A division bench of Chief Justice Mohit Shah and Justice Burgess Colabawalla dismissed MMRDA's challenge of a single-judge order of 2014, rejecting the agency's plea for a stay on the fare hike. MMRDA made an unsuccessful last-ditch attempt and urged the court to continue promotional fares of Rs 10-15-20 that were being charged since July 2014, for three weeks—the time required to challenge the verdict in the Supreme Court. RInfra and MMOPL lawyers vehemently opposed any orders to continue the "discounted fares" claiming it would suffer financial losses.
RInfra and MMOPL sources said no decision had been taken yet on the quantum of the hike or when the new fares would be charged from commuters.
The HC also directed the Union government to set up the fare fixation committee (FFC) by January 31, 2015. The FFC has been asked to finalize the fare structure within three months. The court also admonished the government for failing to set up the panel. "The most unfortunate fact is that the government has not decided on the panel for over a year," the judges observed during the hearing.
The failure to set up the FFC was one of the factors that went in MMOPL's favour. MMOPL had claimed that it was suffering losses to the tune of over Rs 80 lakh daily. The court said in the event that the FFC decided that the Rs10-40 fare structure was reasonable, there was no way for MMOPL to recover the losses it had suffered. However, if the FFC came to the conclusion that the MMOPL's fare structure was on the higher side, there were ways to ensure that benefit could be passed on to commuters (by decreasing fares in lieu of the excess amount charged). The HC did not agree with MMRDA's contention that R-Infra and MMOPL were contractually bound to charge commuters the initial fares laid down in the concession agreement—Rs 9 (up to 3km), Rs 11 (3 to 8km) and Rs 13 (more than 8km).
Mindful of the political fallout of a fare hike, the ruling saffron alliance passed the onus to the previous Democratic Front regime. "We are studying the judgment. We are looking into issues like whether the previous government did not put forth the state's side properly," said chief minister Devendra Fadnavis. "We want to assure people, especially commuters, that we are with them and if need be, we will appeal against the order," he added. According to sources, state authorities might possibly intervene between R-Infra and MMRDA to amicably resolve the fare issue.
NCP leader Sunil Tatkare demanded that the state government appeal against the HC verdict in the Supreme Court.
The Mumbai Metro commenced operations in June 2014 and sought to fix the initial tariff range at Rs 10-40 for the Versova-Andheri-Ghatkopar route. MMRDA, which is an equity partner in MMOPL, took R-Infra to the HC insisting that Metro fares should be according to the concession agreement that set it between Rs 9 and Rs 13. Last year, a single judge of the HC rejected MMRDA's plea for a stay on the fare hike, following which the agency filed an appeal.
MMOPL had pointed to the increased operational costs to justify the fare hike as well as the fact that as opposed to the MMRDA estimate of 4.1 lakh commuters using the Metro, the actual usage was much lower—around 2.65 lakh passengers travelled on the route daily. They also cited the higher fares of air-conditioned BEST buses, taxis and auto rickshaws on the same route. MMRDA, in turn, compared the rates to the Delhi Metro, which were on the lower side, but R-Infra contended that electricity rates were higher in Mumbai.
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