Delhi High Court
Indraprastha Gas Limited vs Union Of India & Anr. on 12 February, 2020
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 16.01.2020
Date of Decision: 12.02.2020
+ W.P.(C) 82/2015 & CM No.131/2015
INDRAPRASTHA GAS LIMITED ..... Petitioner
Through Mr.K.K. Rai, Sr. Adv. with
Mr.S.K. Panday, Mr.Awanish
Kumar, Mr.Chandrashekhar
A.Chakalabbi, Mr.Anshul Rai,
Mr.Sreoshi Chatterjee, Mr.Ram
Krishna Veerendra and
Mr.D.P.S. Rajesh, Advs.
versus
UNION OF INDIA & ANR. ..... Respondents
Through Ms.Padma Priya and Mr.Dhruv
Nayar, Advs.
Mr.Mankh Mohan, Adv. for
UOI.
CORAM:
HON'BLE MR. JUSTICE NAVIN CHAWLA
1. This petition challenges the Guidelines/Norms dated 24.07.2013
for access permission to Fuel Stations, Private Properties, Rest Area
Complexes and such other facilities along National Highways, issued
by the respondent no.1, to the limited extent insofar as it prescribes
levy of a penalty of Rs.25 lacs on existing Fuel Stations constructed
without prior approval of the respondent no.1. The petition further
challenges the order dated 11.08.2014 passed by the Court of Highway
Administration levying the penalty of Rs.25 lacs on the petitioner.
WP(C) No.82/2015 Page 1
2. The ground of challenge to the Circular and the Impugned
Order is that Section 29 (4) of the Control of National Highways
(Land and Traffic) Act, 2002 (hereinafter referred to as the „Act‟) does
not provide for levy of any penalty on the person gaining access to a
Highway without permission of the Highway Administration. Relying
upon the judgment of the Supreme court in State of U.P. and Ors. v.
Saraya Industries Ltd, (2006) 11 SCC 129 and State of Bihar and
Ors. v. Industrial Corporation (P) Ltd. & Others, (2003) 11 SCC 465,
the learned senior counsel for the petitioner submits that where the Act
itself does not prescribe for levy of a penalty on the contravention of
any provision, such penalty cannot be prescribed by way of a mere
Circular.
3. On the other hand, the learned counsel for the respondents
submits that in the present case, apart from the petitioner gaining
access to the Highway without the permission of the Highway
Authority, it was also found to be in "unauthorized occupation" of
63.40 sq. mtrs of the highway land. She submits that therefore, the
penalty has been rightly levied on the petitioner in terms of Section
26(6) of the Act.
4. In the alternative, the learned counsel for the respondents
submits that Section 28(2) of the Act provides for grant of access to
the highways subject to the guidelines and instructions issued by the
Central Government from time to time. Section 29 (2) of the Act
further provides that such permission to access the highways shall be
granted with or without the terms and conditions as may be prescribed.
In view of these provisions, the Circular, insofar as it prescribes
WP(C) No.82/2015 Page 2
imposition of penalty for regularization of the earlier unauthorized
access as a condition for grant of licence, cannot be faulted. Placing
reliance on the judgment of the Supreme Court in Pallawi Resources
Ltd. v. Protos Engineering Company Pvt. Ltd.,
MANU/SC/0205/2010, she submits that the Act must be read as a
whole and not in isolation. As the land is forming part of the highway
that vests in the Central Government, the prescription of penalty as a
condition for grant of licence to access the highways cannot be
faulted.
5. Lastly, she submits that in any case, mere use of the word
"penalty" in the Impugned Circular is not determinative of the nature
of the demand. She submits that the nature of the demand is in fact of
regularization charge and is therefore a fee.
6. I have considered the submissions made by the learned counsels
for the parties. Section 23 of the Act prescribes that all land forming
part of the Highways vests in the Central Government. Section 24(1)
of the Act provides that no person shall occupy any Highway Land or
discharge any material through drain on such land without obtaining
prior permission, in writing, of the Highway Administration. Section
26 of the Act provides for removal of "unauthorized occupation" from
Highway Land.
7. "Unauthorized Occupation" is defined in Section 2(m) of the
Act as under:
"(m) "unauthorised occupation" means any occupation of
the highway land, without permission under this Act for
such purpose, by a person who--
(i) is trespasser on the Highway; or
WP(C) No.82/2015 Page 3
(ii) for the time being is paying or is liable to pay to
other person rent or any portion of the rent of the
premises on a Highway; or
(iii) lives in or otherwise uses any premises on a
Highway; or
(iv) is a rent-free tenant of any premises on a
Highway; or
(v) is a licensee of any premises on a Highway for its
possession; or
(vi) is liable to pay damages to the owner of any
premises on a Highway for the use or possession of
such premises."
8. Sub-section (6) of Section 26 of the Act further empowers the
Highway Administration to impose penalty on any person for the
failure of such person in removing the "unauthorized occupation" in
spite of notice in this regard being issued by the Highway
Administration under Sub-section (2) of Section 26 of the Act. Sub-
section 6 of Section 26 of the Act is reproduced hereinbelow:
"Section 26 Removal of unauthorized occupation.
xxxxxx
"(6) Where the service of notice under sub-section (2)
has been made under sub-section (4) or sub-section (5)
and the unauthorised occupation on the highway land in
respect of which such notice is served has not been
removed within the time specified in the notice for such
purpose and no reasonable cause has been shown before
the Highway Administration or the officer authorised by
such Administration in this behalf for not so removing
unauthorised occupation, the Highway Administration or
such officer as the case may be, shall cause such
unauthorised occupation to be removed at the expenses of
the Central Government or the State Government, as the
case may be, and impose penalty on the person to whom
WP(C) No.82/2015 Page 4
the notice is addressed which shall be five hundred
rupees per square metre of the land so unauthorisedly
occupied and where the penalty so imposed is less than
the cost of such land, the penalty may be extended equal
to such cost."
9. Control of access to the National Highways is dealt by Chapter
IV of the Act. Section 28 of the Act prescribes that no person shall
have the right to access a Highway except with the permission of the
Highway Administration granted either generally or specifically and
subject to the Guidelines and Instructions issued by the Central
Government from time to time. Section 29 of the Act prescribes the
procedure for permission to access to highway. In terms of Section
29(2) of the Act, specific permission to access highway may be
granted by the Highway Administration with or without terms and
conditions as may be prescribed.
10. Section 29(4) of the Act further provides that where any person
contravenes the conditions on which the permission has been granted
by the Highway Administration to access the highway, the Highway
Administration or the officer authorized by such Administration shall
have the power to remove the access of such person, even with use of
necessary force with assistance of police.
11. Sections 28 and 29 of the Act are reproduced hereinbelow:
"28. Right of access.--(1) No person shall have right of
access to a Highway either through any vehicle or on foot
by a group of five or more persons except permitted by the
Highway Administration either generally or specifically in
the manner specified in section 29. (2) The access to a
Highway under sub-section (1) shall be subject to the
guidelines and instructions issued by the Central
WP(C) No.82/2015 Page 5
Government from time to time. (3) The Highway
Administration may, by notification in the Official Gazette,
declare a Highway or any portion thereof to be limited for
access in the manner as specified in such notification and
may also impose any restriction or control on such access
to, from or across such Highway as specified in that
notification.
29. Procedure for permission to access to Highway.--(1)
The general permission under sub-section (1) of section 28
shall be given by issuing notification in the Official Gazette
for such purpose and specific permission under that sub-
section shall be given in the manner specified hereinafter
under this section.
(2) Any person desirous of obtaining specific permission
referred to in sub-section (1) may make an application in
the prescribed form to the Highway Administration
specifying therein the means of access to which such
permission relates and shall also be accompanied with such
fees as may be prescribed and the Highway Administration
shall, after considering the application either give the
permission with or without the terms and conditions as may
be prescribed or reject the application as it may deem fit.
(3) In case, where the permission has been given in respect
of the application made under sub-section (2), the person to
whom such permission has been given shall obtain the
licence from the Highway Administration in the prescribed
form enumerating therein the terms and conditions, if any,
subject to which such permission has been given, and such
permission shall be renewed after such period and in such
manner as may be prescribed.
(4) If any person contravenes the provisions of sub-section
(1) of section 28 or violates any terms and conditions
subject to which permission has been given under sub-
section (2) including non-renewal of licence obtained under
sub-section (3), his access to Highway under the permission
under sub-section (1) or sub-section (3), as the case may be,
shall be deemed to be unauthorised access and the Highway
WP(C) No.82/2015 Page 6
Administration or the officer authorised by such
Administration shall have the power to remove such access
and where necessary, the Highway Administration or such
officer may use the necessary force with the assistance of
the police to remove such access."
12. A reading of the above provisions would clearly show that
penalty can be imposed only on the person who, in spite of notice to
remove "unauthorized occupation" issued by the Highway
Administration, fails to remove such unauthorized occupation within
the time specified in the notice for such purpose and for no reasonable
cause. As far as the unauthorized access to the highways is concerned,
there is no power to levy penalty. The only power vested in Highway
Administration is to remove such access, even with use of necessary
force.
13. As held by the Supreme Court in Saraya Industies (supra) and
Industrial Corporation (P) Ltd. (supra), power to levy penalty must
be prescribed in the Statute or in a valid Subordinate Legislation and
cannot be vested by way of issuance of a Circular/Letter.
14. The Impugned Guidelines, which are mere Administrative
Instructions provide for imposition of penalty on existing Fuel
Stations which, though constructed as per Ministry norms, do not have
prior approval obtained from the Ministry. In view of the law
enunciated by the above judgments, imposition of such penalty cannot
be sustained.
15. Clause 7 of the Impugned Circular is reproduced hereinbelow:
"7. In case of existing fuel stations constructed as per
Ministry's norms but for which prior approval has not
WP(C) No.82/2015 Page 7
been obtained from the Ministry, a penalty of
Rs.25,00,000/- shall be imposed on the Oil Company to
regularize such fuel stations. However, in case of fuel
stations existing on newly declared National Highways,
there shall be no penalty but, such Oil Companies shall
have to pay the processing fee of Rs.10,000/- to the
Highway Administration and will be granted 6 months'
time to comply with the Ministry's norms. If the
deviations from Ministry's norms are non-rectifiable,
such cases shall be dealt on case to case basis."
16. A reading of the above clause would clearly show that Rs.25
lacs is being demanded as a "penalty" for regularizing the prior default
of the Fuel Stations in not obtaining permission under Section 29(2) of
the Act for right to access to Highway. It is not a „fee‟ prescribed for
considering the application of such Fuel Stations for grant of such
permission.
17. The true nature of the imposition is further evident from the
Impugned Order itself, which, while levying such charges, states as
under:
" ......It is established that the fuel station is being
operated presently without a valid license deed issued by
Ministry, IGL has failed to justify their inability to obtain
license from Ministry till date.
The aforesaid fuel station deserves to be de-energized
immediately. However keeping in view the fact that the fuel
facility is of utmost public concern and de-energizing the
defaulting fuel station immediately is likely to put the road
users to severe hardship and inconvenience, IGL is given
fast opportunity to get the access to their GN station
regularized. The instant complaint is finally disposed off
with following directions:
WP(C) No.82/2015 Page 8
i. Since IGL has been operating the fuel station
unauthorizedly since its commissioning on
27.09.2001 i.e. after declaration of the road as NH-
8, without even paying license fee or any NH land
rent, thereby causing loss of revenue to the Central
Govt, they are liable to pay a penalty of Rs.25. Lacs
as per para 7 of Ministry's guidelines dated
24.07.2013 to regularize their access permission.
The penalty recovered from IGL shall be creditable
to central revenue head 1054-CR."
18. The submission of the learned counsel for the respondents that
imposition of such penalty can find its source under Section 28(2) or
Section 29(2) of the Act, also cannot be accepted. Section 28(2) of the
Act states that the „access‟ to a Highway shall be subject to the
„guidelines and instructions‟ issued by the Central Government.
Similarly, Section 29(2) of the Act states that permission to access a
Highway may be given „with or without the terms and conditions as
may be prescribed‟. Both these provisions merely provide for manner
and mode in which applications seeking permission to access
Highways are to be considered and what conditions are to be imposed
for grant of such permission. They do not empower the administrative
authority to levy penalty for any contravention of the Act. In fact, the
Central Government has also framed the Highways Administration
Rules, 2004. Rule 15 of these Rules lay down the terms and
conditions for permission to access a Highway. Rule 15(v) speaks
about guidelines relating to safety and convenience of traffic on the
Highway, hygiene, prevention of nuisance and pollution on the
WP(C) No.82/2015 Page 9
Highway. Clearly therefore, the penalty for past violations cannot be
prescribed in the name of „Guidelines‟ or „terms and conditions‟.
19. The submissions of the learned counsel for the respondents that
the levy of penalty in the Impugned Order was for unauthorized
occupation and not for having an unauthorized access to the Highway
also cannot be accepted. While it is correct that the Show Cause
Notice dated 21.03.2014 was issued to the petitioner under Section
26(2) of the Act and the Status Report dated 06.05.2014 stated that an
area of 63.40 sq.mtrs of the National Highways was being used by the
petitioner, the Impugned Order rendered no finding on this issue. As
would be evident from the quotation of the Impugned Order
reproduced hereinabove, the penalty was levied only because of the
failure of the petitioner to obtain the licence for the earlier years while
it was in operation.
20. In view of the above, Clause 7 of the Impugned Circular dated
24.07.2013 and imposition of penalty under the Order dated
11.08.2014 cannot be sustained and are set aside.
21. This Court by an interim order dated 06.01.2015 had directed
the petitioner to submit a Bank Guarantee in favour of the Registrar
General of this Court in the sum of Rs.25 lacs. As the Impugned
Demand has been set aside, the same be released back to the
petitioner.
22. The petition is allowed. There shall be no order as to costs.
NAVIN CHAWLA, J
FEBRUARY 12, 2020/Arya
WP(C) No.82/2015 Page 10
