Latest JudgementNational Highways Fee (Determination of Rates and Collection) Rules, 2008
National Highway Authority of India v. Sugandha Sawhney and Ors., 2025
The subject is to Challenge to High Court’s directive reducing toll by 80% at NH–44 toll plazas due to ongoing highway construction.
Supreme Court of India·16 April 2025
Judgement Details
Court
Supreme Court of India
Date of Decision
16 April 2025
Judges
Justice Abhay S. Oka ⦁ Justice Ujjal Bhuyan
Citation
Acts / Provisions
Rule 4(9) of National Highways Fee (Determination of Rates and Collection) Rules, 2008
Facts of the Case
- A Public Interest Litigation (PIL) was filed before the Jammu & Kashmir and Ladakh High Court, seeking exemption from toll collection at Lakhanpur, Thandi Khui, and Bann Toll Plazas on NH–44 until the Delhi–Amritsar–Katra Expressway becomes fully operational.
- The petitioners argued that the Udhampur–Lakhanpur stretch of NH–44 had been under construction since 2021, and about 70% of the stretch remained incomplete.
- The High Court observed that commuters were paying full tolls despite degraded road conditions, which was unfair and unjust.
- Based on Rules 3(1), 3(2), and 4(9) of the National Highways Fee (Determination of Rates and Collection) Rules, 2008, the court found partial justification for toll reduction.
Issues
- Did the Jammu & Kashmir and Ladakh High Court have the jurisdiction to reduce toll rates at the Lakhanpur and Bann Toll Plazas during ongoing construction, and was such a reduction within its legal powers?
- Should toll collection be allowed or reduced on partially completed highways, like the Lakhanpur-Udhampur stretch, where the road conditions were deteriorated and not fully operational?
- Did the High Court's directive to reduce tolls beyond the statutory 75% allowed under the National Highways Fee Rules undermine the authority of the National Highways Authority of India (NHAI) to set toll rates?
Judgement
- The Supreme Court stayed the Jammu & Kashmir and Ladakh High Court’s order that had directed an 80% reduction in toll charges at Lakhanpur and Bann Toll Plazas until the completion of the highway construction between Lakhanpur and Udhampur on National Highway–44.
- The Court issued an interim order and noted that the toll rates could continue to be collected at 75% of the notified toll fee, as allowed by Rule 4(9) of the National Highways Fee (Determination of Rates and Collection) Rules, 2008.
- Solicitor General Tushar Mehta for NHAI argued that the High Court had overstepped its authority by directing a reduction in toll charges.
- He pointed out that NHAI had already reduced the toll in compliance with the existing rules, specifically Rule 4(9), which permits the 75% toll rate during the process of road widening from four lanes to six lanes.
- The Supreme Court seemed to agree with this argument, emphasizing that the High Court should not have directed such reductions without fully considering the rules and context under which tolls are regulated.
- The NHAI presented that the toll had already been reduced by 25%, and the High Court's reduction to 80% was excessive and not supported by the statutory rules.
- The Supreme Court clarified that toll collection at reduced rates (75%) is allowed during upgradation of roads and does not need to be suspended unless there is significant deviation from the rules.
- The High Court had observed that the highway was in a bad condition, making it unfair to collect full tolls from commuters who were not receiving the expected quality of service.
- It noted that commuters were paying tolls but were not receiving value due to the road's poor condition, as construction work had been ongoing for several years and remained incomplete.
- The PIL filed before the High Court argued that toll collection should be suspended until the Delhi-Amritsar-Katra Expressway was fully operational, as the Lakhanpur-Udhampur stretch was under construction and 70% incomplete.
- In response, the High Court had directed an 80% reduction in tolls until the stretch was completed and certified by an independent surveyor.
- The Supreme Court granted an interim stay on the High Court’s directive and scheduled the next hearing for May 19, 2025 to resolve the dispute comprehensively.
- The Supreme Court directed that the toll continue to be collected at 75% of the prescribed fee, following the prevailing toll regulations.
- The Supreme Court also noted that the High Court’s order about reducing toll charges might have been premature and should be reconsidered after a full trial of the case.
- The NHAI's appeal against the High Court’s judgment was allowed to proceed, and it was decided that a full trial would be conducted to assess whether further reduction or suspension of tolls was warranted.
Held
- The Supreme Court stayed the High Court's 80% reduction in toll charges at the Lakhanpur and Bann Toll Plazas on NH–44 until further proceedings. The toll will be collected at 75% of the notified fee, as per existing rules.
- The High Court exceeded its jurisdiction by mandating toll reductions in violation of the National Highways Fee Rules, particularly Rule 4(9), which allows a 25% reduction during road upgradation work. The NHAI’s 75% toll collection was in line with the law.
- The Supreme Court did not agree with the High Court’s direction to suspend toll collection, particularly considering the existing regulatory provisions that already reduced tolls during the construction phase. Therefore, NHAI is permitted to continue toll collection at reduced rates.
- The Supreme Court directed that the case proceed to trial, where the Commercial Court will address issues related to toll rates and toll collection fairness. The High Court’s initial dismissal of the case was deemed premature, requiring a deeper evaluation of toll policies and road conditions.
- The Supreme Court issued notice returnable by May 19, 2025 for further arguments on the matter, keeping the toll collection at 75% until the next hearing.
- The Supreme Court sided with NHAI's argument that toll reductions and adjustments should adhere strictly to statutory provisions and existing guidelines for infrastructure projects, ensuring both public interest and legal consistency.
Analysis
- Jurisdictional Limits of High Courts: The Supreme Court implicitly emphasized that High Courts must exercise caution in issuing directives that affect national infrastructure policy and financial regulations, especially in areas where statutory mechanisms already exist.
- Balance of Public Interest vs. Legal Framework: While the High Court highlighted the public hardship faced due to poor road conditions, the apex court focused on the need for rule-based governance, i.e., following the toll rules under the National Highways Act and associated regulations.
- Rule 4(9) of NH Fee Rules, 2008: This rule provides toll collection at 75% of the fee during upgradation of a four-lane highway to six lanes. The NHAI's argument rested on lawful compliance with this provision, which the High Court allegedly overlooked.
- Principle of Proportionality: The High Court’s decision to reduce toll by 80% may have been seen by the Supreme Court as excessive and not proportional to the issue at hand, especially when statutory reduction (75%) was already in place.
- Policy Considerations: The Court's intervention ensures that toll revenue streams essential for infrastructure financing are not abruptly disrupted due to judicial directions unless absolutely warranted.