(T.S. Thakur and Kurian Joseph, JJ.)
DSC-Viacon Ventures Pvt. Ltd. (Now Known as DSC Ventures Pvt. Ltd) ________ Appellant
v.
Lal Manohar Pandey and Ors. _____________ Respondent(s)
Civil Appeal Nos. 6781-6782 of 2015, decided on August 27, 2015
[Arising out of SLP(C) No. 34705-34706 of 2014]
The Order of the court was delivered by
Order
1. Leave granted.
2. These appeals arise out of an order dated 09.10.2014 passed by the High Court of Chhatisgarh at Bilaspur in Writ Petition No. 7 of 2014 filed in public interest. The writ petition prayed for a direction to the respondent-Union of India and the State of Chattisgarh to undertake proper repair and maintenance of a 26 kms. long road connecting Raipur and Durg in the State of Chattisgarh. A further direction restraining the Concessionaire-M/s. DSC Viacon Private Limited not to collect any toll fee from the users of the road till the overlaying and maintenance thereof was completed in accordance with the concessionaire agreement and the guidelines on the subject, was also prayed for.
3. The petitioner’s case in the writ petition was that the construction and upkeep of the road in question was allotted to the Concessionaire on the Build Operate and Transfer (BOT) basis and even when the road was in very poor shape, the Concessionaire was recovering user charges/toll from the public without discharging its obligations under the agreement. Complaints to different administrative authorities including the Superintendent of Traffic Police had, according to the writ-petitioner, fallen on deaf ears and led to no action or improvement in the situation. The writ petitioner alleged a complete breakdown of official machinery allowing the illegality to continue unabated due mainly to the alleged inaction on the part of the State Government and the failure of its officers to enforce duties enjoined upon the Concessionaire under the agreement. It was further alleged that a Committee appointed for the purpose had also found several deficiencies and discrepancies in the upkeep of the road but all those deficiencies continued to persist while the Concessionaire was recovering crores of rupees from the public without so much as maintaining the road in proper shape and condition.
4. By an order dated 09.10.2014, a Division Bench of the High Court after notice to the respondent in the writ petition passed an order requiring the Concessionaire to file an undertaking within two weeks to the effect that it will ensure proper repair of the road to the satisfaction of respondents No. 1 to 3. It was further directed that if the undertaking was not filed, the amount of toll collected by the Concessionaire shall be deposited with the respondent-UOI. When the matter came up once again before the High Court on 26.11.2014, the Concessionaire appears to have argued that the disputes sought to be raised by the writ-petitioner were contractual in nature which could be effectively adjudicated upon only in arbitration proceedings that had been started by the Concessionaire before the Arbitrator. It was also contended that the Arbitrator had in the said proceedings issued a stay order against the proposed termination of the contract on account of the alleged failure of the Concessionaire to keep the road in good condition. It was argued that in case the Concessionaire failed to repair the road, the Government of India could carry out the repairs at the cost of the Concessionaire. It was urged that the Concessionaire was making its best efforts to keep the road in good condition in terms of the agreement executed between respondents No. 1 to 3 and the Concessionaire.
5. The High Court taking note of the rival submissions directed the respondent-Concessionaire to deposit the entire toll collected on a daily basis in some nationalised Bank and to refrain from withdrawing the same until further orders. That direction came on a prima facie finding recorded by the High Court that the Concessionaire had instead of complying with the directions earlier issued by the Court regarding the maintenance of the road tried to flee from justice by filing an application for modification of the said earlier order. Aggrieved by the aforementioned two orders, the Concessionaire company has filed the present special leave petitions to assail the same.
6. When the matter initially came up before this Court on 06.01.2015, we issued notice to the respondents and permitted the petitioner to file the undertaking which the High Court had demanded in terms of its order dated 09.10.2014 before this Court. We had also by the same order stayed further proceedings before the High Court subject to the condition that the Concessionaire complies with the directions of the High Court regarding the deposit of the amount collected as toll/fee in a schedule bank. It is not in dispute that the undertaking referred to in our order dated 06.01.2015 was filed by the Concessionaire. It is also not in dispute that the Concessionaire has been depositing the toll tax collected by it in a schedule bank and that the total amount so deposited till date is in a sum of Rs. 11,63,58,801/-.
7. When the matter came up once again before this Court on 27.01.2015, this Court after hearing learned counsel for the parties constituted a Committee comprising M/s. Arvind, Former District Judge of the Raipur, as Chairman, Chief Engineer, In-charge of National Highway Authority of India of that region and the Chief Engineer, Public Works Department of the State of Chattisgarh as members with a direction to inspect the road and submit a report as to its condition as also the nature and the extent of repairs required to be carried out. The Committee was also asked to estimate the cost of the repairs required and to report whether any repair work had at all been carried out at any stage in the past. The Committee was left free to associate a representative of the Concessionaire and respondent-Government of India with the process of inspection provided they do not cause any interference with the process of inspection, measurement or estimation of the cost of repair etc. by the committee. The Committee has accordingly inspected the road length and submitted a report on 05.05.2015. Learned counsel for the parties have had an opportunity to look into the report and to submit their responses.
8. We have today heard learned counsel for the parties at some length. The primary question that falls for determination presently is whether the Concessionaire-appellant herein had been rightly directed to carry out the repair and to deposit the amount collected by it towards toll. The report submitted by the Committee that comprised a retired District and Sessions Judge and two Chief Engineers who are experts in the field, sufficiently proves that the road needs extensive repairs. The Committee has rightly associated with the process of inspection of the road, representatives of the National Highway Circle and the Managing Director of the appellant-Concessionaire, and observed:
“(1) The site inspection of the road shows that road at few patches having rutting and damage on surface, and wearing surface of the main carriageway is hungry which require repairs as well as cleaning. Therefore, the committee members are of the opinion that:
(a) Filling of undulation, ruts, depressions at wheel cracks with bituminous materials is required as well as the road surface may also be provided with bituminous treatment to heal hungry surface.
(b) Shoulders need filling and dressing.
(c) The medians need repair to bring upto the standard norms.
(d) The guard stones almost at many places need to be replaced.
(e) The edge lining marking and centre lining marking on main carriageway and service road by thermoplastic paint is required.
(f) At places where vegetations/shrubs are not sufficient, to stop glaring of head lights of the vehicle coming from opposite direction, plantation is required.
(g) Complete cleaning of drains at one time followed by regular maintenance of drains is required.
(2) The Committee has also taken photographs of the main carriageway, service road, median, guard stones, drains etc. at few locations and also taken complete videography of the project road. A photograph album containing 37 pages and videography covering in five CDs are also enclosed herewith as Annexure-I and II.
(3) Estimate cost of repairs required: A cost estimate amounting to Rs. 19.38 crores has been got prepared with the help of the Technical Officers of the Public Works Department for the above shortcomings which is enclosed herein as Annexure-III.
(4) So far as query regarding any repair work carried out at any stage is concerned the answer and details are enclosed herewith separately as Annexure-IV.”
9. The report is submitted herewith in compliance to Hon’ble Supreme Court’s Order dated 27.01.2015.
10. It is evident from the above that not only does the road require repairs, the estimated cost of such repair work is in the range of Rs. 19.38 crores. The estimate, it is noteworthy, has been prepared with the help of a Technical Officer of the Public Works Department. It is obvious that the repair work has not been adequate during the time the Concessionaire was collecting toll from the users of the road.
11. On behalf of the appellant-Concessionaire, it was argued by Mr. Akhil Sibal that the road has already been taken over by the Central Government w.e.f. 03.03.2015 and that the Concessionaire is no longer making any collections. It was further submitted that the Concessionaire has invoked the arbitration clause and has made a claim for payment of Rs. 37.04 crores before the Arbitral Tribunal, established under the M.P. State enactment as applicable to the State of Chattisgarh. It is submitted that while according to the appellant-company repairs have been conducted from time to time and the estimate of future repairs as furnished by the Committee appears to be exaggerated, the questions that need to be determined are (i) What is the extent of repairs required and (ii) What is the extent recovery, if any, to be made from the Concessionaire. It was, according to Mr. Sibal, premature for this Court to examine the nature and extent of failure on the part of the Concessionaire or to direct the Concessionaire to make any payment towards the proposed repairs. Mr. Sibal all the same submitted that without prejudice to the rights and contentions open to the Concessionaire before the Arbitral Tribunal, he has instructions to say that the amount of Rs. 11,00,00,000/- lying in deposit could be made over to the Central Government to enable the latter to carry out the repairs. The balance of the amount, if any, required as per the estimate could be left to be arranged by the Government of India subject to the ultimate outcome of the arbitral proceedings.
12. Appearing for the Government of India Mr. A.K. Sanghi, learned senior counsel, submitted that the road in question has not been kept in good repairs as is evident from the report and the estimated costs of such repairs which is the primary liability of the Concessionaire.
13. It was argued that while the arbitral proceedings have been initiated by the Concessionaire, the Government of India is filing a counter-claim for a sum of Rs. 58 crores or so. He urged that the Government of India have also invited tenders for fixing another contract for carrying out the repair work and for completion of the incomplete work left by the Concessionaire at the cost and expense of the Concessionaire. He submitted that the new contractor has nearly nine months time to undertake the repair and other work left incomplete by the Concessionaire.
14. On behalf of the original writ-petitioner, it was submitted by Mr. J.N. Dubey that the report submitted by the Committee appointed by this Court shows more than clearly that the road is in very bad shape. If that be so, there is no reason why the public at large should be asked to pay any toll fee for its usage. It was contended that although in terms of notification dated 02.03.2015 issued by the Central Government under Section 7 of the National Highway Act, 1956 read with Section 3 of the National Highways Rules the Government have stipulated a fresh schedule of toll rates recoverable from different vehicles yet the said recovery reduced to 40% of the existing rate is also not justified. Mr. Dubey submitted that reduction of the fee to 40% in terms of the above notification is not on account of the poor condition of the road but because the rule itself provides for such a reduced rate of toll collection. Even the reduced rate of fee should however be recoverable only if the road is in good repair. Since that is not the position in the instant case as is evident from the report of the Committee there is no justification for charging even 40% of the rate of fee as stipulated under the notification till such time the Government of India carries out the repairs in terms of the report submitted by the Committee.
15. It was further argued by Mr. Dubey that the damage to the road is generally caused because of over loading of commercial vehicles in breach of the statutory weight limits prescribed by the competent authority. The damage so caused becomes endemic and puts the general public to severe inconvenience, as there is hardly any enforcement of the prescribed weight limits. It was urged that in order to prevent the misuse of roads in violation of the statutory weight limits prescribed for different vehicles, this Court could intervene in public interest to ensure that such rampant damage resulting in a national loss is prevented and those violating the weight limits suitably prosecuted and/or penalized. It was also urged that certain other petitions filed in public interest before us are already pending on this subject.
16. We have given our anxious consideration to the submissions made at the Bar. The immediate concern of the writ-petitioner-respondent herein and so also this Court is about the need for repair of the road in question. The Government of India having taken over the management of the road including collection of toll etc. w.e.f. 03.03.2015 is said to have taken steps for fixing another contract that would ensure proper repair to the road and also completion of the incomplete work. In that view all that would remain to be determined is whether the amount lying in deposit should be transferred to the Government of India or released to the Concessionaire.
17. Mr. Sibal, as seen earlier, was candid in stating that keeping in view the report submitted by the Committee, the amount lying in deposit could be transferred to the Government of India for being used on the proposed repair work. That amount, it is true, is less than the estimated cost of repairs, but the question as to what is the extent of actual expenditure on repairs and whether any further amount is recoverable from the Concessionaire towards such costs is a matter that may be left to be determined in the arbitration proceedings currently afoot with both the sides making claims and counter-claims in the same. We, therefore, direct that the amount lying in deposit in; the schedule bank shall stand transferred to the Government of India who shall take immediate steps to finalise the proposed new contract and closely monitor the performance of the successful contractor in terms of the repairs to the road and the completion of the incomplete works. The question whether any further amount is recoverable from the Concessionaire towards the repairs which it was required to carry out is left open by us to be determined in the arbitration proceedings already initiated by the Concessionaire in which the Government of India can make a counter claim as proposed.
18. That leaves us with the question whether recovery of toll fee at 40% of the earlier rate as stipulated under Notification dated 02.03.2015 is just, fair and proper keeping in view the poor condition of the road. Our answer to that question is in the negative. That the road is in poor shape and needs repairs has been established by the road of the Committee. That being so there is no justification for recovery of the toll fee otherwise chargeable from the users without such repairs being carried out. Toll, it is well settled, is recoverable from those using the road as a recompense for such user. There is an element of quid pro quo in any such charge. The legal position is in this regard settled by a long line of decisions rendered by this Court. Reference to some of those decisions should suffice, but before we do so, we may refer to Black’s Law Dictionary, 7th Edition, which defines the term ‘toll’ as under:
“1. A sum of money paid for the use of something; esp., the consideration paid to use a public road, highway, or bridge.
2. A charge for a long-distance telephone call.”
19. In Kamaljeet Singh v. Municipal Board, Pilkhwa [(1986) 4 SCC 174] this Court held that the consideration for a toll usually is some amenity, service, benefit or advantage which a person entitled to the toll undertakes to provide for the public in general, or the persons liable to pay the toll. So also in State of U.P. v. Devi Dayal Singh [(2000) 3 SCC 5] a three-Judge Bench of this Court held that public benefit envisaged under Section 2 of the Tolls Act, 1851 was the making or repairing of any road or bridge at the expense of the State Government. For the advantage obtained by the public by the construction of the roads and bridges, the State Government was entitled to reimburse itself for providing the service. The Court traced the historical growth of the concept of ‘toll’ in English jurisprudence in the following passage:
“7. The concept of ‘toll’ is derived from English jurisprudence. Shorn of connotations which are historically irrelevant in this country, a ‘toll’ may be defined as a sum of money taken in respect of a benefit arising out of the temporary use of land. It implies some consideration moving to the public either in the form of a liberty, privilege or service. In other words, for the valid imposition of a toll, there must be a corresponding benefit. (See in this connection Hammerton v. Earl of Dysart [(1961) 1 AC 57, 58]; Brecon Markets Co. v. Neath & Brecon Rly. Co. [(1872) 7 CP 555]; Hindustan Vanaspati Mfg. Co. Ltd. v. Municipal Board, Ghaziabad [AIR 1962 All 25]; Maheshwari Singh v. State of Bihar [AIR 1966 Pat 462]; Mohd. Ibrahim v. State of U.P. [AIR 1967 All 24]; and Kamaljeet Singh v. Municipal Board, Pilkhwa [(1986) 4 SCC 174].”
20. The levy and collection of toll in the case at hand is obviously on the assumption that the road is being properly maintained and that for its continued maintenance and upkeep the users of the road must contribute so that the Govt. is reimbursed the expense incurred by it. In case, however, the maintenance of the road is absent or is significantly poor as appears to be the position in the case at hand, recovery of toll at the stipulated rate would be rendered unfair and unjustified.
21. Having said that the question is what should be the extent of reduction on account of poor maintenance of the road. It is nobody’s case that the entire length of 26 Kms. is poorly maintained. At least the report submitted by the Committee does not suggest so. There are patches which are extensively damaged and require repair causing inconvenience to the users. That does not, however, necessarily mean that the entire charge towards toll must be wiped out. The reduction, in our view, should be proportionate to the extent of damage suffered by the road or the failure to maintain the same. Having said that we must hasten to add that there is no empirical data to indicate the extent of road length and the resultant inconvenience to the users of the road. A certain amount of guesswork is, therefore, unavoidable in the matter of determining the extent of relief which the road users may be entitled to. Keeping all these factors in view, we are of the opinion that the rate of toll/fee prescribed in terms of notification dated 02.03.2015 should be reduced to half of what is stipulated in the notification. This means that instead of 40% levied by the Government the rate shall be 20% of the rates earlier in force. We order accordingly. The reduced fee shall be recoverable till such time the road is repaired and a report certifying the repair to be satisfactory submitted to the Govt. by a Committee appointed by the Government of India.
22. That brings us to the need for this Court’s intervention in the matter enforcement of the weight limits stipulated for commercial load carriers. We are told that writ-petitions on that subject are pending before this Court. According to Mr. Gopal Singh, W.P. (C) Nos. 295 of 2010 and 171 of 2014 raise that question for the consideration of this Court. In the result we pass the following orders;
(i) To the extent this petition and Writ Petition No. 7 of 2014 pending before the High Court relate to repairs to be carried out by the Concessionaire and issues incidental thereto the same are finally disposed of in terms of the directions contained in the body of this order.
(ii) Writ Petition No. 7 of 2014 shall stand transferred to this Court for the limited purpose of considering whether weight limits prescribed for commercial carriers need to be enforced and directions in public interest issued to the concerned. Upon receipt of the records of the case the same shall be listed alongwith Writ Petition (C) Nos. 295 of 2010 and 171 of 2014 pending in this Court.
(iii) We request Mr. P.P. Malhotra, Senior Advocate, to assist us in the matter as Amicus Curiae. He shall have the liberty to take the assistance of an advocate-on-record to brief him in the matter. A copy of the paper book and a copy of this order shall be furnished to him by the Registry.
23. We make it clear that observations and findings recorded by this Court are limited to the disposal of these proceedings and shall not prejudice the parties in the matter of their claims and counter-claims before the Arbitral Tribunal. All contentions on either side shall, for that purpose, remain open. No costs.
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