New Delhi, Dec 20 (PTI) The Supreme Court on Friday said government policies pioneered in public interest must genuinely serve the people and not merely enrich private entities as it scrapped a private firm's contract to collect toll at DND flyway.

Justices Surya Kant and Ujjal Bhuyan scrapped the contract awarded to a private firm to collect toll from lakhs of commuters plying daily on the Delhi-Noida-Direct (DND) flyway connecting south Delhi and Noida.

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Dismissed the appeal of Noida Toll Bridge Company Ltd (NTBCL), a private firm running the DND flyway, the bench upheld the 2016 decision of the Allahabad High Court asking it to stop collecting toll from commuters.

The bench said the contract awarded to NTBCL through the concession agreement by state authorities and Noida was “unfair, unjust and inconsistent with constitutional norms”.

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"The golden principle thus is that government procedures or policies pioneered in public interest must genuinely serve the public and not merely enrich private entities. When public interest is overshadowed, it does raise concerns as to whether the Government has acted in a manner that appears capricious or arbitrary,” the bench said.

It added the government must not act in a manner benefitting private entities at the expense of the state and such actions, if unreasonable and contrary to the aegis of public interest, would undermine the state's constitutional obligations.

The bench said such procedures must therefore satisfy the litmus test of due application of mind, fairness, transparency, and most pertinently, being bona fide.

"The concession agreement for the development of the DND Flyway, entered into between NOIDA, IL&FS and NTBCL, is conspicuously silent regarding the issuance of any tender or inviting bids from other competitors,” it said.

The top court observed it may be true that the mere non-floating of tenders or absence of a public auction or invitation alone, couldn't serve as sufficient grounds to term the actions of a public authority as arbitrary or mala fide.

The court noted it however did not absolve the state or its instrumentalities from their obligation to demonstrate due application of mind, ensure transparency and fairness in their decision-making process.

"Turning to the events of the case in hand, it is a matter of record that the government made no efforts to issue tenders, invitations, or seek competitive bids from other interested entrepreneurs. There is no basis at all to claim that following such a procedure would have been detrimental to the proposed project," it said.

The apex court said on the contrary, Noida in collaboration with IL&FS, assigned the mammoth responsibility of constructing this novel infrastructure upon NTBCL.

"Interestingly, NTBCL was a nonexistent entity, as it came to be incorporated only on April 8, 1996, i.e., four years after the MoU was executed between the Delhi Administration, NOIDA, and IL&FS, to establish a bridge between Delhi and NOIDA,” it said.

The justification rendered by NTBCL and NOIDA that there was no other infrastructure development company at the time which could have undertaken the construction of the DND Flyway was said to be "nothing but a self-serving claim" by an entity which was the sole beneficiary of the state largesse.

Another proposition that IL&FS, being the only institution or agency controlled by the public sector, was uniquely positioned to offer expertise in specialised infrastructure development and generate the necessary financing, did not justify the undue favour extended to NTBCL, the court said.

The bench found it "difficult to accept" that there was such a dearth of experienced companies offering better financial terms and solutions for developing the DND Flyway alongside IL&FS.

The selection of NTBCL without following proper procedure and without giving any opportunity to bid, to other competitors, was nothing but an opaque device resorted to, in contravention of Article 14 of the Constitution of India, the apex court said in its 54-page verdict.

(This is an unedited and auto-generated story from Syndicated News feed, LatestLY Staff may not have modified or edited the content body)