Case Note & Summary
The dispute arose from a concession agreement for widening and maintaining an arterial highway from Mumbai to Panvel, awarded to M/s Sion Panvel Tollways Pvt. Ltd. on a Build-Operate-Transfer basis. The petitioner company was to collect toll for a period of 17 years and 5 months. After completion of construction, the State issued a notification on 3 January 2015 allowing toll collection until 30 June 2015. Subsequently, on 26 May 2015 and 30 June 2015, the State issued notifications exempting light motor vehicles, buses of the Maharashtra State Road Transport Corporation, vehicles from Taloja MIDC, and school buses from paying toll. The petitioner challenged these exemptions, contending that they were arbitrary, caused a daily revenue loss of approximately Rs. 45 lakhs, and were in deviation from the toll structure prescribed in Schedule F of the concession agreement. The petitioner also claimed that the exemptions prevented recovery of its capital outlay of Rs. 1,299.17 crores. The court heard arguments on the validity of the notifications under Section 20(1E) of the Bombay Motor Vehicles Tax Act, 1958 and Article 226 of the Constitution. The excerpt of the judgment does not contain the court’s analysis or final decision on the challenge.
Headnote
A) Toll Law - Exemption of Vehicle Classes - Section 20(1E) of Bombay Motor Vehicles Tax Act, 1958 - Concession Agreement - Petitioners contended that the exemption notifications dated 26-05-2015 and 30-06-2015 were arbitrary, caused daily loss of Rs. 45 lakhs, and deviated from the format notification in Schedule F, thereby preventing recovery of capital outlay. The court's decision on the validity of these notifications is not mentioned in the provided judgment excerpt (Paras 5-10).
Issue of Consideration
Whether the notifications dated 26 May 2015 and 30 June 2015 exempting certain categories of vehicles from toll payment are arbitrary, unreasonable, and in violation of the terms of the concession agreement and Section 20(1E) of the Bombay Motor Vehicles Tax Act, 1958.
Law Points
- Validity of notification under Section 20(1E) of Bombay Motor Vehicles Tax Act
- 1958
- Arbitrary and unreasonable exemption
- Obligations under concession agreement
- Regulatory power of state to exempt vehicle classes
- Impact on capital outlay recovery
Case Details
2015 LawText (BOM) (09) 37
Writ Petition No. 5764 of 2015 with Civil Application No. 1782 of 2015, Civil Application No. 1783 of 2015, Civil Application No. 2320 of 2015, Civil Application ST No. 20760 of 2015, Civil Application ST No. 20758 of 2015, Civil Application ST No. 20761 of 2015 and Writ Petition No. 6577 of 2015 with Public Interest Litigation No. 239 of 2013
Mohit S. Shah, C.J. and A.K. Menon, J.
Mr. Milind Sathe, Senior Advocate for petitioner; Mr. Vineet B. Naik, Senior Advocate for respondent State; Mr. A.Y. Sakhare, Senior Advocate for respondent State in PIL
M/s Sion Panvel Tollways Pvt. Ltd.
State of Maharashtra & Ors.
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Nature of Litigation
The litigation involves challenge to government notifications exempting certain categories of vehicles from paying toll on the Sion Panvel highway, allegedly in breach of the concession agreement.
Remedy Sought
Petitioners seek to quash notifications dated 26-05-2015 and 30-06-2015 and to direct the State to allow toll collection from all vehicles except those originally exempted under the concession agreement.
Filing Reason
The State issued exemptions for light motor vehicles, MSRTC buses, Taloja MIDC vehicles, and school buses, causing daily revenue loss of approximately Rs. 45 lakhs, according to petitioners.
Previous Decisions
Earlier, the High Court directed the State to issue toll notification, which was done on 03-01-2015. Petitioners filed a Special Leave Petition which was disposed of granting liberty to approach High Court for modification.
Issues
Whether the impugned notifications are arbitrary and in violation of Section 20(1E) of the Bombay Motor Vehicles Tax Act, 1958 and the terms of the concession agreement.
Whether the State can unilaterally grant exemptions beyond those contemplated in the concession agreement.
Whether the exemptions cause such financial loss that they render the project unviable and frustrate the concessionaire's right to recover capital outlay.
Submissions/Arguments
Notifications dated 26-05-2015 and 30-06-2015 are arbitrary and unreasonable, deviating from Schedule F of the concession agreement.
Exemptions cause a daily loss of approximately Rs. 45 lakhs.
State should be directed to issue appropriate notifications to allow toll collection from all vehicles except the originally exempted categories.
Judgment Excerpts
The project was awarded on a Built, Operate and Transfer basis (BOT).
The petitioners entered into a concession agreement with respondent no.1 on 19 January 2011 after a competitive bidding process.
On 26 May 2015 a further notification ... came to be issued whereby the respondent in exercise of powers conferred by subsection 1(E) of section 20 of the Maharashtra Motor Vehicles Tax Act exempted light motor vehicles and buses of MSRTC from payment of toll w.e.f 1 June 2015.
The Notification issued by State Government dated 26th May 2015 and 30th June 2015, exempting a class of vehicles from payment of toll in deviation from the format Notification appended in Schedule 'F' to the Concession Agreement, is liable to be set aside and quashed as arbitrary and unreasonable.
the petitioners claim to have taken term loans of an amount of Rs.1299.17 crores
Procedural History
Petitioners were awarded BOT contract in 2010; concession agreement signed on 19-01-2011. Delays in toll notification led to earlier writ petition; High Court directed notification on 23-12-2014. Notification issued on 03-01-2015 allowing toll till 30-06-2015. On 26-05-2015, State issued notification exempting light motor vehicles and MSRTC buses from 01-06-2015. Petitioners filed WP 6577/2015 on 30-05-2015; interim stay refused. Filed SLP which was disposed on 03-06-2015 granting liberty to approach High Court. Another notification on 30-06-2015 extended exemptions. Present petitions challenge these notifications. PIL No.239/2013 also heard alongwith.
Acts & Sections
- Bombay Motor Vehicles Tax Act, 1958: Section 20(1E)
- Constitution of India: Article 226
