NOIDA Toll Bridge Company Ltd. v. Federation of NOIDA Residents Welfare Association and Others

Issue for consideration

The issue concerned a challenge to collection and levying of toll, as legitimised by provisions enumerated in Agreement dated 12.11.1997 (Concession Agreement), executed between Appellant-NOIDA Toll Bridge Company Limited (NTBCL), the New Okhla Industrial Development Authority (NOIDA) and the Infrastructure Leasing and Financial Services Limited (IL&FS); The Concession Agreement conferred upon NTBCL the rights necessary for implementation of the Delhi NOIDA Bridge Project or the Delhi-NOIDA Direct Flyway (DND Flyway/Project) and, in connection thereto, the collection and levying of toll; In a writ petition purportedly filed in public interest by Respondent No.1-Association established to espouse the cause of NOIDA residents before the public authorities, the High Court vide the impugned judgment directed NTBCL to cease the imposition of user fees or toll upon commuters using the DND Flyway. In the instant appeal filed by NTBCL, inter alia the following issues arose for consideration, namely, (i) Whether the Writ Petition purportedly filed in public interest was maintainable before the High Court; (ii) Whether the non-floating of tenders was justified in the instant case; (iii) Whether the power to levy fees could be delegated to the Appellant and if so, whether it was a case of excessive delegation; and (iv) Whether Art.14 of the Concession Agreement read with the formula used therein was opposed to public policy.

Held

petition filed by Respondent No. 1, which had the requisite locus standi – The writ petition filed in public interest was maintainable – PIL:

While public interest litigation serves as an effective tool for addressing the grievances of the public, it must be carefully scrutinised to prevent misuse or abuse by those with ulterior motives – Courts must look beyond the surface to assess whether the litigation has been genuinely initiated in the interest of the public or as a result of mischief – The essence of PIL lies in its aim to remedy genuine public wrongs or injuries rather than being driven by personal vendetta or malice – On facts, Respondent No. 1 is a Society duly registered under the Societies Registration Act, 1860, with the primary objective of promoting the welfare of NOIDA residents – The society acts as a bridge between the residents and public authorities, catering to the former’s needs for essential civic amenities – Given this object, it is clear that Respondent No. 1 approached the High Court in good faith, with a view to safeguard the interests of NOIDA residents, who had been subjected to the levy of toll at the DND Flyway under the guise of user fees by NTBCL-Appellant – Consequently, there is no merit in NTBCL’s contention that Respondent No. 1 lacked locus standi in approaching the High Court. [Paras 12, 14, 15]

Constitution of India – Art.226 – Toll charged to users of DND Flyway – Respondent No. 1 filed Writ Petition in High Court seeking direction to discontinue the toll – On facts, continuing cause of action – No delay or laches in filing the writ petition – Doctrine of Delay and Laches:

The contention regarding delay and laches in filing the writ petition is wholly misconceived and misdirected for the reason that, writ proceedings u/Art.32 or 226 are not guided by the provisions of the Limitation Act, 1963, but instead, by the Doctrine of Delay and Laches – It is ubiquitous that the doctrine of delay and laches cannot be applied stricto senso to writ petitions invoking public interest jurisdiction unless the court is satisfied that the party has not approached it with clean hands – While delay is a material factor there is no fixed period of limitation for invoking jurisdiction u/Art.226 and each case should be considered on its own facts and circumstances, thus allowing for a more liberal approach when applying this doctrine – The doctrine is not a rigid rule but is rather a practice that is founded on exercise of sound judicial discretion – Also, cause of action in the circumstances of the case

Constitution of India – Art.226 – Toll charged to users of DND Flyway – Contract involving a State instrumentality – Scope of judicial intervention:

1. Judicial review, being a dynamic process as opposed to static, has experienced a significant shift in terms of the degree of judicial interference in contractual disputes, especially when one of the parties involved is the State or its instrumentalities – This is because when contractual power is exercised for public purposes, the State and its instrumentalities bear the responsibility to act fairly, without arbitrariness or caprice – In such situations, where State action is challenged as arbitrary or capricious, courts are justified in intervening through judicial review to determine whether the State has adhered to the principles embodied in Art.14 of the Constitution of India, which mandates fairness and non-arbitrariness in State actions – Considering that the Concession Agreement involves not only entities like IL&FS and NTBCL but also a Public Authority such as NOIDA, it is evident that the Concession Agreement, though commercial in nature, is subject to judicial scrutiny – This is particularly true given the public interest concerns raised by Respondent No. 1, while challenging the fairness and legality of the toll collection and overall execution of the Agreement – The involvement of a public authority necessitates cognizance to ensure that the Agreement upholds constitutional principles – In such scenarios, it becomes the solemn duty of the judiciary, entrusted under the Constitution as an independent arbiter, to intervene and protect the interests of the public at large. [Paras 26, 27]

Contract – Award of contract for development and construction of DND Flyway project to NTBCL – Challenged, for not following any formal tender procedure – Contract awarded to NTBCL through the Concession Agreement by State authorities and NOIDA was unfair, unjust and inconsistent with Constitutional norms:

1. NTBCL entered into an agreement with NOIDA to undertake a project that involved an overwhelming public element, comprising of public funds and public assets – When such a project is undertaken by the State in partnership with a private entity, the element of public interest necessitates strict adherence to Constitutional obligations – The State is obligated to ensure that its actions remain free from any arbitrariness or capriciousness, particularly when public welfare is at stake. [Para 31]