STATE OF U.P. AND ORS. versus DEVI DAYAL SINGH ETC

Citation: [2000] 1 S.C.R. 1205 · Decided: 25-02-2000 · Supreme Court of India · Bench: S.P. BHARUCHA · Disposal: Disposed off

Judgment (excerpt)

STATE OF U.P. AND ORS. 
A 
v. 
DEVI DAYAL SINGH ETC. 
FEBRUARY 25, 2000 
[S.P. BHARUCHA, S.N. PHUKAN AND MRS. RUMA PAL, JJ.) 
B 
Indian Tolls Act, 1851 : 
Sections 2 and &-State's power to levy toll-Bridge constructed in 
1968-69-Notification issued. in 1976 empowered State Government to levy C 
toll till actual constrnction cost is realised or for 50 years whichever is 
earlier-Right to collect toll leased out in 1985-Writ Petition filed before High 
Court challenging State's right to recover by way of toll any amount apart from 
construction cost-High Court held, toll could not be levied as constrnction 
cost already recovered-On appeal Held, rate of toll must bear relationship 
to public benefit provided-Actual construction cost, interest on such actual D 
expenditure and cost of maintenance can only be recovered-Stationery cost 
(unless incumd in realisation of toll), interest on stationery cost and main-
tenance and interest on interest payable on account of expenditure on con-
struction not to be recovered by way of toll. 
·constitution of India-Schedule VII-List II, Entry 59-Levy of 
tolf-Cost of constrnction including interest fully recoverable-No difference 
between State's expenditure and amount borrowed from a financial institu-
tion-Interest chargeable only on balance of borrowed amount left un-
paid-Article 246. 
State of U.P. levied toll under Section 2 of the Indian Tolls Act, 1851 
E 
F 
on a bridge constructed in 1968-69. The State Government issued a 
Notification in 1976 for levy of toll till the actual cost of construction, 
including interest on the total expenditure on the bridge, expenditure in 
realisation of toll and on maintenance, were realised in full or for a period G 
of 50 years from the date of first levy of toll, whichever was earlier. In 1985, 
the right to collect toll was leased out to one of the appellants. 
A writ petition was filed before the High Court challenging the 
State's right to recover, by way of toll, any amount apart from the actual 
cost of construction. The High Court allowed the writ petition holding that H 
1205 
1206 
SUPREME COURT REPORTS 
[2000] 1 S.C.R. 
A 
the State was not entitled to realise interest on the construction amount 
by way of toll as it had not been borrowed from any financial institution 
and the original cost of construction had already been recovered. A review 
application filed by the appellant-lessee was dismissed later on. Hence 
these appeals. 
B 
Disposing of the appeals, this Court 
c 
HELD : 1. The public benefit envisaged under Section 2 of the Tolls 
Act, 1851 is the making or repairing of any road or bridge at the expense 
of the State Government. For the advantage obtained by the public by the 
construction of the roads and bridges, the State Government is entitled to 
re-imburse itself for providing the service. However, there must be a 
corresponding benefit for a valid imposition of toll. Having regard to the 
compensatory nature of the levy, however, the rate of toll must bear a 
reasonable relationship to the providing of the benefit. The tolls collected 
are part of the public revenue and may be absorbed in the general revenue 
D 
of the State, nevertheless by definition a toll cannot be used for otherwise 
augmenting the State's revenue. [1210-B-D] 
E 
F 
Kamaljeet Singh & Ors. v. Municipal Board, Pilakwa, AIR (1987) SC 
56, relied on. 
Hindustan Vanaspati Manufacturing Co. Ltd. v. Municipal Board, 
Gaziabad & Others, AIR (1962) All. 25 (SB); Maheshwari Singh v. State of 
Bihar and Others, AIR (1966) Pat. 462 (DB) and Mohammed Ibrahim v. 
State of U.P., AIR (1967) All. 24, approved. 
Hamme/ton v. Earl of Dysart, (1916-18) A.C. 57-58 and Brecon 
Markets Co. v. Neath & Brecon Rly. Co., (1872) 7 CP 555, referred to. 
2. An interpretation of the relevant paragraph of the 1976 notifica-
tion makes it clear that the intention to levy toll is to financially self-liq· 
uidate the construction and upkeep of bridges and roads. It allows toll to 
G be collected only for a specified period viz. 50 years from the date of first 
levy or until the total cost of its construction is realised, whichever is 
earlier. The State Government has, under cover of the Notification, levied 
toll to recover not only the actual cost of construction but also the 
expenditure on account of stationery maintenance, interest on the cost of 
H construction, stationery expenditure and maintenance as well as interest 
STATEv. D.D.SINGH 
1207 
on the balance rem

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