Bombay High Court: State of Maharashtra Must Compensate Kalyan Sangam in Toll Dispute

The Bombay High Court made a decision on a complicated argument between the State of Maharashtra and Kalyan Sangam Infratech Ltd. about a toll project. The court agreed with a previous decision that favored Kalyan Sangam, which said it lost money because of changes in traffic rules and toll policies.

The Project and Initial Agreement

In 2009, Kalyan Sangam got a project to build and manage bridges on the Thane-Bhiwandi-Wadapa Road. They were allowed to collect tolls for over 23 years. The project cost was set at Rs. 227.63 crores, with expected toll revenues of Rs. 1,733.18 crores.

Issues Arise with Toll Collection

Kalyan Sangam started collecting tolls in November 2011 but soon faced problems. They claimed toll collections dropped because of:

Traffic Bans: An entry ban for flyover construction reduced traffic.
Toll Discounts: Local vehicles got unexpected discounts.
Non-Payment by Buses: Thane Municipal Corporation buses refused to pay tolls.

Kalyan Sangam argued these issues were broken promises by the government, affecting their revenue.

Arbitration and Court Rulings

The matter went to a special panel, where Kalyan Sangam argued they were owed final payments because of these broken promises. The panel agreed, finding the government at fault and awarding Kalyan Sangam compensation based on project costs and investments.

Court's Analysis and Decision

Justice Somasekhar Sundaresan reviewed the case and supported the panel's decision. Key points included:

Broken Promises by Government: The court found the government didn't keep its promises, leading to significant revenue losses for Kalyan Sangam.
Project Costs and Payments: The court agreed with the panel's calculation of final payments, which included 100% of the debt and 120% of the equity.
Interest Rates: The court upheld the panel's decision to apply interest rates as per the agreement.