The Toll Of Judicial Overreach: How Supreme Court’s Toll Order Hurts India's Infra Model

On 20 August, the Supreme Court upheld a Kerala High Court order suspending toll collection at the Paliyekkara plaza in Thrissur district. Endorsing the High Court’s 6 August order, the Apex 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”.

This judgment has been heralded as a win for the common person. The idea that citizens should not pay on highways for "navigating gutters and potholes" is, pardon the pun, on the surface a valid one. But beneath this feel-good narrative lies a dangerous precedent that could derail India's infrastructure ambitions, a move that demands we scrutinise not just the NHAI's actions, but the judiciary's as well.

The judgment is not just about a single stretch of road in Kerala. Rather, it is a foundational tremor that could destabilise the entire Public-Private Partnership (PPP) model. The Build-Operate-Transfer (BOT) framework, the engine of India's highway expansion, is built on a simple premise: private entities invest millions, build the roads, and recoup their investment through a predictable, long-term revenue stream, the toll. The Supreme Court's ruling shatters this predictability by granting itself the power to suspend tolls, inserting a new, unquantifiable risk into the equation.

This sends a chilling message to every potential investor. Why would a private entity pour millions into a project if a court can unilaterally halt their revenue stream based on "temporary inconveniences"? The court's suggestion that the concessionaire can seek compensation from NHAI or an extension of the contract is a simplistic fix to a complex problem, moving the risk from a private party to a government body and muddling the clear lines of contractual liability.

Judicial Overreach: Bypassing Established Norms

The Court's decision to interfere so directly is a classic case of judicial overreach. While its intent to protect citizens is commendable, it has effectively usurped the role of the executive and intruded on a domain governed by complex, multi-party contracts.

The NHAI and the concessionaire have a legally binding agreement that outlines how to handle disputes, including issues of maintenance and project delays. There are already mechanisms for penalties, fines, and arbitration. The Kerala High Court, by bypassing these established channels and issuing a blanket suspension, set the stage for this national-level problem. The Supreme Court's decision to uphold it, despite acknowledging the issue of temporary hardship, validates this judicial shortcut.

Furthermore, the NHAI's argument that traffic congestion was limited to a few "black spots" where essential work was underway was both reasonable and grounded in reality. Infrastructure projects are inherently disruptive. They are a necessary evil for long-term progress. The Supreme Court's stance effectively creates a new, incredibly low bar for legal action. If a road is not perfect at all times, the toll is invalid.

This opens the floodgates for similar litigation across the country, turning every monsoon-induced pothole or construction-related bottleneck into a potential legal challenge.

The final irony of this judgment is that it could lead to the very conditions it sought to rectify. Toll revenue is the lifeblood of these projects, funding not just initial construction but also ongoing maintenance. If these revenue streams are constantly at risk of being suspended, what incentive does a concessionaire have to invest in costly maintenance? They might cut corners, defer essential repairs, and paradoxically worsen the very road conditions that triggered the legal action in the first place.

Undermining the Separation of Powers and the Economy

This case is not an isolated incident. The judiciary, with its recent interventions, appears to be charting a course that is at odds with the government's sustained efforts to improve the country's business environment and promote ease of doing business (EoDB).

These judgments, by prioritising a narrow interpretation of legal principles over commercial pragmatism, send a worrying signal to both domestic and international investors.

Over time, the judiciary has increasingly involved itself with the economic policies and business environment of India. While the legislature may design laws that permit judicial review, this does not mean the judiciary must micro-manage policymaking. The Constitution provides for a separation of powers, and a judicious use of authority is essential for maintaining this balance.

The judiciary's role is to interpret the law, not to substitute its own judgment for that of the executive or to micro-manage economic and contractual matters. By repeatedly getting involved in areas of policy and commercial viability, courts risk creating an unpredictable legal landscape.

This can undermine investor confidence and disrupt the government's efforts to promote a stable and attractive business ecosystem, a task that falls squarely within the domain of the executive and legislative branches.

Even in the NHAI case, the core of the problem lies in the principle of separation of powers. Under the National Highways Act, 1956, the power to regulate, and by extension, suspend toll collection, lies with the Central Government. The concessionaire's accountability for road maintenance is a matter governed by its contract with the NHAI.

By ordering a toll suspension, the court has taken on an administrative function that is statutorily not within its purview. The judiciary can direct the government to enforce its own rules and hold concessionaires accountable, but it cannot and should not become a substitute for the executive body by directly issuing administrative orders.

A Crisis of Confidence: The Erosion of Trust

The recurring tension between judicial activism and economic policy is creating a significant trust deficit and injecting an element of uncertainty that could deter future investment.

Businesses now have to contend not only with regulatory complexity but also with the unpredictable risk of judicial intervention, which can invalidate years of planning and investment. This repeated interference creates a palpable sense of uncertainty, leaving business owners to question whether the government's reforms and promises are truly reliable if they can be overturned by a court order.

Ultimately, while the judiciary's role is to act as a check on executive power and protect citizens' rights, its intervention here has gone a step too far. It has failed to strike a proper balance between public welfare and the practicalities of a functional, investor-driven infrastructure model.

The result is a perilous precedent that jeopardises not just a few kilometres of highway, but the entire framework for building a modern, connected India. Without a clear and predictable legal environment, the ambitious dream of a world-class infrastructure network may remain just that, a dream constantly stalled by judicial roadblocks.