SC Rejects Toll Imposition on DND Flyway, Slams Unjust Profit from Public Property

In a significant ruling, the Supreme Court has rejected the plea for the imposition of tolls on commuters using the Delhi Noida Direct (DND) flyway, emphasizing that no entity should be allowed to profit unjustly at the expense of the public. The Court noted that government procedures and policies designed for public interest must genuinely serve the public and not simply enrich private entities.

"The golden principle is that government procedures or policies must genuinely serve the public and not merely enrich private entities," said the bench of Justices Surya Kant and Ujjal Bhuyan. The Court dismissed an appeal by Noida Toll Bridge Company Ltd. (NTBCL) against an Allahabad High Court ruling from 2016, which had struck down the concession agreement in favor of NTBCL.

The Court also agreed with the High Court's observation that NTBCL had already recovered the project costs and substantial profits through toll collection, and therefore, further toll imposition was unjustified. "We find no error in the High Court's judgment in restraining the collection of user fees/tolls," the Court stated.

The Supreme Court further criticized the perpetual clause in the Concession Agreement, which allowed NTBCL to collect tolls indefinitely, calling it "unjust, arbitrary, and opposed to public policy." The Court emphasized the importance of fairness and transparency in public infrastructure projects, particularly when public funds and assets are involved. It was also noted that no competitive bids were sought for the project, further undermining its fairness.

The Court's judgment also highlighted the misuse of power and breach of public trust by officials from IL&FS, NTBCL, and the authorities in Noida, UP, and Delhi. The Court remarked that the manipulation of project funds for personal gain was a clear violation of trust, and while the matter could no longer be investigated under the Prevention of Corruption Act, it profoundly shocked the Court’s conscience.

Case Title: Noida Toll Bridge Company v. Federation of Noida RWA, SLP(C) No. 33403/2016