The Supreme Court dismissed NHAI’s appeal against the Kerala High Court order suspending toll collection at Paliyekkara, stressing that citizens cannot be charged for bad roads. The court said toll is a public trust and must match proper road maintenance.
New Delhi: On August 19, the Supreme Court of India delivered an important decision in the Paliyekkara toll plaza case, giving a setback to the National Highways Authority of India (NHAI). The top court dismissed the appeal filed by NHAI against the Kerala High Court order that had stopped toll collection at the Paliyekkara toll plaza for four weeks.
A bench of Chief Justice B.R. Gavai, Justice K. Vinod Chandran and Justice N.V. Anjaria heard the petition. The court made it clear that it will not interfere with the Kerala High Court’s order, which had suspended toll collection.
The bench also strongly observed that
“citizens should not have to pay more money to travel through potholes.”
During the hearing, the Supreme Court also directed the Kerala High Court to continue supervising the steps being taken to reduce traffic congestion at the toll plaza.
This case arose after the Kerala High Court, on 6 August, ordered a four-week suspension of toll collection at Paliyekkara.
The High Court passed the order when NHAI once again asked for more time to solve the long-standing issue of heavy traffic jams on the Edappally–Mannuthi stretch of the National Highway.
The Supreme Court bench had earlier expressed sharp criticism against both NHAI and the private toll company handling the plaza. Chief Justice B.R. Gavai had openly questioned the practice of collecting toll from the public when the roads remain in poor condition.
He had remarked,
“why people are paying toll for a bad road.”
The Kerala High Court, while suspending the toll earlier this month, had explained that toll charges cannot be forced on the public if the roads are not properly maintained and if commuters face huge traffic congestion.
The High Court clearly noted:
“It is to be remembered that the public is obliged to pay the user fees at the toll for using the highway. It casts responsibility on the National Highways Authority to ensure smooth traffic without any barrier created by the NHAI or by its agents, who are the concessionaires. This relationship between the Public and the NHAI is bound by the tie of public trust. The moment it is breached or violated, the right to collect toll fees from the public created through statutory provisions cannot be forced on the public.”
This judgment is significant because it reinforces the principle that toll charges are justified only when highways are in good condition and provide smooth passage.
The Bench observed that people should not be made to pay twice for bad roads when they are already paying motor vehicle tax.
The Court stated:
“In the meanwhile, let the citizens be free to move on the roads, for use of which they have already paid taxes, without further payment to navigate the gutters and pot-holes, symbols of inefficiency.”
The judges took a critical view of the Build-Operate-Transfer (BOT) model under which private concessionaires collect tolls for road usage.
The Court noted that such arrangements often result in overzealous toll collection, poor upkeep of roads, serious inconvenience to commuters, and negative effects on the environment.
The Bench remarked:
“That, in a democracy, roads are laid on Build Operate and Transfer (BOT) contracts to ensure that the cost is collected from the users, when motor vehicle tax is remitted for their use on roads, is a sad reflection of free market. That, the successful bidder extracts much more than what is spent on construction and maintenance, is a comedy of errors. That, the roads fall into disrepair due to vagaries of nature and often rank neglect, is the stark reality. That, the toll collectors at the booths, often due to understaffing and overwork, behave like satraps, is a fact of life. That, the poor citizen is bound to wait for hours, in queue and in a cramped space, with the engine running but hardly moving, is a tragedy. That, the toll is really on the purse and the patience of the citizen, as also the environment, is the downside.”
The Court repeated its concern by stating again:
“That, in a democracy, roads are laid on Build Operate and Transfer (BOT) contracts to ensure that the cost is collected from the users, when motor vehicle tax is remitted for their use on roads, is a sad reflection of free market.”
Solicitor General Tushar Mehta, appearing on behalf of the National Highways Authority of India (NHAI), informed the Court that repair and maintenance work was being carried out.
The Court then clarified that once traffic movement becomes smooth, the NHAI or the concerned concessionaire could approach it to lift the order halting toll collection, even before the four-week period fixed by the Kerala High Court comes to an end.
The Bench repeated its earlier direction for the benefit of citizens, saying:
“Let the citizens be free to move on the roads, for use of which they have already paid taxes, without further payment to navigate the gutters and pot-holes.”
The dispute began after the Kerala High Court had restrained toll collection and held that any loss suffered by the private concessionaire could be claimed from NHAI in an appropriate manner.
However, the NHAI argued before the Supreme Court that it could not be held automatically liable, and the concessionaire also contended that it was not responsible for the traffic chaos as the repair of certain black spots had been given to a different contractor by the NHAI.
On this, the Supreme Court clarified that the High Court’s statement was not a finding of absolute liability against NHAI. The Bench made it clear:
“If any damages are claimed, it would definitely depend upon the causation of the blockage and congestion, leading to the impasse and the issue could be agitated before the appropriate forum and for determination of the same, the rival contentions of the parties would be left open.”
Accordingly, the Supreme Court dismissed the appeal, and also directed the Kerala High Court to implead the other contractor in the case so that responsibility can be properly determined.
In this hearing, Solicitor General Tushar Mehta appeared for the NHAI, Senior Advocate Shyam Divan represented the concessionaire, and Senior Advocate Jayanth Muthuraj appeared for the original petitioners.
Background
The Supreme Court agreed to hear a petition challenging the Kerala High Court’s decision to stop toll collection at the Paliyekkara toll plaza on National Highway 544 in Thrissur district.
The Kerala High Court had earlier ordered the suspension for four weeks after observing that the Edapally–Mannuthy stretch of the highway was in very poor condition, causing heavy traffic jams and delays in repair work.
The petitioner’s lawyer argued that the High Court’s order is causing a significant financial loss of Rs 50 lakh every day. He stated that the suspension was based on “alleged non-compliance with statutory requirements,” but insisted that halting toll collection is unfair and harming the project financially.
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The Kerala High Court clarified,
“toll fees cannot be demanded from commuters when the highway access is compromised due to bad road conditions and resulting traffic snarls.”
It also emphasized,
“the public’s obligation to pay toll fees hinges on the National Highways Authority of India (NHAI) ensuring smooth and unhindered traffic flow.”
The court further stated,
“the relationship between the public and NHAI is grounded in public trust, and when this trust is violated, the statutory right to collect tolls cannot be enforced on the public.”
Technology & Modern Solutions in Toll Collection
One of the biggest concerns highlighted by the Supreme Court in the Paliyekkara case is the burden on ordinary citizens who are forced to wait in long queues, waste fuel, and suffer due to poor toll management. In recent years, technology has been introduced in India to address exactly these problems.
The most notable step has been the introduction of FASTag, a system based on Radio Frequency Identification (RFID) that allows automatic toll payments directly from linked bank accounts. Vehicles with FASTag can move through toll plazas without stopping, reducing congestion and fuel consumption.
The government made FASTag mandatory for all vehicles from February 2021, with the aim of creating a fully cashless toll system.
However, despite its success, FASTag has not completely eliminated delays. Many toll plazas still suffer from long queues due to:
- Technical glitches and poor internet connectivity,
- Vehicles without FASTag still using cash lanes,
- Insufficient staffing to manage exceptions and disputes,
- Lack of uniform enforcement across states.
Globally, tolling technology has moved far ahead. Countries like Singapore, Japan, and parts of Europe use automated gantry systems and congestion pricing, where vehicles are charged dynamically based on time, traffic, and environmental impact.
For example, Singapore’s Electronic Road Pricing (ERP) system automatically deducts charges as cars pass under overhead gantries, with no need for toll booths or manual intervention.
In India, experts have suggested moving towards a GPS-based tolling system, where vehicles are charged based on the distance travelled on highways rather than crossing fixed toll plazas. This system, already tested in countries like Germany, ensures fairer payment as users pay only for the exact stretch of road used.
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The Union Ministry of Road Transport and Highways has also announced pilot projects for GPS-based tolling, which may eventually replace physical toll booths altogether.
Another modern solution is the use of AI-driven traffic monitoring and IoT-enabled sensors at toll plazas. These can help monitor congestion in real time, detect black spots, and alert authorities for quick repairs—ensuring accountability that concessionaires cannot ignore.
By adopting such modern technologies, India can not only reduce citizen inconvenience but also ensure transparency in toll revenue collection, minimize corruption, and reduce the environmental damage caused by idling vehicles.
CASE TITLE:
NATIONAL HIGHWAY AUTHORITY OF INDIA AND ANR. vs O.J JANEESH AND OR
SLP(C) No. 22579/2025
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