Public-private partnership agreements must balance private interests with public welfare.

Case Citation
Court Name: Supreme Court of India
Case Title: NOIDA Toll Bridge Company Ltd. v. Federation of NOIDA Residents Welfare Association and others
Case No.: Civil Appeal No. ____ / 2024 (Arising out of Special Leave Petition (C.) No. 33403 / 2016)
Date of Judgment: 20th December 2024
Judge(s): Hon’ble Justice Surya Kant

Facts of the Case
The case involves a dispute concerning the levy and collection of toll on the DND Flyway, a project executed under a Concession Agreement dated 12th November 1997. This agreement allowed the NOIDA Toll Bridge Company Ltd. (NTBCL) to recover costs through toll charges. Over time, it was alleged that the project costs had been fully recovered, yet toll collection continued, prompting the Federation of NOIDA Residents Welfare Association to challenge the legality of this toll in public interest litigation.

Contentions of the Appellant
The appellant, NTBCL, argued that the High Court erred in invalidating the Concession Agreement. They emphasized that:

1. The writ petition was filed with significant delay and laches.
2. Public interest litigation cannot annul a government policy decision like the Concession Agreement.
3. The agreement was a result of rigorous deliberations and approvals from various committees, including international financiers like the World Bank.
4. The toll charges were justified under the agreement and the applicable legal framework.

Contentions of the Respondent
The respondent, Federation of NOIDA Residents Welfare Association, countered that:

1. NTBCL had already recovered the project costs, making further toll collection unwarranted.
2. The Concession Agreement contained arbitrary clauses favoring NTBCL at the public’s expense.
3. The arrangement was perpetually designed to delay the transfer of assets back to NOIDA.
4. Public interest warranted judicial scrutiny of such agreements, which disproportionately burdened commuters.

Issues on this Judgment

• Whether the writ petition filed in public interest was maintainable?
• Whether the non-floating of tenders for the project was justified?
• Whether NTBCL’s authority to levy fees constituted excessive delegation of power?
• Whether the Concession Agreement’s provisions violated public policy?
• Whether NTBCL had recovered the total project cost and returns?
• Whether NOIDA was entitled to recover dues related to advertisements?

Observations/Findings of the Supreme Court
The Supreme Court found several irregularities, including the perpetual nature of the Concession Agreement and the lack of competitive bidding. It held that the agreement’s terms unjustly favoured NTBCL, leading to indefinite toll collection. The Court highlighted that NTBCL had already recovered significant sums, rendering further toll collection inequitable and against public interest.

Principle(s) Laid Down by the Court

1. Public-private partnership agreements must balance private interests with public welfare.
2. Arbitrary or perpetual arrangements in such agreements violate constitutional principles.
3. Delegation of toll levying authority must strictly adhere to statutory provisions.

Final Order
The Supreme Court upheld the High Court’s judgment, directing NTBCL to cease toll collection immediately and prohibiting further enforcement of clauses in the Concession Agreement that contravened public policy and statutory provisions.

Importance of this Judgment to Society
This judgment reinforces the principle of fairness in public-private partnerships and safeguards public interest against exploitative contractual provisions. It upholds the need for accountability in infrastructure projects involving public resources and establishes judicial oversight over agreements that disproportionately burden citizens.