SC stays Madras HC order, allows toll collection on NH38

The apex court maintained that halting the collection of toll was not the appropriate remedy and warranted a stay.

The Supreme Court on Monday stayed a Madras high court order that restrained the National Highways Authority of India (NHAI) from collecting toll fees on the Madurai–Tuticorin stretch of National Highway-38 due to poor road conditions. The top court observed that the high court’s June 3 direction was contrary to public interest and should not have been passed.

A bench comprising of justices Prashant Kumar Mishra and Manmohan admitted NHAI’s appeal against the high court order and issued notice (ANI)

A bench comprising of justices Prashant Kumar Mishra and Manmohan admitted NHAI’s appeal against the high court order and issued notice. “We are staying the high court order. You file your response,” the bench told senior advocate P Wilson, who appeared for the original petitioner, V Balakrishnan.

Additional solicitor general N Venkataraman represented the NHAI.

Wilson’s allegations included the alleged mismanagement of funds earmarked for roadside plantations and also highlighted the dilapidated state of the highway.

However, the apex court maintained that halting the collection of toll was not the appropriate remedy and warranted a stay.

In its June 3 ruling, the high court held that toll collection on NH-38 could not continue while the highway remained in substandard condition. “The road users are entitled to well-maintained national highways, and only then are they liable to pay the toll fee as prescribed by the authority,” said the HC, adding that the pendency of arbitration between the NHAI and its concessionaire was irrelevant to the rights of citizens.

The high court further stated that continued toll collection in the face of poor infrastructure was not only unjustified but also in violation of the obligations imposed on the NHAI under the National Highways Authority of India Act, 1988.

The petition filed by Balakrishnan sought action against the concessionaire, Madurai–Tuticorin Expressway Ltd, for the alleged mismanagement of funds allocated for roadside plantations under a termination agreement.

He also sought remedial steps for planting trees on the median and flanks of NH-38 and urged the suspension of toll collection until the road was restored to motorable condition.

The petitioner submitted that the concessionaire had failed to maintain the road as per contractual obligations, prompting the NHAI to formally terminate the agreement. Despite this, toll collection has continued unabated.

The high court had rejected NHAI’s objection that the petitioner lacked privity of contract and that the matter was purely contractual. It held that the petitioner had approached it as a toll-paying citizen, not as a contracting party.

“The petitioner is a road user who pays a toll whenever he travels from Madurai to Tuticorin, despite the highway not meeting the prescribed standards. Pendency of arbitration proceedings is not a ground to reject the writ petition,” the high court ruled.

Furthermore, the high court made a clear distinction between contractual disputes and public rights, stating that the right to collect toll is a conditional privilege linked to the provision of quality infrastructure.

“Collection of toll fee on the Madurai–Tuticorin National Highway is impermissible in its current state. Citizens are entitled to use a well-maintained road, and only then can toll be levied,” ordered the high court, adding that citizens should not suffer for breaches committed in contractual arrangements between NHAI and its contractors.

Accordingly, the high court directed NHAI to halt toll collection on the stretch until the road was repaired and brought up to standard. It, however, clarified that toll collection could resume once the required maintenance was carried out.

The high court has posted the matter for reporting compliance on June 18.