New Delhi: The Supreme Court last week upheld an interim order of the Kerala High Court, suspending toll on the 65-km Mannuthy–Edappally stretch of National Highway 544. It declined to interfere with the reasoning of the HC that the National Highways Authority of India (NHAI) failed in its statutory obligations, thereby invalidating its right to collect tolls.
Hearing an NHAI challenge to the Kerala HC order, a bench of Chief Justice of India B.R. Gavai and Justice K. Vinod Chandran underscored that statutory rights to collect tolls could not be divorced from the performance of statutory duties.
On 6 August, a Kerala HC division bench of Justices A. Muhamed Mustaque and Harisankar V. Menon had passed the interim order after it found that the NHAI had breached its statutory mandate by allowing unscientific constructions, poor road conditions, and severe traffic jams on the highway. The HC was hearing a PIL by O.J. Janeesh from Thrissur. He had challenged the withdrawal of a district collector’s directive that stopped toll collection temporarily due to the highway’s non-motorable state after roadworks by private contractors.
The HC reasoned that the public obligation to pay tolls is inseparably tied to the NHAI duty to provide safe, motorable, and unobstructed highways; since that duty remained unfulfilled, toll could not be collected. The landmark ruling came amid public grievances over long queues and difficulties in driving on the highway.
This week, in the SC, the NHAI challenged the HC interim order through a Special Leave Petition, contending that toll suspension will result in significant revenue losses and amounted to judicial overreach into matters reserved for the central government.
However, the SC said, “We cannot but agree with the reasoning of the high court that: The obligation of the public to pay a user fee under statutory provisions is premised on the assurance that their use of the road will be free from hindrances.”
“When the public is legally bound to pay a user fee, they simultaneously acquire a corresponding right to demand unhindered, safe, and regulated access to the road. Any failure on the part of the National Highways Authority or its agents to ensure such access constitutes a breach of the public’s legitimate expectations and undermines the very basis of the toll regime,” it concluded.
What the laws say
The National Highways Act, 1956, is the foundational law, empowering the Centre to levy toll fees for services or benefits rendered in relation to the use of national highways, under Section 7. The power is not unlimited, but tied to the delivery of services, or road users are obliged to pay only when they receive the promised benefits of a well-maintained highway.
Section 8A of the Act further provides for the Centre to notify and regulate fee collection, ensuring the process is transparent and legally sanctioned. Section 16 imposes a statutory duty on NHAI to develop and maintain highways—not a discretionary power but a binding obligation, with the law clearly placing the onus on the authority to ensure motorable, safe, and accessible roads at all times.
The National Highways Authority of India Act, 1988, established the NHAI as a statutory body, entrusted with executing highway projects and then ensuring their upkeep. The Act reflects a parliamentary intent: the NHAI will not merely serve as a contractor or implementing agency but also a custodian of public trust, responsible for balancing infrastructure development with user safety.
The operational details of toll collection are laid out in the National Highways Fee (Determination of Rates and Collection) Rules, 2008. Rule 3 authorises the Centre to levy fees for the use of highways on the premise that the highway remains in a usable state, as the service and the fees are quid pro quo. Rule 5 provides for the revision of the toll rates in line with inflation and maintenance costs. Rule 6 governs the mechanics of fee collection.
Collectively, these rules make it clear that toll collection is a statutory entitlement, contingent upon the NHAI delivering the basic service of functional highways.
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How NHAI breached rules
The Kerala HC held that the NHAI failed to meet the conditions required under the National Highways Act and the Fee Rules, thereby invalidating its right to collect tolls, and that the breach occurred at multiple levels of the statutory framework.
First, under Section 7 of the National Highways Act and Rule 3 of the 2008 fee Rules, tolls can only be levied as compensation for services rendered. The HC said the public obligation to pay tolls remains bound with the public expectation that they will receive smooth and unhindered passage in exchange for payment, but once that trust gets broken, the right to collect tolls collapses. The HC found the NHAI failed to provide proper road conditions, meaning that the very preconditions for toll collection remained unfulfilled.
Second, Section 16 of the National Highways Act imposes a duty on NHAI to develop and maintain highways. In the present case, the HC observed that the Mannuthy–Edappally stretch was plagued by unscientific constructions, waterlogging, and chronic traffic snarls, sometimes causing hours-long delays. That, the judges concluded, demonstrated “total neglect on the part of NHAI” in discharging its statutory responsibility.
The NHAI also failed to introduce managerial protocols or interim traffic management solutions to mitigate disruptions during construction works. The HC observed NHAI “failed to account for the hindrance to traffic flow and the inconvenience caused to commuters as a result of the construction activity”, showing “no effort to evolve managerial protocols or interim traffic management solutions to mitigate the disruption”. The HC noted a “total apathy” displayed by the NHAI “in addressing the grievances raised, despite multiple opportunities having been made available to them at least from February 2025 onwards”.
Third, the HC connected the statutory mandate to the constitutional right to life under Article 21. Safe and motorable roads, it reiterated, are integral to the right to life. By presiding over hazardous and non-motorable road conditions, NHAI effectively violated Article 21, showing how a statutory breach can escalate into a constitutional violation.
Lastly, the HC noted a fundamental disconnect between traffic disruption and toll collection. The highway’s poor state resulted from unscientific work by NHAI’s contractors, along with the failures of the concessionaires, to maintain the service roads, and yet, NHAI continued to collect tolls. The disjunction between the source of disruption and the rationale behind toll collection, the HC said, struck at the fairness and legitimacy of the toll regime.
In essence, the HC decision indicated that NHAI breached its statutory mandate by failing to provide the promised service of unobstructed and safe highways, thereby undermining the public trust that is the basis for toll collection.
The Kerala HC decision—now affirmed by the Supreme Court—clarifies that toll collection is not an unconditional revenue right but a statutory entitlement linked to performance.
The failure to maintain roads under Section 16 of the National Highways Act, the failure to justify toll under Section 7 and Rule 3 of the 2008 Rules, and the disregard of accountability principles are among the NHAI’s breaches, rendering its toll collection unjust.
The SC’s refusal to provide interim relief to the NHAI signals judicial recognition that any failure to provide good highways amounts not only to a breach of statutory mandate but also to a violation of citizens’ fundamental rights.
(Edited by Madhurita Goswami)