LPA Nos. 255/2007 & 357/2007 1
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ LETTERS PATENT APPEAL NOS. 255 OF 2007 & 357/2007
% Date of Decision : May 27th , 2009.
COL. T. PRASAD ....Appellant in LPA No. 255/2007.
Through Mr. Sanjiv Sharma, Advocate.
S.S. PANDAY ....Appellant in LPA No. 357/2007.
Through Ms. Rekha Palli, Advocate.
VERSUS
UNION OF INDIA & ORS. .... Respondents.
Through Mr. Neeraj Kishan Kaul, Sr.
Advocate with Mr. Sudhir Sharma, Mr.
Ajit Warrier and Mr. Ritesh Kumar,
Advocates for respondent No. 4.
CORAM:
HON'BLE MR. JUSTICE AJIT PRAKASH SHAH, CHIEF JUSTICE
HON'BLE MR. JUSTICE SANJIV KHANNA
1. Whether Reporters of local papers may be
allowed to see the judgment?
2. To be referred to the Reporter or not ?
3. Whether the judgment should be reported
in the Digest ?
SANJIV KHANNA, J:
1. The appellants, Colonel T. Prasad and Capt. S.S. Panday are
serving Indian Army Officers and have by this intra Court appeal
impugned judgment dated 6th March, 2007 passed by the learned
LPA Nos. 255/2007 & 357/2007 2
single Judge dismissing their writ petitions. The appellants rely upon
Indian Tolls (Army and Air Force) Act, 1901 (hereinafter referred to
as the 1901 Act, for short) and claim exemption from payment of toll
tax and claim right to free access and utilization of Delhi-NOIDA
Direct Flyway (hereinafter referred to as the DND Flyway, for short).
2. DND Flyway has been constructed by M/s NOIDA Toll Bridge
Company Limited pursuant to a concessionaire agreement dated
12th November, 1997 between Noida Toll Bridge Co. Ltd.-
Respondent no. 4 and New Okhla Industrial Development Authority
(NOIDA)- respondent no. 3. The question and the issue involved in
the present case relate to interpretation of both 1901 Act,
Concessionaire Agreement and the New Okhla Industrial
Development Area (Levy of Infrastructure Fee) Regulations, 1998
framed under Uttar Pradesh Industrial Area Development Act, 1976.
3. The relevant provisions of the 1901 Act, which require
interpretation is as under:-
"2. Definitions:
(b) "Carriage" means a vehicle for carriage or
haulage other than one specially constructed
for use on rails;
xxxxx
(i) "Public Authority" means the Central
Government or a State Government or a local
authority; and, so far as regards tolls levied
by a railway company under section 4 of the
Indian Guaranteed Railways Act, 1879 or
LPA Nos. 255/2007 & 357/2007 3
section 51 of the Indian Railways Act, 1890,
includes such a railway company; and
(j) "tolls" includes duties, dues, rates, fees and
charges, but does not include custom duties
levied under the Indian Tariff Act, 1934, octroi
duties or town duties on the import of goods,
or fares paid for the conveyance of
passengers on a tramway.
3. Exemptions from tolls:- The following
persons and property, namely:-
(a) all officers, soldiers and airmen of -
(i) the Regular forces
(ii) any irregular corps,
(b) all members of the Territorial Army or of
the National Cadet Corps when on duty or
when proceeding to or returning from duty.
(c) all officers, soldiers and airmen of the
Indian Reserve Forces when proceeding from
their place of residence on being called out for
service, training or, muster or when
proceeding back to their place of residence
after such service, training or muster,
(d) all authorized followers of -
(i) the Regular Forces
(ii) the Territorial Army or the National
Cadet Corps.
(iii) any Irregular Corps.
(e) all members of the families of officers,
soldiers, airmen or authorized followers of -
(i) the Regular Forces, or
(ii) any Irregular Corps
when accompanying any body of troops, or
any officer, soldier, airmen or authorized
follower thereof on duty or on the march.
(f) all prisoners under military or air force
escort,
LPA Nos. 255/2007 & 357/2007 4
(g) the carriages, horses and baggage, and
the persons (if any) employed in driving the
carriages or in carrying the baggage, of any
persons exempted under any of the foregoing
clauses, when such carriages, horses,
baggage, or persons accompanying the
persons so exempted under the circumstances
mentioned in those clauses respectively.
(h) all carriages and horses belonging to
government or employed in the Indian
military for air force service and all persons in
charge of or accompanying the same, when
conveying any such persons as hereinbefore
in this section mentioned or when conveying
baggage or stores, or when returning,
unladen from conveying such persons,
baggage or stores;
(i) all carriages and horses when moving
under the orders of military or air-force
authority for the purpose of being employed
in the Indian military or air force service;
(j) all animals accompanying any body of
troops which are intended to be slaughtered
for food or kept for any purpose connected
with the provisioning of such troops, and
(k) all persons in charge of any carriage,
horse or animal exempted under any of the
foregoing clauses when accompanying the
same under the circumstances mentioned in
those clauses respectively.
Shall be exempted from payment of any tolls
-
(i) On embarking or disembarking, or on
being shipped or landed, from or upon any
landing-place, or
(ii) in passing along or over any turnpike or
other road or bridge, or
(iii) On being carried by means of any ferry,
Otherwise demandable by virtue of any Act,
Ordinance, Regulation, order or direction of
any legislature or other public authority in
India.
LPA Nos. 255/2007 & 357/2007 5
Provided that nothing in this section shall
exempt any boats, barges or other vessels
employed in conveying the said persons or
property along any canal from payment of
tolls in like manner as other boats, barges and
vessels.
Explanation:- The persons or property
exempted under clause (d), (e), (g) and (j)
shall be deemed to accompany the Forces,
troops, persons or property concerned, when
the move of the former is the direct result of,
or is connected with the move of the latter,
irrespective of the interval of space and time
between the two moves.
6. Compensation: (1) if any owner or
lessee, or any company, railway
administration or local authority claims
compensation for any loss alleged to have
been incurred to the operation of this act, the
claim shall be submitted to the Central
Government.
(2) On receiving any such claim, the central
government shall pass such order thereon as
justice requires, and shall give all necessary
directions for the purpose of ascertaining the
facts of the case and of assessing the
compensation, if any, to be paid.”
(emphasis supplied)
4. The term “public authority” has been defined to mean Central
Government, State Government or Local Authority. Section 6 of the
1901 Act makes it clear that the provisions of the said Act will equally
apply where a toll is imposed by a owner or lessee, any company,
Railway administration or local authority, and in such circumstances,
the said person can claim compensation from the Central
LPA Nos. 255/2007 & 357/2007 6
Government for the loss on account of exemption provided under the
1901 Act from payment of toll tax/fee. The word “toll” has been
broadly defined to include duties, dues, rates, fees, etc. except duties
under the Indian Tariff Act, 1934, octroi duties, town duties on
import of goods or fares paid for the conveyance of passengers on a
tramway.
5. Section 3 of 1901 Act consists of two parts. The first part deals
with the persons, who are exempted in clauses (a) to (f) or entitled
to benefit under the Act. The second part in sub-clauses (g) to (K)
deals with carriages, animals, horses etc and stipulates when they
are exempt from payment of toll tax. In the present case, we are
more concerned with the interpretation of the substantive portion of
Section 3 which exempts payment of tolls on persons mentioned in
clauses (a) to (f) read with carriage, animals etc. mentioned in
clauses (g) to (k). To be precise, we are concerned with the words
“shall be exempted from payment of any tolls otherwise demandable
by virtue of any Act, Ordinance, Regulation, order or direction of any
legislature or any other public authority in India”. The words “by
virtue of”, mean by force of or authority of or because of. Thus the
toll or fee demandable for the purpose of 1901 Act must be because
of, by force or by authority of Act, ordinance, regulation, order or
direction of any legislation or other public authority. Only tolls
LPA Nos. 255/2007 & 357/2007 7
demandable by virtue of any Act, Ordinance etc. as per the said
exemption clause cannot be levied on persons mentioned in clauses
(a) to (f) read with carriages, animals etc. mentioned in clauses (g)
to (k) of Section 3. Tolls not demandable by virtue of any Act,
ordinance, regulation, order or direction of any legislature or public
authority in India are payable by persons mentioned in clauses (a) to
(f) read with Carriages etc mentioned in Clauses (g) to (k). Tolls or
fee charged by a private person from third party who travels through
his land or land over which he has rights are not exempt and can be
charged if the same is not demandable by virtue of any Act,
Ordinance, etc. The legislature in Section 3 has used the words
“otherwise demandable” with reference to Act, Ordinance,
Regulation, order or direction of any legislature or public authority in
India.
6. As per the counsel for the appellants, the word “demandable”
refers only to imposition or levy or charge of fee under any Act,
ordinance, regulation, order or direction. It does not refer to
quantification or computation of fee. The respondent-NOIDA as well
as the respondent no.4 Company had argued to the contrary.
7. We have considered the arguments raised by both sides and
feel that the word “demandable” used in Section 3 of the 1901 Act
refers to both „right to charge a fee or toll‟ as well as quantification
LPA Nos. 255/2007 & 357/2007 8
and computation of the fee or toll. A fee cannot be demanded
without it being computed and calculated. An amount can be
demanded after assessment and not before. Demand can only be
made once a figure has been quantified. An enactment, rule, etc.
may provide for „right to charge a toll‟ as well as how the toll is to be
computed, calculated and then demanded from the person using the
road or the bridge or the conveyance or may only authorise
imposition or a charge but leave the question of quantum and
computation to a contractual agreement. The word “demandable” as
used in Section 3 is applicable when an enactment provides for „right
to charge a fee or toll‟ and provides for computation and calculation
of the toll. It is only when an Act, ordinance, regulation, order or
direction, etc provides for both aspects, that the toll becomes
demandable by virtue of an Act, Ordinance, regulations etc. When
an enactment merely permits imposition of toll but does not deal
with or provide for computation, calculation or quantum of toll and
leaves these questions open to be determined by a contract or any
other manner, it is not an amount “demandable” under Section 3. To
demand an amount, the amount should be quantified and for
purpose of Section 3 of 1901, the amount demanded should be by
virtue of an Act, Ordinance, Regulation, Order or direction.
LPA Nos. 255/2007 & 357/2007 9
8. In A.N. Lakshmana Shenoy Vs. The Income Tax officer,
1958 (34) ITR 275 SC, the Supreme Court was concerned with the
definition of the word “assessment” and it was observed that the said
term is comprehensive enough to include the charging section and
the whole procedure for imposing the tax liability on the tax payer,
which implies two further steps, i.e., determination of taxable income
and then the sum payable by assessee as tax on the computation
made. In National Mineral Development Corporation Limited
versus State of M.P.and Another, (2004) 6 SCC 281, the
Supreme Court was concerned with the question of levy of royalty
and whether it includes merely charge or also the computation
thereof and it was observed as under:-
“23. Section 9 is not the beginning and end of
the levy of royalty. The royalty has to be
quantified for purpose of levy and that cannot
be done unless the provisions of the Second
Schedule are taken into consideration. For the
purpose of levying any charge, not only has
the charge to be authorised by law, it has also
to be computed. The charging provision and
the computation provision may be found at
one place or at two different places depending
on the draftsman‟s art of drafting and
methodology employed. In the latter case, the
charging provision and the computation
provision, though placed in two parts of the
enactment, shall have to be read together as
constituting one integrated provision. The
charging provision and the computation
provision do differ qualitatively. In case of
conflict, the computation provision shall give
way to the charging provision. In case of
doubt or ambiguity the computing provision
shall be so interpreted as to act in aid of
charging provision. If the two can be read
together homogeneously then both shall be
given effect to, more so, when it is clear from
LPA Nos. 255/2007 & 357/2007 10the computation provision that it is meant to
supplement the charging provision and is, on
its own, a substantive provision in the sense
that but for the computation provision the
charging provision alone would not work. The
computing provision cannot be treated as
mere surplusage or of no significance; what
necessarily flows therefrom shall also have to
be given effect to.
24. Applying the abovestated principle, it is
clear that Section 9 neither prescribes the rate
of royalty nor does it lay down how the
royalty shall be computed. The rate of royalty
and its computation methodology are to be
found in the Second Schedule and therefore
the reading of Section 9 which authorises
charging of royalty cannot be complete unless
what is specified in the Second Schedule is
also read as part and parcel of Section 9.”
9. Thus, it is clear that charging Section/provisions may be different
from computation or provisions relating to rate of tax and these can
be part of a single enactment or parts of two separate enactments.
An enactment may only provide a charging section and leave the
computation or calculation portion outside the enactment. Taxing
statutes have a charging section, provisions relating to rate of tax,
provisions for calculation of the amount payable including assessment
and procedure for collection of the amount payable. These provisions
may not necessarily be part of one statute. Levy of tax includes both
the charging section as well as computation and assessment.
10. In Assistant Collector Central Excise, Calcutta versus
National Tabacco Company of India Limited, AIR 1972 SC
2563, the Supreme Court held that the word “levy” is of wide import
and includes imposition of tax as well as assessment. The term
LPA Nos. 255/2007 & 357/2007 11
“imposition” is generally used for the levy of a tax or duty by
legislative provisions indicating subject matter of the tax and the
rates at which taxes are charged. The term “assessment” is
generally used for actual procedure adopted in fixing the liability to
pay tax and determining its amount. The collection of tax is at the
third stage. The term levy it was stated includes both imposition as
well as assessment but does not include collection. Reference was
made to N. B. Sanjana v. Elphinstone Spg. & Wvg. Mills Co.
Ltd. , AIR 1971 SC 2039, wherein it was observed as under:-
“14. We are not inclined to accept the
contention of Dr Syed Mohammad that the
expression “levy” in Rule 10 means actual
collection of some amount. The charging
provisions Section 3(i) specifically says “There
shall be levied and collected in such a manner
as may be prescribed the duty of excise….” It
is to be noted that sub-section (i) used both
the expressions “levied and collected” and
that clearly shows that the expression „levy‟
has not been used in the Act or the Rules as
meaning actual collection.”
11. The said judgment was followed by the Gauhati High Court in
Bishnauth Tea Co. Vs. Supdt Customs & Central Excise 1976
Tax L.R. 1605 and it was observed that terms „levy‟ and „assessment‟
do not extend to collection. Similar view has been taken by a
Division Bench of Madhya Pradesh High Court in Hind Syntex Ltd.
Vs. Union of India & others, 1985 (19) E.L.T. 35 (M.P.), holding
that the term „levy‟ includes both imposition of tax indicating the
LPA Nos. 255/2007 & 357/2007 12
subject matters of the tax and the rates at which the tax is to be
charged. The term “assessment” on the other hand is part of levy
and is generally used for actual procedure adopted for fixing liability
to pay tax or on account of particular good or property. Process of
assessment, determines whether the levy is short or complete.
However, as observed above by the Supreme Court, the levy itself
not only means imposition of tax but also provisions relating to
quantification thereof. Thus the term “demandable” means both
„right to impose‟ or „charge‟ and the rate including the assessment of
the quantum of fee or toll i.e. the quantified amount which is to be
recovered.
12. The second question is whether the toll or fee for using the
DND flyway is demandable by virtue of any Act, Ordinance,
regulation, and/or direction of any legislature or other public
authority.
13. The NOIDA authority has been created under Uttar Pradesh
Industrial Area Development Act, 1976 and is a local authority as
defined in Section 3(31) of the General Clauses Act, 1897 and is
therefore a public authority. Section 11 of the Uttar Pradesh
Industrial Area Development Act, 1976 authorises imposition of
taxes. The said section reads :-
“Section 11 (1) For the purposes of
providing, maintaining or continuing any
LPA Nos. 255/2007 & 357/2007 13amenities in the industrial development area,
the Authority may with the previous approval
of the State Government, levy such taxes as it
may consider necessary in respect of any site
or building on the transferee or occupier
thereof, provided that the total incidence of
such tax shall not exceed twenty five percent
of the annual value of such site or building.
Explanation: In this sub-section, the
expression “annual value” shall have the same
meaning as in Section 174 of the U.P. Nagar
Mahapalika Adhiniyam, 1959.
(2) if the state Government considers it
necessary or expedient in the public interest it
may, by a general or special order, exempt
wholly or partly – any such transferee or
occupier or any such class thereof from the
taxes levied under sub section (1).”
14. Under Section 11 of the said Act, previous approval of the
State Government is required for levy of tax. The aforesaid Section
provides for charging of tax in respect of annual value of a site or
building. The said provision is not applicable. The said Act does not
provide for imposition of any toll tax by an authority under the Act. It
cannot be said that toll tax is collected or is chargeable or levied
under Section 11 of the said Act.
15. Under Section 6 of the Uttar Pradesh Industrial Area
Development Act, 1976, NOIDA Authority is to provide infrastructure
for residential and commercial purposes. NOIDA Authority has
framed the New Okhla Industrial Development Area (Levy of
LPA Nos. 255/2007 & 357/2007 14
Infrastructure Fee) Regulations. The regulations provide and permit
NOIDA Authority to enter into an agreement with third parties for
collection of fee or even develop, construct, maintain and provide
infrastructure and collect fee. Thus, the NOIDA Authority is entitled
to enter into an agreement to collect levy of fees. It can also enter
into agreement with a third party to develop, construct and maintain
infrastructure, which are commonly called built, operate and transfer
projects (BOT projects). In such cases, of the public private
partnership, the developer does retains buildings, infrastructure and
operates to recoup the expenses incurred and earn profit and
thereafter transfers the infrastructure/project after a period to the
Government. The relevant provisions of the said Regulations read as
under:-
“2. Definitions
(e) „Developer‟ means a person who
constructs, develops, maintains or provides an
infrastructure or collects fee therefore in the
area on the basis of an agreement made
before or after the commencement of these
regulations, providing or maintaining or
continuing to provide or maintain any
infrastructure in the New Okhla Industrial
Development Area,
(f) „Fee‟ in relation to an infrastructure means
an amount levied upon or payable by a
person under these regulations for the use of
an infrastructure in the Area,
LPA Nos. 255/2007 & 357/2007 15
3. (a) The authority may either itself or
through a Developer on the basis of an
agreement, develop, construct, provide or
maintain or continue to provide or maintain
an infrastructure in the Area,
(b) In particular, and without prejudice to the
generality of the powers of the Authority in
this behalf the agreement may provide for any
or all of the following matters: –
(i) xxx
(ii) Right and obligations of the parties to the
agreement;
(iii) standards and specifications for the
design, construction and maintenance of an
infrastructure;
(iv) fee to be levied and collected for an
infrastructure in the area;
(v) Process of computing the reasonable
return for the Developer;
(vi) Procedure for surrender, release or
extinguishing of the rights of the Developer or
otherwise the transfer of an infrastructure;
(vii) rights of the lenders of the Developer in
relation to an infrastructure;
(viii) termination of the agreement;
(ix) mechanism for settlement of disputes;
and
(x) any other terms and conditions as may be
agreed upon by the Authority, Developer or
lender of the Developer.
4. (i) Every agreement by and on behalf of
the Authority shall be made and executed by
such officer of the Authority as may be
authorised by the Authority in this regard.
(ii) No agreement made by and on behalf of
the Authority in contravention of the
provisions of sub-regulation (i) shall be
binding on it.
LPA Nos. 255/2007 & 357/2007 16
5(1) For the purpose of providing or
maintaining or continuing to provide or
maintain an infrastructure in the Area either
by itself or through a Developer the Authority
may levy and collect at the rate determined
on the basis of a formula prescribed and
notified by the authority. In case an
infrastructure is developed, constructed or
maintained or provided under an agreement
such formula shall be such as may be
determined and agreed to between the
Authority and the Developer. The formula
prescribed may provide for different rates for
different classes of infrastructure.
(2) The authority shall have the powers to
authorise the developer to collect and
appropriate the fee levied under sub-clause
(1) in accordance with the Agreement.
Developer‟s rights to collect or appropriate the
fee may be assignable to the lenders of the
Developer.
(3) Where the authority authorizes the
Developer to collect and appropriate the Fee
in accordance with sub-regulation (2), the
agreement shall provide for a mechanism for
determination, revision, and publication of the
rate of fee.
(4) xxx
(5) A developer shall maintain and keep such
registers and other records as may be
directed by the Authority.”
(emphasis supplied)
16. The term “developer” includes a person, who constructs,
develops and maintains and provides infrastructure and collect fee on
the basis of agreement before or after commencement of the
LPA Nos. 255/2007 & 357/2007 17regulations. The definition of the term “fee” means amount levied or
payable by a person under the regulations. Further regulation 3 (b)
(iv) states that the fee is to be levied and collected for the
infrastructure in the area. The computation provisions are provided
and regulated by regulation 5. They are the most crucial and
relevant for adjudication of the present dispute. As per Regulation 5,
NOIDA can enter into an agreement to provide or maintain
infrastructure either itself or through a developer and the authority
may levy and collect at the rate determined on the basis of formula
prescribed and notified by the authority. At the same time, it also
permits the authority to develop infrastructure, construct, maintain or
provide infrastructure by entering into an agreement with the
developer and tax can be levied and collected on the basis of formula
as may be determined and agreed between the NOIDA and the
developer. Thus the formula for computation of fee/tax can be
matter of a contract or an agreement between the developer and
NOIDA. The Regulations give sufficient powers and freedom to
NOIDA to enter into agreements with a developer for determining
and agreeing upon the fee/tax to be charged. In such cases, the
quantum of tax/fee which is charged is as per the agreement and not
under the regulation. The agreement between the NOIDA and the
developer determines and mentions the formula and determines the
LPA Nos. 255/2007 & 357/2007 18rate of fee. Sub Clauses (2) and (3) permit the developer to collect
and appropriate the fee, are different and relate to collection. They
are not relevant for the purpose of deciding the present controversy
and interpretation of the word “demandable” used in Section 3 of the
1901 Act.
17. There is a long line of decisions by the Supreme Court which
differentiate between statutory contracts and other contracts. In
India Thermal Power Ltd. vs. State of M.P. (2000) 3 SCC 379
the Supreme Court has observed:
“11. ……………If entering into a contract
containing the prescribed terms and
conditions is a must under the statute then
that contract becomes a statutory contract. If
a contract incorporates certain terms and
conditions in it which are statutory then the
said contract to that extent is statutory. A
contract may contain certain other terms and
conditions which may not be of a statutory
character and which have been incorporated
therein as a result of mutual agreement
between the parties. Therefore, the PPAs can
be regarded as statutory only to the extent
that they contain provisions regarding
determination of tariff and other statutory
requirements of Section 43-A(2). Opening and
maintaining of an escrow account or an
escrow agreement are not the statutory
requirements and, therefore, merely because
PPAs contemplate maintaining escrow
accounts that obligation cannot be regarded
as statutory.”
18. The mutual agreement between NOIDA and the respondent No.
4 Company fixing a formula for computing quantum of tax/fee is not
a statutory contract or a statutory term in a contract. The
Regulations quoted above do not fix or quantify the rate of tax or
LPA Nos. 255/2007 & 357/2007 19
toll. The formula or rate can be subject matter of a mutual
agreement. The formula mentioned in an agreement is therefore not
a statutory term.
19. It is not the case of either party that NOIDA Authority under
the Regulations has framed any formula for charging of fee or toll.
On the other hand, the quantum of fee demandable and chargeable
is mentioned in the concessionaire agreement dated 12th November,
1997. The relevant clauses of the agreement are as under:-
“Section 1.1 Definitions
“Fee” means the amount of money
demanded, charged, collected, retained and
appropriated by the Concessionaire for and on
behalf of NOIDA from the users of the Noida
Bridge as fee for the provision of the Noida
Bridge, in accordance accordance with the
rules prepared by NOIDA under Section 19 of
the Act and the provisions of Article 13 herein.
Section 2.1 Grant of Concession
(a) Xxxxxx
(b) NOIDA further grants to the
Concessionaire the exclusive right and
authority during the Concession Period to in
accordance with terms and conditions of this
Agreement:
(i) Xxxxx
(ii) Xxxxxx
(iii) Xxxxxx
LPA Nos. 255/2007 & 357/2007 20
(iv) determine, demand, collect retain and
appropriate a Fee from the users of the
NOIDA Bridge and apply the same in order to
recover the Total Cost of the Project and the
returns thereon;
Section 3.1 Conditions Precedent
(a) obligations of the concessionaire
hereunder are subject to the satisfaction in
full of the following conditions precedent
unless any such conditions had been waived
by the concessionaire as hereinafter provided:
(i) xxxx
(ii) xxxxx
(iii) xxxxxx
(iv) NOIDA shall have duly formulated
regulations under Section 19 of the Act
enabling the levy of Fee and NOIDA shall
have, thereunder, authorized the
Concessionaire to collect and appropriate the
fee.
Section 13.1 Collection of Fee
(a) The Fee shall be determined by the Fee
Review Committee in accordance with
provisions of this Article 13 except for the
Base Fee Rates which have already been
determined and approved by the Steering
Committee and has been specified in Section
13.2 hereinbelow.
(b) The Fee shall be, collected, retained and
appropriated from the Users of Noida Bridge
by the Concessionaire, commencing on the
Project Commissioning Date.
(c) The Concessionaire may delegate its function
to collect Fee to the O&M Contractor under
the O&M Contract, in accordance with rules
framed by NOIDA under the Act. In such
event the O&M Contractor shall collect the
Fee for and on behalf of the Concessionaire.
LPA Nos. 255/2007 & 357/2007 21
(d) NOIDA and the Concessionaire expressly
recognizes (i) the right of Fee Review
Committee to determine Fee in accordance
with provisions of this Agreement, and the
Rules framed by NOIDA in relation to levy of
fee under the Act (ii) the right of
Concessionaire to, demand, collect, retain and
to appropriate Fee in accordance with the
terms of this Agreement and the rules framed
by NOIDA in relation to levy of Fee under the
Act, (iii) to exercise all rights and remedies
available under law for recovery of the Fee
and (iv) the right of the O&M Contractor to
demand and collect Fee on behalf of the
Concessionaire.
(e) In the event that the Fee is not recoverable
for any reason related to Change in Law or as
a result of any restriction or injunction based
on any process of law, the Concessionaire
shall be entitled to receive compensation from
NOIDA in accordance with Section 18.
Section 13.4 Fee Review Committee
(a) Within 60 days prior to the scheduled
Projected Commissioning Date, the NOIDA
and the Concessionaire shall establish a Fee
Review Committee for the purposes of
determining any revision to the rate of Fee
levied or revision of the formula for calculation
of the Fee Rate submitted by the
Concessionaire under the provisions of Section
13.5. The Fee Review Committee shall
comprise of three persons; NOIDA and the
concessionaire shall each appoint one
representative who shall be duly qualified
Persons having adequate experience in the
field of management, operation and
maintenance of bridges and roads. The third
member shall be duly qualified Person duly
LPA Nos. 255/2007 & 357/2007 22appointed by the representatives appointed
by NOIDA and the Concessionaire,
respectively. In the event of representatives
appointed by NOIDA and the Concessionaire
are unable to agree on the third member,
within a period of 7 days from their
appointment, the Person recommended by
the Lenders shall be appointed as a third
member, provided such person is an Indian
citizen.
(b) The third member shall be Chairman of the
Fee Review Committee. The Fee Review
Committee shall meet upon 7 days notice by
the Chairman, at the request of the
Concessionaire, or at such time intervals as
required by the parties. In the event that any
party is absent from any meeting of Fee
Review Committee or determines not to cast a
vote or in the event of a parity of votes in a
meeting, the Chairman shall have the casting
vote.”
20. On harmonious reading of the aforesaid clauses of the
Concessionaire Agreement, we find merit in the stand taken by the
respondent-NOIDA and the respondent No. 4 company. The
Agreement provides for method of computation or the formula for
charging of fee. There is a detailed procedure in the formula, how
the toll fee is to be computed and then charged, but the computation
and calculation is under the agreement or a non statutory term of the
agreement. Under Section 13(1) of Concessionaire agreement dated
12th November, 1997 the said fee or the formula for computation of
the fee is prescribed and is not based upon any statutory regulation
LPA Nos. 255/2007 & 357/2007 23
or enactment. The toll fee paid is not demandable by virtue of any
Act, Regulation, Ordinance etc. under Section 3 of 1901 Act.
21. In the light of the aforesaid decision of the Supreme Court in
India Thermal Power Ltd. (supra), the Concessionaire Agreement
to the extent it relates to the formula for computation of fee is
contractual and not statutory. Mere fact that the respondent no. 4
company is entitled to retain the fee and appropriate the toll fee does
not make the levy a statutory levy. As held above, the word „levy‟
not only includes right to charge the toll but also the quantum or the
assessment. The Act and the Regulations do not provide for
computation of toll or the assessment of toll. Computation of toll or
assessment of toll is as per the agreement dated 12th November,
1997. It is clarified that in the present case we have not examined
and considered the question of validity of the Concessionaire
Agreement or validity of the New Okhla Industrial Development Area
(Levy of Infrastructure Fee) Regulations, 1998 and whether quantum
or a formula can be validly made subject matter of a contract and
questions relating to validity of delegated legislation. These questions
and issues have not been raised or argued.
The appeals are accordingly dismissed but for different reasons
than those referred to by the learned single Judge. No costs.
(SANJIV KHANNA)
JUDGE
(AJIT PRAKASH SHAH)
CHIEF JUSTICE
MAY 27, 2009.
VKR/P