The Madras High Court has directed the National Highways Authority of India (NHAI) not to collect toll fees from commuters using the Madurai–Tuticorin National Highway (NH-38), holding that toll collection is impermissible so long as the highway remains in a dilapidated condition and falls short of the statutory standards of maintenance under the National Highways Authority of India Act, 1988.
A Division Bench of Justice S.M. Subramaniam and Justice Dr. A.D. Maria Clete observed, “Collection of toll fee in Madurai – Tuticorin National Highways is impermissible and the road users are entitled for a good conditioned National Highways and then alone they are liable to pay toll fee as prescribed by the authority concerned.”
Advocate S. Vanchinathan appeared for the Petitioner, while Advocate B. Naveen Kumar represented the Respondents.
Brief Facts
The Petitioner sought a direction to the NHAI authorities to take action against the Respondent No.5 herein, Madurai–Tuticorin Expressway Ltd., for mismanagement of funds allocated for planting saplings along the highway under a Termination Agreement. He also sought remedial steps for planting trees on both sides and the median of NH-38, and further prayed for the suspension of toll collection until the road was restored to a motorable condition.
It was submitted that the Respondent No. 5 had failed to maintain the Madurai–Tuticorin stretch of NH-38 in accordance with the Concession Agreement and that the NHAI had formally terminated the contract for non-compliance with maintenance obligations.
The Petitioner placed reliance on a letter from the Regional Officer, NHAI, which recorded the poor condition of the highway and highlighted repeated defaults by the concessionaire. The relevant portion of the letter reads as:
“Whereas, Concessionaire has flouted its maintenance obligations as stipulated under Clause 18.1 of the Concession Agreement. The maintenance work of highways is being neglected, which has been brought to the notice of the Concessionaire by NHAI/IE through various communications, clearly stating that the highway has become unworthy for travelling. Not only travelling on the Project Highway has become inconvenient, the public using the highway is facing grave risk of life and property while travelling on the Project Highway solely due to the acts and omissions of the Concessionaire. The attention of the Concessionaire has been drawn to the above matter time and again, however, in continuation of its complete disregard to its obligations under the Concession Agreement, the Concessionaire has failed to take any remedial actions. And due to such continued failure of the Concessionaire, the Authority was exposed to severe criticism by the road users, the State Administration and the Authorities.”
The Petitioner contended that despite termination of the contract and acknowledgment of the poor condition of the highway, the NHAI continued to collect tolls from road users travelling on the unsafe and poorly maintained stretch between Madurai and Tuticorin.
Reasoning of the Court
The Court rejected the objection raised by the NHAI that the petitioner lacked privity of contract and that the dispute with the fifth respondent was contractual in nature and subject to arbitration.
The Court observed that such arguments were untenable since the petitioner had approached the Court as a road user and citizen, not as a party to the contract. “The petitioner is a road user and he is paying toll fee whenever he travels from Madurai to Tuticorin or from Tuticorin to Madurai despite the fact that the said highway road is not being maintained as per the standards prescribed under the National Highways Authority of India Act, 1988. Secondly, pendency of arbitration proceedings is not a ground to reject the writ petition, since the National Highways Authority of India is under obligation to maintain the highways properly and thereafter, collect toll fee from the road users”, the Court added.
The Court found that there was no dispute regarding the fact that the road was in a bad condition and that the concessionaire had failed in its obligations, leading to the termination of the agreement, yet, the NHAI had continued to collect tolls.
The Court noted that the right to collect toll is a conditional privilege linked to providing quality infrastructure, stating, “Instead, they are maintaining the highway road in a bad condition. Therefore, collection of toll fee in Madurai – Tuticorin National Highways is impermissible and the road users are entitled for a good conditioned National Highways and then alone they are liable to pay toll fee as prescribed by the authority concerned.”
The Court made a distinction between the contractual dispute between NHAI and the concessionaire and the rights of the public who are directly affected by the road’s condition. The Bench held, “Therefore, collection of toll fee in Madurai – Tuticorin National Highways is impermissible and the road users are entitled for a good conditioned National Highways and then alone they are liable to pay toll fee as prescribed by the authority concerned. Insofar as the dispute between the National Highways Authority of India and the fifth respondent is concerned, it relates to the contractual obligation and it has to be resolved either through the arbitration proceedings or in the manner known to law.”
Consequently, the Court allowed the petition and directed the Respondents not to collect any toll fee from citizens traveling between Madurai and Tuticorin until the highway is relaid or maintained as per the standards prescribed under the National Highways Authority of India Act, 1988.
The Court, however, clarified that upon restoring the road to standard condition, the NHAI would be free to resume toll collection.
Cause Title: V. Balakrishnan v. The General Manager, National Highways Authority of India, Tamil Nadu Division (Neutral Citation: 2025:MHC:1264)
