Institute of Legal and Management Studies

The Supreme Court has dismissed Noida Toll Bridge Company Ltd.'s petition seeking review of the judgment whereby its plea to impose tolls on the commuters of Delhi-Noida Direct (DND) flyway was rejected.

A bench of Justices Surya Kant and Ujjal Bhuyan passed the order yesterday.

The Court was considering two review petitions, one filed by NTBCL and another by Pradeep Puri (one of NTBCL's Directors). While the Court agreed to some changes in the judgment considering Puri's stance, NTBCL's challenge was outrightly dismissed.

Advocate Piyush Joshi, for Pradeep Puri, contended that there were no findings in the CAG report (relied upon by the Court) to the effect that he "did nothing". In this regard, attention was drawn to the following excerpt from the Court's judgment:

"The CAG Report shockingly reveals that the Directors of NTBCL, including Pradeep Puri (who it seems was a senior bureaucrat), apparently did not perform any responsibility, yet all their expenses, including high-end remuneration were added in the Total Project Cost."

It was further submitted that Puri was not a senior bureaucrat at the relevant time as he had already resigned from the civil service. "It's the personal nature of this observation which is unsupported in the CAG report, which is the focus of the review", Joshi contended. He further highlighted that Puri was not a party to the proceedings and the observations were not relevant to the determination of issues at hand.

Hearing the submissions, Justice Kant agreed to consider the modification of the observations in the judgment regarding Puri.

Insofar as NTBCL's review petition, it was contended that certain observations in the CAG report, which were beneficial to the Company, had escaped consideration. "I still have to maintain this project till 2031..." Senior Advocate Dr Aman Hingorani, appearing for the Company, submitted. However, the Court found the submission meritless and dismissed the petition. "You have already minted enough...[...] was an eye-opener...what a bureaucratic mind...what an accountant's mind!", remarked Justice Kant.

To recap, in December last year, the Court rejected NTBCL's appeal against Allahabad High Court's judgment of 2016 which struck down the concessionaire agreement in its favor, on the ground that it had recovered its costs and made sufficient profits. The High Court's ruling came in a PIL filed by Federation Of Noida Resident Welfare Association.

Concurring with the High Court's findings, the Supreme Court ruled that "NOIDA overstepped its authority by delegating the power to levy fee to NTBCL through the concession agreement and regulations, exceeding the scope of its power" and that there was "unjust enrichment of NTBCL at the cost of public suffering".

"General public has been forced to part with several hundreds of crores and even defrauded under the guide of providing public infrastructure...Considering the appellant has recovered the project cost, maintenance cost as well as [made] profit on its initial investment, there seems to be virtually no reason for the collection of user fees//toll to continue..", the bench pronounced. The language of the concessionaire agreement was "deliberately crafted" such that it was perpetually in effect and thus forever unjustly enriching NTBCL at the cost of NOIDA, it said.

Relying on the report of the Comptroller and Auditor General of India, the Court added, "[it] has very aptly highlighted the contributors to the growing unrecovered total project cost...we have held that the compounding nature of the formula, coupled with the unrealistic return rates and serious impropriety by all stakeholders involved has resulted in undue and unfair burden on the users, thereby contravening Article 14 of the Constitution".

The Court further noted that there was no tender from other interested companies and no competitive bidding was done. Hence, the award of the agreement to the NTBCL was violative of Article 14 of the Constitution and illegal.

"When a state undertakes a project involving an overwhelming public element, comprising of public funds and public assets, its actions must remain free of arbitrariness and remain grounded in a just, transparent and a well-defined policy. In this case, the government seems to have made no efforts to issue tender, invitations or seek competitive bids from other interested private companies. There is also nothing on record to suggest that following such a procedure would have been detrimental to the proposed project...selection of NTBCL without following proper procedure was in contravention of Article 14 of the Constitution."

The Court also held that the PIL was maintainable as public money was involved, although it was regarding a commercial contract.

Appearance: Senior Advocate Dr Aman Hingorani alongwith Advocates Raunak Dhillon, Madhavi Khanna and Nihaad Diwan (for NTBCL); Advocates Piyush Joshi and Sumiti Yadava, AoR Sonakshi Malhan (for Pradeep Puri)

Case Title: PRADEEP PURI Versus NOIDA TOLL BRIDGE COMPANY LIMITED AND ORS., Diary No. 1373-2025 (and connected case)