2019 (11) TMI 1776 - HC - Indian Laws

Seeking declaration that in the guise of section 113 (2) (g) of the Delhi Municipal Corporation Act, 1957 the petitioner cannot be compelled to pay to the respondent no. l more than the actual amount collected towards toll tax from commercial vehicles entering the NCT, Delhi - payment of amount by the petitioner to the respondent no. l in excess of the toll tax actually collected by the petitioner - re-determination of annual/ weekly amount payable by the petitioner to the SDMC towards toll tax - suitable downward revision in the weekly/ annual remittance commensurate with the reduction in toll tax paying commercial vehicles - HELD THAT - It would be in the interest of justice that before the respondent enforces their demand as now claimed by demand dated 18.11.2019, first they should give a hearing to the petitioner and thereafter taking into account the submissions of the petitioner pass an appropriate reasoned order. Given the terms of the contract as noted above i.e. Clause 16 and the legal position regarding compliance of the principles of natural justice, it is appropriate that the respondent give a proper hearing to the petitioner and thereafter pass a reasoned order - Present writ petition would be treated as a representation of the petitioner to the Commissioner, SDMC. Petition disposed off.

Issues Involved:
1. Compulsion to pay more than actual toll tax collected.
2. Validity of the Toll Tax & ECC Agreement under Section 113(2)(g) of the Delhi Municipal Corporation Act, 1957.
3. Reassessment and re-determination of the payable amount due to changed circumstances.
4. Revision of the remittance amount due to reduction in toll tax paying vehicles.
5. Quashing of the demand notice dated 18.11.2019.
6. Quashing of the penalty demand in the demand letter dated 18.11.2019.
7. Provision of a dispute resolution mechanism.

Issue-wise Detailed Analysis:

1. Compulsion to Pay More than Actual Toll Tax Collected:
The petitioner contended that under Section 113(2)(g) of the Delhi Municipal Corporation Act, 1957, they should not be compelled to pay more than the actual toll tax collected from commercial vehicles entering Delhi. They argued that the opening of the Eastern and Western Peripheral Expressways reduced the traffic entering Delhi, thus reducing the toll tax collected. The court acknowledged the petitioner’s grievance regarding the reduced traffic and the consequent reduction in toll tax collection.

2. Validity of the Toll Tax & ECC Agreement:
The petitioner sought a declaration that the Toll Tax & ECC Agreement was ultra vires Section 113(2)(g) of the Delhi Municipal Corporation Act, 1957, to the extent it required payment exceeding the toll tax collected. The court did not directly address the validity of the agreement but focused on the dispute resolution mechanism provided within the agreement.

3. Reassessment and Re-determination of Payable Amount:
The petitioner requested a fresh assessment considering the changed circumstances affecting toll collection. The court directed that before enforcing the demand, the respondent should give a hearing to the petitioner and pass a reasoned order, considering the petitioner’s submissions.

4. Revision of Remittance Amount:
The petitioner argued for a downward revision in the weekly/annual remittance due to the reduction in toll tax paying vehicles and tax leakages. The court acknowledged this issue and directed the respondent to reassess the situation after giving the petitioner a hearing.

5. Quashing of the Demand Notice Dated 18.11.2019:
The petitioner sought quashing of the demand notice for Rs. 450.69 crores. The court kept the demand notice in abeyance, subject to the outcome of the hearing and the reasoned order by the Commissioner or his nominee.

6. Quashing of the Penalty Demand:
The petitioner challenged the penalty demand of 0.1% per day (36.5% per annum) as inequitable. The court did not specifically address the penalty issue but implied that the reasoned order after the hearing should consider all aspects, including penalties.

7. Provision of a Dispute Resolution Mechanism:
The petitioner requested a suitable mechanism for dispute resolution, as the existing contractual mechanism had become unworkable. The court referred to Clause 16 of the agreement, which provided a dispute resolution process involving a competent officer and the Commissioner, SDMC. The court directed that this mechanism be followed, and a reasoned order be passed after a hearing.

Conclusion:
The court directed that the petitioner’s writ petition be treated as a representation to the Commissioner, SDMC. The Commissioner or his nominee should give a hearing to the petitioner within four weeks and pass a reasoned order within two months. The petitioner was to continue paying Rs. 20 crores per week, and the demand notice dated 18.11.2019 was kept in abeyance pending the reasoned order. The court emphasized compliance with principles of natural justice and allowed the petitioner to challenge the order if dissatisfied. The order was passed without prejudice to the rights and contentions of the parties.

← Previous Next →