STATE OF WEST BENGAL versus M.R. MONDAL AND ANR.

Citation: [2001] SUPP. 2 S.C.R. 531 · Decided: 03-09-2001 · Supreme Court of India · Bench: S. RAJENDRA BABU

Judgment (excerpt)

STATE OF WEST BENGAL 
A 
v. 
M.R. MONDAL AND ANR. 
• 
SEPTEMBER 3, 2001 
[S. RAJENDRA BABU AND DORAISWAMY RAJU, JJ.] 
B 
National Highway Authorities of India Act, 1988; 
Highway-Collection of toll charges-For a portion of-Franchise for-
Contractor, being highest bidder, allowed collection for a period of one year C 
only-But he committed defaults in depositing money-Contractor made 
representations to Minister-in-Charge seeking deposit in instalments-However, 
Joint Secretary issued Memorandum granting several concessions and also 
extended the contract for 30 years-Meanwhile, fresh bids invited for period 
subsequent to the one year duration of contract-Contractor filed a suit in D 
which injunction was granted-Subsequently, National Highway Authority of 
India entrusted with portion of the Highway in place of the State-Injunction 
order vacated-In appeal, High Court appointed Advocate-Receiver to 
supervise collection of toll charges-Ultimately, High Court not only stayed 
invitation of fresh bids but also ordered the continuance of the Receiver in 
respect of the possession of the expressway and collection of toll charges- E 
Correctness of-Held: Contract cannot be extended beyond the period of one 
year without the prior approval of Central Government-A franchise or contract 
for collection of toll charges is limited and circumscribed by Fee Collection 
Rules-Awarding and extending of contract cannot be the whim and fancy of 
any authorities-High Court judgment set aside-National Highways (Fees p 
for the use of National Highway Section and Permanent Bridge-Public Funded 
Project) Rules, 1997-Rr. 6 to 9. 
The appellant-State called for tenders for collection of toll charges in 
respect of a portion of the Highway,.Respondent No .I was the highest bidder 
and a contract was entered into for a period of one year between respondent G 
No.I and the appellant But respondent No.I committed defaults right from 
the very inception in depositing the advance bid money as well as the actual 
bid money. However, respondent No. 1 made a representation to the Minister-
in-Charge seeking deposit in instalments. 
531 
'
H 
532 
SUPREME COURT REPORTS [2001] SUPP. 2 S.C.R. 
A 
The Joint Secretary issued a Memorandum granting several concessions 
and also allowed respondent No. I to collect toll charges for a period of 30 
years. Meanwhile, fresh bids were invited for collection of toll charges of for 
the period subsequent to the one-year duration of the contract with respondent 
No.I. 
B 
Respondent No. 1 filed a suit in which temporary injunction was 
granted. However, the Central Government issued a notification under Section 
I I of the National Highways Authority of India Act, I988 entrusting the 
stretch of the Highway in question to the National Highway Authority oflndia 
in place of the appellant-State. In the meanwhile the interim injunction order 
C was vacated. 
In appeal, High Court appointed an Advocate-Receiver to supervise the 
collection of toll charges. The High Court had not only stayed the invitation 
of fresh bids but also ordered the continuance of the Receiver in respect of 
the possession of the expressway and collection of toll charges. Hence this 
D appeal. 
Allowing the appeal, the Court 
HELD: I. The Memorandum issued by the Joint Secretary can, by no 
stretch of imagination, be construed to bring into existence ipso facto an 
E extended period of contract beyond the onf! year period for which alone the 
contract had been given to respondent No. I in this case. An order passed 
but retained in file without being communicated to respondent No.I can have 
no force or authority whatsoever and the same has no valid existence in the 
eye of law or claim to have come into operation and effect. No reliance can 
F 
be placed on the same to even assert a claim based on its contents. If its utility 
depended upon a decision to be taken on the performance ofrespondent No.I 
by the Competent Authority, neither the authority could be compelled to take 
a decision nor any concrete rights could be said to have been acquired by 
respondent No.I, to warrant the grant of the type of directions given in this 
case. The discretionary power to grant injunction, be it of prohibitory or 
G mandatory nature, has been availed ofto bring into existence and force upon 
the State a new contract, which could never have been the intention of the 
State itself. 1541-E-GJ 
2.1. When the National Highways (Fees for the use of National 

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