agent. It
is therefore the case of the petitioners that the contract which is
built operate and transfer contract amounts to assignment of
sovereign function of the State to its agent the - petitioner.
69. On the other hand the State has contended that the
77 wp5764.15
present contract is neither civil law nor statutory contract and
merely because the collection of toll is empowered by section 20
of the Motor Vehicles Act it does not take the character of a
statutory contract. The State has further contended that
Concession Agreement is a purely commercial contract which
does not partake character of a statutory contract. It is not a
contract to collect any tax and does not amount to assignment of
any sovereign function. The State has contended that the
Concession Agreement is merely a enabling contract for a welfare
activity of the State, namely, to maintain efficient road network.
The State has contended that the impugned notifications are
issued as a result of policy decision taken in larger public interest
and cannot be assailed in writ petition. As a matter of policy are
beyond scope of judicial review. On these grounds the State has
opposed the petitioners' claim.
70. We have given our anxious consideration to the rival
contentions of the parties and we find that the present case the
Concession Agreement is somewhat of more recent compared to
various other Concession Agreements operating in the State. We
are told that there are about 52 other toll projects operating in the
78 wp5764.15
State which may be affected by the impugned notification. Clearly,
therefore, it appears that the notifications are intended to effect
a change in the policy of the State to the tolling business and the
public private partnerships in the field of tolling.
71. In this behalf we have examined the history of toll
roads and public policy aspects of toll roads and had occasion to
consider a report made by World Bank * on the aspect of tolling.
This report takes into consideration various aspects of tolling
including modes of evidence used to develop toll booths. On
various aspects of tolling will have to be considered and some of
the key issues which are highlighted in this report are the reasons
involved in build operate and transfer model which include
political and financial risks. The political risks include action of
the Government, to generate earnings, terminating contracts,
imposing taxes of project which severely damages values for the
investors. This may also include not allowing private partner to
charge the port. The financial risk include project cash flow
being insufficient to adequate return of private debt and equity
investment. World wide it is noticed that the financial risk in toll
projects are mainly borne by private sector although in some cases
* Private Financing of Toll Roads by Gregory Fishbein and Suman Babbar
79 wp5764.15
the Government may provide a financial guarantees which
include cash grant which improves the rate of return. It is
common in various privately owned toll road projects that
projected resources may diminish toll collections below the
threshold amount. The current scenario resulting from the
impugned notifications is not unknown to the privately financed
tolling business. .
72.
After reviewing the history of toll roads, the World
Bank study (the Report) examined the public policy and modes of
financing used to develop private toll road concessions and to
mobilize capital for their construction and operation. The study
also discusses the main public policy issues in toll road
development. The findings suggest that while private toll road
development is likely to experience modest growth in the near
future, public resistance to tolling, the time and cost of
implementing concessions, and other factors will probably limit
industry activity.
73. The Report records that interest in private toll roads is
particularly strong because governments require alternative
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methods of financing their extraordinary transport needs. Tolling
has also become an attractive option for managing traffic demand
on increasingly congested highways. Challenges to developing and
financing toll roads are similar to those faced by other capital
intensive infrastructure projects and face risks such as construction
risk, political risk, currency risk, and force majeure risk. But toll
roads face greater risks in certain important areas, including the
unpredictability of future traffic and revenue levels. Governments
are facing dramatic growth in highway needs, both for new
facilities and for maintenance and rehabilitation of existing
facilities. In most industrialised countries 90 percent or more of
highway kilometers are publicly funded; in developing countries
governments often bear the entire cost. However, the limited
resources available through traditional government funding
sources has led to increasing interest in private toll roads as an
alternative way of meeting highway needs.
74. The Report records that private tolling is believed to be
being pursued in a wide variety of countries, including Argentina,
Chile, China, Colombia, Ecuador, HongKong, Hungary, India,
Indonesia, Malaysia, Mexico, the Philippines, and Thailand. Project
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economics refers to the cost of developing, constructing, and
operating a project, relative to the revenue it generates. This is
typically measured in terms of net present value or internal rate of
return on investment (such as the IRR in the instant case). The
project economics of a toll road are determined by a number of
factors. There is no standard project in the private toll road
industry; rather, toll facilities exhibit widely varying characteristics
and project economics. The predictability of expected traffic on a
toll road can be assessed on the basis of existing traffic levels on
the corridor (if any) and on the competitive alternatives available.
In the present case we are told there are no alternative roads.
75. The build-operate-transfer (BOT) model is the most
common approach used to assign responsibilities in toll road
projects and similar arrangements are used to develop new
facilities or improve existing ones. Under the BOT model a private
consortium receives a concession to finance, build, control, and
operate a facility for a limited time, after which responsibility for
the facility is transferred to the government, usually free of charge.
The private party typically assumes primary responsibility for
constructing the project, arranging financing, performing
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maintenance, and collecting tolls, while the public sector retains
legal ownership. In most projects the private sector was primarily
responsible for construction and toll collection, while the public
sector retained legal ownership of the facility. Traffic and revenue
risks are perhaps the greatest risks faced by toll road projects.
These are defined as risks associated with insufficient traffic levels
and toll rates too low to generate expected revenues. The
treatment of traffic and revenue risk ranges from full private sector
assumption of the risk to government-provided minimum traffic
and revenue guarantees. As far as minimum traffic or revenue
guarantees are concerned the World Bank study revealed that the
government implicitly covers this risk. Applying this feature to the
present case, we find the State appears to be inclined to move in
this direction as a matter of policy.
76. The Report found that political risk arising out
government actions that could impair a facility's ability to generate
earnings. Such actions could include terminating the concession or
imposing taxes or regulations on the project that severely damage
its value to investors; not allowing the private partner to charge
and collect tolls as specified under the concession agreement.
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According to the Report, governments generally agree to
compensate investors for termination of the concession and
violations of the concession agreement, including agreed toll rates.
However, private concessionaires generally assume the risk
associated with dispute resolution and the ability to obtain
compensation in the event of a government violation of the
concession agreement. Government assumption of political risks
has value to investors only to the extent that there is a fair and
timely process for compensating the concessionaire for contract
violations.
77. Financial risk is defined as the risk that may cause
project cash flows may be insufficient to pay an adequate return
on the private debt and equity invested in the project. The private
sector is generally responsible for financial risk, although in some
cases governments may provide debt guarantees, equity
guarantees, and other types of financial guarantees. Governments
also may provide cash grants, equity, or subordinated loans, which
improve the expected rate of return on private capital invested.
78. Apropos the legal framework for a concession policy
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the Report records as follows:-
"A successful concession program requires a
supportive policy and legal framework. A private
toll road program should be integrated with
national, regional, and local transportation
policies and programs and should be enabled by a
concession law. Transportation policy objectives
typically include providing efficient mobility at
lowest cost and with the least environmental
impact, and facilitating economic development."
"Once a decision has been made to pursue a
private toll road program, a concession law that
specifically addresses toll roads is critical for
providing clear legal authority and establishing
government support and accountability for the
program. In the facts of this case the State only
relies upon the amended provisions of the Motor
Vehicles Act. If traffic is lower than expected, rates
cannot be adjusted upward to their optimal profit-
maximizing level. If traffic is higher than expected,
the government cannot limit the concessionaire's
returns by lowering toll rates. In addition, toll rate
regulation limits the flexibility of the
concessionaire to manage traffic through variable-
rate, market-based tolls."
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79. The fact remains that in India there are no concession
laws as contemplated in the world bank report. If there were to be
comprehensive legislation on national transportation, provisions
regarding tolling could have been part of it including suitable
provisions relating to concessions. Absent of such law, one has
fall back upon the existing legislation.
80. The Supreme Court has time and again reiterated that
in democracy it is the prerogative of the elected governments to
follow its own policy and often change in a Government may
result in the shift in focus or change in economic policies which
may adversely effect some parties. This has been reiterated time
and again.
81. The World Bank study has also observed that a
minimum traffic or revenue guarantee, in which the government
compensates the concessionaire in cash if traffic or revenue falls
below a specified minimum level, is a relatively common form of
government support. Typically, the minimum traffic or revenue
threshold is set below (for example, 10-30 percent) the expected
level in order to reduce government exposure while providing
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sufficient coverage to support the debt component of the capital
structure. Under such a structure the government can support
private financing for a road that it would otherwise have to fund
on its own, while limiting its financial exposure to the possibility
that revenue may fall below the guaranteed minimum.
82. Minimum traffic or revenue guarantees, however, are
the best means of addressing revenue risk for feasible projects
because they provide a defined floor on revenues that is generally
set at a level sufficient to cover senior debt service payments. The
World Bank report further observes a follows:-
"Where governments are implementing sound road
policies but do not have adequate credit for their
support mechanisms to be effective, multilateral
financial institutions can provide risk guarantees
and credit enhancements to support the
commitments of host governments during a
transition period, until the government sponsor
has developed adequate credit to support projects
on its own. Such mechanisms have been used
successfully in the power sector."
" One of the greatest impediments to toll roads is
the public's resistance to paying tolls, especially on
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existing roads that the public often perceives as
already paid for through tax revenues. Public
resistance to tolling has impeded or halted private
toll road programs in environments ranging from
Washington state (in the United States) to
Argentina. Advances in electronic tolling should
reduce public resistance associated with the
inconvenience of having to stop to pay tolls.
However, the concept of road pricing is still not
widely accepted. Of particular concern to some
opponents of tolling is the alleged inequity of
charging the public, especially low-income
passengers, to use a vital public facility. The time
and cost required to establish the complex legal
and policy framework required for a concession,
implement the program, and close financing is a
second important inhibiting factor. As discussed in
the section on financing structures and sources,
private toll road concessions involve highly
complex legal and financial arrangements and are
often difficult and timeconsuming to finance. In
many cases these costs may outweigh the benefits
of private tolling, although increased experience
and sophistication among public and private
partners may reduce these costs in the future. The
difficulty of developing private toll roads is often
compounded by government's failure to integrate
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concessions with a broader regional or national
transportation policy."
83. The Report also records that minimum revenue
guarantees will require reporting revenues on a regular basis.
Under rate of return regulation extensive reporting is required to
monitor capital costs, operating costs, revenues, and rate of return.
In addition, a procedure is required for the government to monitor
and verify the data reported by the concessionaire, including
arrangements for auditing and challenging the concessionaire's
reports, if necessary.
84. Thus, it is seen that world over wherever minimum
traffic count is not adequate revenues fall below specified
minimum level and it is relatively common that the Government
provides support. In the instant case the State has conceded that
the impugned notification would certainly reduce the revenue of
the petitioners. The State has, therefore, to compensate the
petitioners which amount to enable the petitioners to achieve its
IRR of 13.94%. The concept of IRR is also a world wide feature in
tolling projects as we have seen from the World Bank Report.
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85. We are of the view that the decision taken by the State
would fall within domain of policy decision since it is not restricted
to the petitioner's project alone but to host of other tolling projects
across the State. No doubt as submitted by Mr.Dwarkadas,
learned senior counsel appearing on behalf of the petitioners in
other petitions had submitted that some tolling projects have been
left untouched by the State but that alone, in our view, does not
establish that policy of the State is being implemented in
arbitrary or discriminatory manner. It is not for the courts to
monitor the manner in which policy is to be implemented. The
fact that some projects have not been included in the present
ground of exemption does not mean that they are excluded in
totality. The policy may be implemented in due course in
phased manner. We also find that it is commonplace in the tolling
business, as found by the World Bank study, that one of the
greatest impediments in tolling business is public resistance to
pay tolls specially on existing roads where public even perceives.
It has a right by virtue of having contributed to tax revenues. The
instant tolling project is uniquely placed inasmuch as the road in
question has always been in existence and as described by the
petitioners is the gateway to southern India. The extent of road
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has now been enhanced to meet high density of traffic flowing
through this road. This road would largely provide passage to
light and heavy motor vehicles. The public have also being paying
substantial amounts of tax upon registration of vehicles described
as a one time tax. It is not as if the vehicles on the road are
expected to pay toll for use of the existing road merely because
its capacity and quality have been enhanced. World wide
recognition of this feature of public resistance to tolling is
therefore exemplified by the present case. The resistance of public
is to be measured not by any stray incidents of violence that may
have been inferred by the petitioners and which have been
referred to in submissions made before us by Mr.Dwarkadas. The
learned senior counsel for the other petitioners alluded to the fact
that the State has succumbed to political pressure and have issued
notification only owning to political pressure and stray incident of
violence at toll booths.
86. Mr. Naik had countered this suggestion by stating that
contribution to be made by the State by way of compensation are
provided for are budgeted. The State would be compensating the
petitioners in the instant case on the basis of cash flow projections.
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87. We are satisfied that the State has recognised the fact
that the petitioners would undoubtedly suffer some loss if all light
motor vehicles are exempted from payment of toll. During various
hearing before us several attempts were made by the counsel to
arrive at a workable solution but there are some keys issues that
could not be resolved between the contesting parties. The State,
on one hand, submits that it will compensate the petitioners to
the extent of difference between projected collections Form
4/Form 6 and the actual toll collected.
88. On the other hand on behalf of the petitioners it was
contended that the figures in Form 4 and 6 are mere estimates
and the same are bound to change. It is stated that if the State is
serious about compensating the petitioners they would have to
pay the difference between toll that would have been collected had
the impugned notification not been issued and the toll that is
collected pursuant to the impugned notification, namely, actual
toll that would have been collected from the exempted category
of vehicles, namely, light commercial vehicles, buses of MSRTC,
school buses and those of neighbouring villages and the vehicles
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from MIDC Taloja would have to be paid over as and by way of
compensation to the petitioners. It is suggested that this amount
could be computed by the State on the basis of figure of actual
vehicles passing through toll gate which would be provided by
the petitioners. However, the State was unwilling to accept those
figures and they want to verify the same. It was suggested that
the State makes provision of monitoring actual number of
exempted vehicles passing through toll gates. However, it was
found that the State was not in position to accede to demand. In
the circumstances these areas cannot be adjudicated in writ
jurisdiction under Article 226 of the Constitution of India.
89. We do not find favour with the petitioner's argument
of being impugned notification being violative of rights under
Article 14, 19(1)(g) and 300A of the Constitution. The State was
fully empowered to issue exemption notification by virtue of
section (1-E) of section 20 of the Motor Vehicles Act, 1958 which
is what the State has done. The State is empowered as a matter of
policy to exempt vehicles or a classes of vehicles from levy of toll.
It is useful to consider the provisions of the Act in this behalf.
Section 20 (1-E) reads as follows :
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"20 (1-E) : The State Government may, by
notification in the Official Gazette, in the public
interest, exempt any vehicle or class of vehicles from
levy of toll under this section."
89. The sub-section clearly reveals that it contemplates the
State's power to issue notification in public interest to exempt
any vehicles or owners of vehicles from levy of toll under this
section. Sub-section (1-E) was added by Maharashtra Act 7 of
2000 that preceded insertion of Maharashtra Act 17 of 2001 by
which the following words were added :
"or by private enterpreneur or an agent appointed by
the State Government or the State Public Enterprise
authorised by the State Government in this behalf, by
entering into an agreement with such entrepreneur or
agent under the Build, Operate and Transfer (B.O.T.)
Projects,"
90. Therefore, the petitioners at all times was aware of
the fact that the State could issue notification except to any class
of vehicles. This power read with other provisions of the Act
empower the State to issue such notifications and we do not find
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it as violative of the petitioner's rights. The petitioners have other
contractual remedies open.
91. The Supreme Court in case of Shrijee Sales
Corporation Vs. Union of India11 (1997) 3 SCC 398 observed that
if there is supervening public equity, the Government would allow
to change its stand and will have power to withdraw from
representation made by it which induced persons to take certain
steps which may have gone adverse to interest of such persons
on account of such withdrawal. Moreover, the Government is
competent to rescind from the promise even if there is no
manifest public interest involved, provided that no one is put in
any adverse situation which cannot be rectified. In the present
case, we find that position that the petitioners found themselves
in is not irreversible and can be rectified given the fact that it is
on this basis Dr. Sathe submitted that the State cannot be allowed
to withdraw from its promise made in the contract.
92. We are also unable to agree with the petitioners that
the toll allowed to be collected by virtue of Motor Vehicles Act by
11 (1997) 3 SCC 398
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section 20 (1-E) of the Motor Vehicles Act amounts to a tax which
is being collected by the petitioners so also the petitioners has not
been able to site a single example of the State assigning the right
to collect the tax from citizens and appropriating such tax towards
reimbursement of costs incurred by the contractor such as the
petitioners. The argument that the toll is a tax is also not
sustainable by the reason of the fact that the toll collected is not
remitted to the treasury under any particular head of taxation.
The collection of toll is nothing but a fee for use of toll way. A tax
would allude to contribution of the State's revenue. In the instant
tax toll levied will not in our view qualify as tax under any of the
relevant statutes.
93. This brings us to other submission of the petitioners
that the activity of collection of toll is sovereign function. In our
view the toll cannot be construed as sovereign function in view of
the fact that sovereign functions are described as inalienable in
the words of the Supreme Court and in the instant case toll
collection cannot be considered as a sovereign function. A
sovereign function is one that intrinsically cannot be assigned and
as admitted by the petitioners themselves in submissions the
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provisions of good roads is part of the welfare activity of the State.
Thus viewed, it is not possible to hold that the collection of toll
once permitted cannot be taken away specially since the State
has voiced its willingness to compensate the petitioners for loss
caused.
94. It is pertinent not be out of place to mention that the
Concession Agreement contains Article 16 which deals with the
Events of Default and Termination. Dr. Sathe had drawn our
attention to these provisions. Article 16.1(a) deals with the event
of default committed by the concessionaire. He submitted that
under Article 16.1(a)(9) the petitioner is borrower and if a
default has occurred under any of the financing documents and
any of the lenders have recalled its financial assistance and if
amount demanded are not paid, it will constitute a default under
the Concession Agreement triggering the default clause. He,
therefore, submitted that in the light of restricted revenue
generation by virtue of impugned notification there is every
likelihood that the petitioner may be considered as a defaulter
under clause 16.1(a) for no fault of the petitioner and this is one
more reason why the operation of the impugned notifications
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must be stayed. In our view it is unlikely that the respondent will
hold the petitioner in default under the Concession Agreement, if
in fact its revenue generation has been genuinely affected. Since
the respondent themselves have conceded that the petitioner is
likely to suffer loss of revenue, this cannot be major
consideration for grant of any relief to the petitioner.
Furthermore, clause 16.1(b) deals with events of default by
Government of Maharashtra.
95. Clause 16.1(b) (1) provides that if the Government is
in breach of the agreement and has failed to cure the breach
within 90 days of the receipt of notice in that behalf from the
concessionaire
OR
If the Government has repudiated the agreement or
otherwise evidences its intention not to be bound by the
agreement
OR
if the Government or its agency has by an act of
commission or omission created circumstances that have a
Material Adverse Effect on the performance of its obligation by
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the concessionaire and has failed to cure the same within 60 days
of notice by the concessionaire, the petitioner will have right of
terminating the Concession Agreement by issuing a notice of
termination. Upon such termination, the petitioner shall be
entitled to receive by way of "termination payment" a sum equal
to the "total debt due" plus 120% of the Equity subscribed in cash
and actually spent on the project
96.
Furthermore, Article 17 provides that the petitioner
can apply for extension of the concession period on account of any
change in law.
97. Mr. Naik in the course of his submissions stated that
this is option that is contractually provided but the petitioner
have deliberately not opted for this course. We do not wish to
make any observation on this aspect since these are contractual
rights which can be exercised at the option of the petitioner.
This being a important provisions we cannot overlook it while
considering the petitioner's application in the writ petition.
Needless to mention that all the rights of the petitioner in this
respect also may be exercised without being influenced by the
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observations in this judgment.
98. The other contention is that the impugned notification
are liable to be struck down as being violative of the principles of
promissory estoppel and that they militate against the petitioner's
legitimate expectation also cannot be accepted for the reason that
the business of tolling itself involves a huge amount of uncertainty.
As we have observed from the petitioners own arguments that the
data provided in the Form 4 and 6 at the time of entering into
Concession Agreement may not hold good since toll collection
fluctuates. In a situation such as present one, the State having
agreed to reimburse the petitioners loss incurred based on the
projections we are not inclined to exercise our writ jurisdiction
under Article 226. That being so, it is not as if the petitioners can
be left in lurch. The State has unequivocally admitted that it will
reimburse the petitioners the loss in toll falling due as represented
in the projections contained in Form 4, as under:-
Extract from Form 4
Statement showing Estimated Yearly Toll collections
Vehicle category Avg.Daily
Traffic
1. Car, Jeep (upto 12 passengers excluding driver)
e.g. Tata Sumo, Trax, Commander, Six-seater
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auto-rickshaw (tum tum) 39780
2. Mini Buses or similar vehicles (passenger
capacity more than 12 upto 20 passengers
excluding driver) and goods carrying vehicles
not covered under 3 & 4 4785
3. Buses & Trucks 11544
4. 3 Axle vehicles excluding vehicles mentioned
at No.3 as per Motor vehicles Act 1988
e.g. trainer vehicle with more than two axle. 4433
5. Vehicle with more than 3 axle vehicles
excluding vehicles mentioned at No.3 as
per Motor Vehicles Act 1988 e.g. trainer
vehicle with more than two axle. 3036
Total 63578
YEARS TOLL RATES IN Rs. TOTAL INCOME/DAY
APR-MAR Car LCV Truck/ 3 AXLE Multi Car LCV Truck/ 3 Multi Axle
Bus Axle bus AXLE
2015-2016 30 55 110 180 240 55974 6733 16244 6238 4272
2028-2029 70 130 250 450 550 99659 11988 28921 11106 7606
99. On the other hand, the petitioners contend that the loss
can be compensated by either of the following two formulas:-
(i) The petitioners' loss should be compensated in terms of the
number of light motor vehicles which would admittedly pass
through the toll booth and which would have paid the toll as per
the Concession Agreement, but for the impugned exemption
multiplied by the scheduled toll rate;
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(ii) The petitioners' loss should be compensated in terms of the
projected receipts as per the total income/day column in Form 4
minus the actual receipts from the vehicles actually passing
through the toll booths.
100. The disputes between the parties would thus boil down
to the formula to be adopted for computing the petitioners' loss on
account of the impugned exemptions. While these disputes can be
considered by the above Committee, the petitioners' submission is
that the principles for computing the loss should be laid down by
this Court and, therefore, the petitioners may not be required to go
to the Committee. In the alternative, the disputes should be
referred to independent Arbitral Tribunal. The State Government
is, however, not ready to change the forum from the Committee to
an Arbitral Tribunal.
101. Mr. Naik, learned senior counsel appearing on behalf of
the State has tendered a letter dated 24.8.2015 addressed to the
Government Pleader in terms of which are reproduced below:-
"Sub: OOCJ Writ Petition (L) No. 1595 of 2015
Sion Panvel Toll Pvt. Ltd. .. Petitioner
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Vs.
State of Maharashtra & ors. .. Respondents
And other connected matters
(Name of work - Improvement of Sion Panvel
Special State Highway - Under BOT, from B.A.R.C.
Junction to Kalamboli Junction Ch.116/800)
Ref: W.P. No. 5764 & 6577 of 2015 along with
other W.P. No. 7573/15, 7574/15 & 7575/15
As per discussion with Shri Anil Y. Shakhare,
Senior Advocate, Shri Vineet B. Naik, Senior
Advocate and yourself, you can inform the Hon'ble
High Court, the Government's willingness to
constitute a high level committee consisting of:
1) Additional Chief Secretary (PWD)
2) Additional Chief Secretary (Finance)
3) Additional Chief Secretary (Planning)
The Committee will adjudicate the dispute/
difference between Govt. and Concessionaire
broadly on following issues:
a) All disputes/differences between the
Concessionaire and Govt. will be decided/
adjudicated (excluding the challenge to the
notification dated 26/05/2015)
b) The committee will take decision on the
disputes/differences within 3 months.
c) The decision of the Committee will be final
and binding on both the parties."
102. In the circumstances, it will be open for the petitioners
to approach the said Committee for redressal of their grievance
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without prejudice to their rights to challenge the decision of the
Committee in an appropriate legal forum and in the interregnum
the State will pay the amount as offered by the State Government
on the basis of projections in Form 4. If the disputes are not
resolved as aforesaid, it will always be open to the parties to adopt
suitable measures and we leave open all the questions pending
such adjudication.
103.
One more factor which we need to consider is
monitoring of traffic duly categorised including monitoring of the
vehicles that would pass through toll gates. In this respect, it is
always open to the petitioners to install suitable monitoring
equipment for presentation of evidence to the respondents.
Sophisticated traffic data loggers are available which are housed in
high security housings which log comprehensive individual
vehicles data and classification based on number of axles as well.
These can be installed by the petitioners to ensure that data
validation is not cumbersome especially since some of the systems
generate reports and transmit them automatically to pre
designated persons. The respondents officer(s) could be pre-
designated for this purpose. Once installed, the automated systems
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do not require large staff to monitor data. In view of aforesaid, we
find no reason to keep these petitions pending and the same are
disposed of in above terms. The various chamber summons and
civil applications taken out therein are also liable to be disposed of
in the above terms. Insofar as the PIL No. 239 of 2013 is
concerned, the issues therein are not directly relevant to the
controversy in the two writ petitions especially since a provisional
completion certificate had been issued. We have therefore disposed
of the PIL by a separate Order today.
104. Hence we pass the following order:-
The challenge to the State Government impugned
notification dated 26/5/2015 and 30/6/2015 is repelled, with the
following clarifications:
(i) The State Government has agreed to compensate
the petitioners for loss being caused to the
petitioners on account of the aforesaid impugned
notification. However, the disputes/ differences
between the petitioners and the State
Government regarding the principles for
determining such loss will be decided by a
Committee consisting of -
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Additional Chief Secretary (PWD)
Additional Chief Secretary (Finance)
Additional Chief Secretary (Planning)
(ii) The Committee will decide all disputes /
differences between the petitioners and the State
Government arising on account of challenge to
the notification dated 26/5/2015 and
30/6/2015, excluding the challenge to the
notification itself.
(iii) The Committee will take decision on the disputes
/ differences by 31/12/2015.
(iv) In case the petitioners are aggrieved by the
decision of the Committee, it will be open to the
petitioners to challenge such decision before an
appropriate forum.
(v) Till the Committee takes a decision as aforesaid,
the State Government shall pay the amount as
per the offer made by the State Government at
the hearing of the petitions, i.e. on the basis of
projections and amount of toll specified in the
schedule, that is to say for the period 2015-16
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Rs.385.02 lakhs per month and so on and so
forth as indicated in para 98 herein above and
based on data provided in Form 4.
(CHIEF JUSTICE)
(A.K.MENON, J.)
CERTIFICATE
Certified to be true and correct copy of the original
signed Judgment/order.
