Karnataka HC Upholds Toll Deductions Based On Bus Classification | FASTag Mismatch Not A Ground For Exemption
Sanchayita Lahkar
The High Court of Karnataka Single Bench of Justice M. Nagaprasanna has dismissed a petition challenging the deduction of additional toll charges by a highway concessionaire, upholding the legality of the debit adjustments made under the FASTag system. The Court stated that the toll classification system followed by the concessionaire is lawful and based on contractual and statutory frameworks under the National Highways Act, 1956, and the applicable Rules. The petition sought a prohibition on further deductions from the FASTag wallet accounts of stage carriage vehicles operating in Udupi and Mangalore districts, alleging arbitrary and excessive fee collection.
In its judgement, the Court confirmed that discrepancies between uploaded FASTag data and registered vehicle classifications justify the application of the chargeback mechanism as defined under the relevant guidelines. The judgment clarified that classification for toll purposes is governed not by the Motor Vehicles Act, 1988, but by the National Highways Fee (Determination of Rates and Collection) Rules, 2008 and the concession agreement signed with the National Highways Authority of India (NHAI). The petition was dismissed in its entirety, with the Court directing the Union Government to consider legislative clarification on vehicle classification standards to address the existing regulatory vacuum.
The petition was filed by the Karavali Bus Owners Association along with 21 other individual petitioners who operate stage carriage services in the Udupi and Dakshina Kannada districts of Karnataka. The petitioners challenged the legality of the deductions made by Udupi Sasthana Tollway Private Limited, the third respondent, from their FASTag wallet accounts. These deductions were described as additional charges, allegedly made without prior notice or proper legal authority.
The petitioners contended that their vehicles are classified as minibuses based on their gross vehicle weight, which ranges between 7,500 and 12,000 kilograms. As such, they argued, toll charges should be levied in accordance with the rate applicable to minibuses, which is Rs. 1.05 per kilometre, and not as buses, which are charged at Rs. 2.20 per kilometre. They further asserted that although their vehicles are registered with the Regional Transport Authority as buses, their seating capacity was modified in the FASTag registration as minibuses to align with the weight classification.
The grievance was first raised through a representation dated 21 July 2024 to the Deputy Commissioner and District Magistrate, Udupi. The representation alleged illegal deductions and sought cessation of the chargeback process. This was rejected by the National Highways Authority of India (NHAI) through a communication dated 1 February 2025, which led to the present writ petition.
The first respondent in the case was the Union of India through the Ministry of Road Transport and Highways. The second respondent was the Project Director of the NHAI, and the third was Udupi Sasthana Tollway Private Limited. The fourth respondent was the Deputy Commissioner and District Magistrate, Mangalore.
The third respondent justified the deductions based on the violation matching and audit processes provided in the NETC Interface Control Document (ICD), which governs the FASTag system. According to the concessionaire, deductions are based on vehicle classification discrepancies detected post-transaction. When the class of vehicle recorded in the FASTag does not match the official registration details, additional toll amounts are recovered using the chargeback mechanism.
The petitioners' legal counsel argued that the statutory vacuum under the Motor Vehicles Act regarding vehicles weighing between 7,500 and 12,000 kg allows for classification discretion, thereby legitimising their claim that the vehicles are minibuses. However, the respondents countered that toll collection is governed by the National Highways Fee Rules, which rely on both gross vehicle weight and seating capacity.
In support of their argument, the petitioners cited Sections 2(15), 2(17), 2(21), 2(24), 2(35), 2(40), 2(47), and 2(48) of the Motor Vehicles Act, 1988, to suggest that the Act does not provide a definitive category for medium passenger motor vehicles. They claimed this ambiguity supports their classification of vehicles as minibuses for toll purposes.
Justice M. Nagaprasanna recorded that "the facts, as outlined, are not in dispute. The existence of deductions is not denied. The singular issue that beckons adjudication is, whether the concessionaire is legally empowered to effectuate, a second toll charge, post facto on the premise of data mismatch?"
The Court analysed relevant provisions of the Motor Vehicles Act, 1988 and observed that while it defines gross vehicle weight and types of vehicles such as light, medium, and heavy passenger vehicles, "what happens between 7500 and 12000 Kgs. is in the vacuum." It acknowledged the petitioners’ argument of statutory silence but clarified that toll collection falls under a different legislative scheme.
Referring to the National Highways Fee (Determination of Rates and Collection) Rules, 2008, the Court noted that Rule 2 defines the concessionaire and other FASTag-related terms. It quoted Schedule-R to these Rules, which categorises vehicles and assigns applicable base rates of toll. The classification includes specific provisions for minibuses (vehicles with a weight between 7,500 and 12,000 kg and seating capacity not exceeding 32) and buses (vehicles exceeding 12,000 kg or with seating capacity above 32).
The Court stated: "The vehicle is registered as a bus and seating capacity is shown as 38. The same owner uploads the documents on the FASTag. The owner of the vehicle describes it as a minibus and reduces the seating capacity to 32." In such cases, the discrepancy between registration records and FASTag input triggers the chargeback process.
Referring to the FASTag Manual, the Court observed: "Clause 4.3 and 4.6 of the Manual permit the toll plaza system to notice violation matching and enter into violation auditing... under Clause 17, which deals with dispute handling, the concessionaire is empowered to credit adjust, debit adjust and charge back."
The Court further recorded that "the debit adjustment can be for several reasons. One of the reasons is, vehicle class mismatch. Same goes with the charge back." It found the concessionaire had acted in accordance with the Manual and the terms of the concession agreement.
Justice Nagaprasanna stated: "What is discernible from the afore-quoted clauses is that the concessionaire is entitled to do a debit adjustment in case of a vehicle mismatch. In the case at hand, the vehicle mismatch has arisen on the variation with the registration certificate... and what is uploaded on to the FASTag."
Addressing the petitioners’ reliance on the Motor Vehicles Act, the Court stated: "Fee collection is not dealt with under the Act. It is dealt with under the aforesaid Rules framed under the Highways Act... Schedule-R clearly defines the collection to the passenger capacity."
In conclusion, the Court held that the petitioners’ argument, if accepted, would cause revenue losses due to manipulation of vehicle classifications and that "we have to fallback upon the Highways Act and the Rules, and the agreement between NHAI and the concessionaire."
Justice M. Nagaprasanna issued the following directions: “The Writ Petition being devoid of merit stands dismissed."
Additionally, the Court called for a legislative review, stating: "The 1st respondent shall endeavour to redefine the classes of vehicles in the Motor Vehicles Act, 1988, bearing in mind the observations made in the course of the order, failing which, it would result in mushrooming of such submissions being projected."
The Court further ordered that: "Copy of this order shall be furnished to the Additional Solicitor General of India."
Advocates Representing the Parties:
For the Petitioners: Sri Puttige R. Ramesh, Senior Advocate along with Sri A.S. Parasara Kumar, Advocate
For the Respondents: Sri Aditya Singh, Central Government Counsel; Smt. Shilpa Shah, Advocate, Sri C.K. Nandakumar, Senior Advocate for Sri Raghuram Cadambi, Advocate; Sri Shamanth Naik, High Court Government Pleader
Case Title: Karavali Bus Owners Association (R) & Ors. v. Union of India & Ors.
Case Number: W.P. No. 9159 of 2025
Bench: Justice M. Nagaprasanna
[Read/Download order]
