CONSUMER ONLINE FOUNDTION Vs UNION OF INDIA .
Bench: R.V. RAVEENDRAN,A.K. PATNAIK, , ,
Case number: C.A. No.-003611-003611 / 2011
Diary number: 29003 / 2009
Advocates: AP & J CHAMBERS Vs
DHARMENDRA KUMAR SINHA
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Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.3611 OF 2011 [Arising out of S.L.P. [C] No.25041 of 2009]
Consumer Online Foundation, etc. … Appellants Versus
Union of India & Ors., etc. … Respondents
WITH
CIVIL APPEAL NO.3612 OF 2011 [Arising out of S.L.P. [C] No.23541 of 2009],
CIVIL APPEAL NO.3613 OF 2011 [Arising out of S.L.P. [C] No.29471 of 2009]
AND
CIVIL APPEAL NO.3614 OF 2011 [Arising out of S.L.P. [C] No. 11799 of 2011]
[CC No.1066/2010]
J U D G M E N T
A. K. PATNAIK, J.
Application for permission to file SLP in SLP [C]
No.11799/2011 [CC No.1066/2010] is allowed and delay
condoned.
2. Leave granted.
3. These are appeals against the judgment and order
dated 26.08.2009 of the Division Bench of the Delhi High
Court in public interest litigations upholding the validity of
levy of development fees on the embarking passengers by
the lessees of the Airports Authority of India at the Indira
Gandhi International Airport, New Delhi and the
Chhatrapati Shivaji International Airport, Mumbai.
Relevant Facts:
4. The Airports Authority of India Act, 1994 (for short ‘the
1994 Act’) came into force on 01.04.1995 and under Section
3 of the 1994 Act, the Central Government constituted the
Airports Authority of India (for short ‘the Airports
Authority’). Section 12 of the 1994 Act enumerates the
various functions of the Airports Authority. By the Airports
Authority of India (Amendment) Act, 2003 (for short ‘the
Amendment Act of 2003’), Sections 12A and 22A were
inserted in the 1994 Act with effect from 01.07.2004. The
newly inserted Section 12A provides that the Airports
Authority may make a lease of the premises of an airport to
carry out some of its functions under Section 12 as the
Airports Authority may deem fit. The newly inserted Section
2
22A of the 1994 Act provides that with the approval of the
Central Government, the Airports Authority may levy on,
and collect from, the embarking passengers at an airport,
the development fees at the rate as may be prescribed. On
04.04.2006, the Airports Authority leased out the Indira
Gandhi International Airport, New Delhi (for short ‘the Delhi
Airport’) to the Delhi International Airport Private Limited
(for short ‘DIAL’) and also leased out the Chhatrapati Shivaji
International Airport, Mumbai (for short ‘the Mumbai
Airport’) to Mumbai International Airport Private Limited (for
short ‘MIAL’). Section 22A of the 1994 Act was amended by
the Airports Economic Regulatory Authority of India Act,
2008 (for short ‘the 2008 Act’) and the amended Section 22A
provided for determination of the rate of development fees
for the major airports under clause (b) of sub-section (1) of
Section 13 of the 2008 Act by the Airports Economic
Regulatory Authority (for short ‘the Regulatory Authority’).
The amended Section 22A was to take effect on and from
the date of the establishment of the Regulatory Authority.
The Government of India, Ministry of Civil Aviation, sent a
letter dated 09.02.2009 to DIAL conveying the approval of
3
the Central Government under Section 22A of the 1994 Act
for levy of development fees by DIAL at the Delhi Airport at
the rate of Rs.200/- per departing domestic passenger and
at the rate of Rs.1300/- per departing international
passenger inclusive of all applicable taxes, purely on ad hoc
basis, for a period of 36 months with effect from
01.03.2009. Similarly, the Government of India, Ministry of
Civil Aviation, sent another letter dated 27.02.2009 to MIAL
conveying the approval of the Central Government under
Section 22A of the 1994 Act for levy of development fees by
MIAL at the Mumbai Airport at the rate of Rs.100/- per
departing domestic passenger and at the rate of Rs.600/-
per departing international passenger inclusive of all
applicable taxes, purely on ad hoc basis, for a period of 48
months with effect from 01.04.2009. The levy of
development fees by DIAL as the lessee of the Delhi Airport
was challenged in Writ Petition No. 8918/2009 by
Resources of Aviation Redressal Association. The levy of
development fees by DIAL and MIAL as lessees of the Delhi
and Mumbai Airports were challenged in Writ Petition No.
9316 of 2009 and Writ Petition No. 9307 of 2009 by
4
Consumer Online Foundation. The Writ petitioners
contended inter alia that such levy of development fees
under Section 22A of the 1994 Act can only be made by the
Airports Authority and not by the lessee and that until the
rate of such levy is either prescribed by the Rules made
under the 1994 Act or determined by the Regulatory
Authority under the 2008 Act as provided in Section 22A of
the Act before and after its amendment by the 2008 Act, the
levy and collection of development fees are ultra vires the
1994 Act. The Division Bench of the High Court, after
hearing, held that there was no illegality attached to the
imposition of development fees by the two lessees with the
prior approval of the Central Government and dismissed the
writ petitions by the impugned judgment and order.
Conclusions of the High Court:
5. In the impugned judgment and order, the High Court
held that under sub-section (1) of Section 12A of the 1994
Act, the Airports Authority is empowered to lease an airport
for the performance of its functions under Section 12 and
such a lease is a statutory lease which enables the lessee to
perform the functions of the Airports Authority enumerated
5
in Section 12. The High Court further held that sub-section
(4) of Section 12A provides that the lessee who has been
assigned some functions of the Airports Authority under
sub-section (1) shall have “all” the powers of the Airports
Authority necessary for the performance of such functions
in terms of the lease and use of the word “all” indicates that
the lessee would have each and every power of the Airports
Authority for the purpose of discharging such functions
including the power under Section 22A to levy and collect
development fees from the embarking passengers. The High
Court took the view that development fee though described
as fee in Section 22A is more akin to a charge or tariff for
the facilities provided by the Airports Authority to the
airlines and passengers. The High Court came to the
conclusion that the exercise of the power to levy and collect
development fees under Section 22A was not dependent on
the existence of the rules and, therefore, this power can be
exercised even if the rules have not framed prescribing the
rate of development fees under Section 22A (before its
amendment by the 2008 Act). In coming to this conclusion,
the High Court relied on the decisions of this Court in U.P.
6
State Electricity Board, Lucknow v. City Board, Mussorie &
Ors. [(1985) 2 SCC 16], Mysore Road Transport Corporation
v. Gopinath Gundachar Char [AIR 1968 SC 464] and Sudhir
Chandra Nawn v. Wealth- Tax Officer, Calcutta & Ors. [1969
(1) SCR 108].
Contentions on behalf of the appellants:
6. Mr. Fali S. Nariman, learned senior counsel, leading
the arguments on behalf of the appellants, made these
submissions:
(i) The conclusion of the High Court that the power under
Section 22A to levy and collect the development fees from
the embarking passengers can be exercised without the
rules is erroneous because the language of Section 22A of
the 1994 Act prior to its amendment by the 2008 Act makes
it clear that development fees could be levied and collected
from the embarking passengers at the airport “at the rate as
may be prescribed” and the fees so collected are to be
credited to the Airports Authority and are to be regulated
and utilized “in the prescribed manner”. Unless, therefore,
the statutory rules are made prescribing the rate at which
7
such fees are to be collected and prescribing the regulation
and manner of the utilization of development fees, the power
under Section 22A cannot be exercised. After the
amendment by the 2008 Act, Section 22A(ii) provides that
the development fee to be levied on and collected from the
embarking passengers at major airports, such as the Delhi
Airport and the Mumbai Airport, would be at the rate as
may be determined under Clause (b) of sub-section (1) of
Section 13 of the 2008 Act. The Regulatory Authority has
been established by notification dated 12.05.2009 and
unless the rate of development fees is determined by the
Regulatory Authority under Clause (b) of sub-section (1) of
Section 13 of the 2008 Act, the same cannot be levied and
collected from the embarking passengers at the two major
airports. The determination of the rate of development fees
to be levied at the two major airports under Clause (b) of
sub-section (1) of Section 13 of the 2008 Act by the
Regulatory Authority of India is still pending and the
impugned levy of development fees by DIAL and MIAL are,
therefore, ultra vires.
8
(ii) The purposes for which the development fees are to be
levied and collected are indicated in clauses (a), (b) and (c) of
Section 22A of the 1994 Act and these are:
(a) funding or financing the costs of upgradation,
expansion or development of the airports at which the
fees is collected, or
(b) establishment or development of a new airport in lieu
of the existing airport, or
(c) investment in the equity in respect of shares to be
subscribed by the Airports Authority in companies
engaged in establishing, owning, developing, operating
or maintaining a private airport in lieu of the existing
airport or advancement of loans to such companies or
other persons engaged in such activities.
Under the 1994 Act, it is only the Airports Authority which
can carry out these three purposes and not the lessee of the
Airports Authority under Section 12A of the 1994 Act and,
therefore, the lessee can have no power to levy and collect
the development fees from the embarking passengers. He
argued that the conclusion of the High Court in the
impugned judgment and order, that under sub-section (4) of
9
Section 12A of the 1994 Act, the lessee having been
assigned some of the functions of the Airports Authority has
all the powers of the Airports Authority necessary for the
performance of such functions in terms of the lease
including the power to levy development fees under Section
22A of the 1994 Act, is therefore not correct. He referred to
the various provisions of the Operation, Management and
Development Agreement (for short ‘OMDA’) and the State
Support Agreement executed between the Airports Authority
and DIAL/MIAL to show that the power to levy development
fees from the embarking passengers have in fact not been
assigned by the Airports Authority to DIAL/MIAL.
Reply on behalf of the Union of India:
7. Mr. Gopal Subramanium, learned Solicitor General
appearing for the Union of India, made these submissions:
(i) Section 12A of the 1994 Act begins with a non-
obstante clause and it empowers the Airports Authority to
lease the premises of an airport to a third party to carry out
some of its functions under Section 12 of the 1994 Act and
in exercise of this power the Airports Authority and the
1
DIAL and the Airports Authority and MIAL have entered into
agreements in respect of the leases and the Airports
Authority has delegated some of its functions to DIAL and
MIAL in respect of the Delhi Airport and Mumbai Airport
respectively. A reading of the lease agreements (OMDA)
would show that the functions of operation, maintenance,
development, design, construction, up-gradation,
modernization, finance and management of the airports are
to be carried out by the two lessees. If DIAL and MIAL have
to carry out these functions under the lease agreement to
develop, finance, design, construct, modernize, operate,
maintain, use and regulate the use of the airports by the
third party, they must have power to determine, demand,
collect and retain appropriate charges from the users of the
airports.
(ii) Section 22A of the 1994 Act permits the Airports
Authority after previous approval of the Central Government
to levy on and collect from embarking passengers at an
airport development fees. Accordingly, after the lease of the
two airports by the Airports Authority to DIAL and MIAL,
the Central Government has conveyed its approval in the
1
two letters dated 09.02.2009 and 27.02.2009 to DIAL and
MIAL for levy of development fees by DIAL and MIAL
respectively from the two airports. Such approval conveyed
by the Central Government is entirely in accordance with
Section 12A of the 1994 Act. In view of sub-section (4) of
Section 12A of the 1994 Act providing that a lessee who has
been assigned any of the functions of the Airports Authority
would have all the powers of the Airports Authority
necessary for the performance of such function in terms of
the lease, the power of the Airports Authority to levy the
development fees has also been rightly assigned to DIAL and
MIAL. A reading of the two approval letters would show that
various conditions and safeguards have been incorporated
in the approval letters to protect the interest of the public
and to provide rigorous checks with regard to the manner in
which DIAL and MIAL can deal with the fees collected by
them and it will be clear from the approval letters that the
fees can be utilized only for the purpose mentioned in
Section 22A of the 1994 Act.
(iii) The purposes mentioned in clauses (b) and (c), namely,
“development of a new airport” and “a private airport”
1
respectively relate to the very airport in respect of which the
lease is executed and fees are collected, as it would be clear
from the expression “in lieu of the airport referred to in
clause (a)”. It is significant that Section 12A and Section
22A of the 1994 Act were both introduced by the same
Amendment Act of 2003.
(iv) Though Section 22A of the 1994 Act, before its
amendment by the 2008 Act provided that for levy of
development fees “at the rate as may be prescribed” and for
regulation and utilization of the development fees “in the
prescribed manner”, the absence of the rules prescribing the
rate of development fees or the manner of regulation and
utilization of development fees will not render Section 22A
ineffective. The legal proposition that absence of rules and
regulations cannot negate the power conferred on an
authority by the legislature is settled by decisions of this
Court in Orissa State (Prevention & Control of Pollution)
Board v. Orient Paperdd Mills & Anr. [(2003) 10 SCC 421],
U.P. State Electricity Board, Lucknow v. City Board, Mussorie
& Ors. (supra), Kerala State Electricity Board v. M/ s S .N.
Govinda Prabhu & Bros. & Ors. [(1986) 4 SCC 198], Surinder
1
Singh v. Central Government & Ors. [(1986) 4 SCC 667] and
Mysore Road Transport Corporation v. Gopinath Gundachar
Char (supra).
(v) The arguments advanced by Mr. Nariman on behalf of
the appellant regarding the amendment of Section 22A of
the 1994 Act by the 2008 Act were not raised before the
High Court and the foundation for such a plea has also not
been laid in the special leave petition. In any case the
approval granted by the Central Government to DIAL and
MIAL to levy the development fees for a period of three years
would not be rendered automatically inoperative on the
enactment of the 2008 Act amending Section 22A of the
1994 Act and therefore DIAL and MIAL continue to have the
right to collect the development fees by virtue of the
approvals granted by the Central Government which are
saved by Section 6 (c) of the General Clauses Act, 1897
despite the amendment of Section 22A by the 2008 Act.
The decisions of this Court in Jayantilal Amrathlal v. Union
of India [(1972) 4 SCC 174], S.L. Srinivasa Jute Twine Mills
(P) Ltd. v. Union of India & Anr. [(2006) 2 SCC 740] and M/s.
1
Gurcharan Singh Baldev Singh v. Yashwant Singh & Ors.
[(1992) 1 SCC 428] support this contention.
(vi) Section 2 (n) of the 2008 Act defines “service provider”
as any person who provides aeronautical services “and is
eligible to levy and charge user development fees from the
embarking passengers at any airport and includes the
authority which manages the airport”. This provision
expressly indicates that under the 2008 Act also the entity
managing the airport is eligible to levy and collect the
development fees. The 1994 Act and the 2008 Act provide a
statutory framework for the modernization and
improvement of the aviation infrastructure of the country
and should be interpreted in a harmonious manner so that
they complement each other rather than conflict with each
other. The Regulatory Authority constituted under the 2008
Act has already issued a public notice dated 23.04.2010
which would show that it has permitted DIAL to continue to
levy the development fees at the rate of Rs.200/- per
departing domestic passenger and at the rate of Rs.1,300/-
per departing international passenger with effect from
01.03.2009 on an ad hoc basis pending final determination.
1
The Court should not therefore interfere with the levy and
collection of the development fees by DIAL and MIAL at this
stage.
Reply on behalf of MIAL and DIAL:
8. Mr. Harish N. Salve, learned senior counsel, and Dr.
Abhishek Singhvi, learned senior counsel, appeared for
MIAL and DIAL and made these submissions:
(i) The challenge of the appellant to the levy and
collection of airport development fees by the lessees of the
two airports is based on a misconception that development
fees is in the nature of a tax and can be levied strictly in
accordance with Section 22A of the 1994 Act, only by the
Airports Authority and not by the lessee. Development fees
is not really a tax but charges levied and collected by the
lessee for development of facilities for the use of the airport.
The lessees, which are non-government companies, have
established the utility in a public-private partnership, and
do not require a statutory authorization or permission to
recover such charges by way of development fee, from the
passengers using the airport and the lessees do not require
1
the support of the statutory provision of Section 22A for levy
and collection of development fees. Section 11 of the 1994
Act mandates that the Airports Authority would discharge
its functions on business principles and Section 12 of the
1994 Act enumerates the functions of the Airports Authority
and as the Airports Authority in the discharge of its
functions provides different facilities, it is entitled to collect
charges for such facilities as per contractual arrangements
with those who use the facilities. These charges are really
in the nature of consideration from persons using the
facilities provided by the Airports Authority. The nature of
these charges for the facilities provided by an authority has
been clarified by this Court in The Trustees of the Port of
Madras v. M/s Aminchand Pyarelal & Ors. [(1976) 3 SCC
167], Mumbai Agricultural Produce Market Committee & Anr.
v. Hindustan Lever Limited & Ors . [(2008) 5 SCC 575], Union
of India v. S. Narayana Iyer [(1970) 1 MLJ 19] and Union of
India & Ors. v. Motion Picture Association & Ors . [(1999) 6
SCC 150]. As the facilities are in the nature of monopolies,
the statute imposes regulations for the charges to prevent
an abuse of monopolistic position and Sections 22 and 22A
1
of the 1994 Act reflect such statutory curtailments of the
rights of the owners of the facilities to recover sums from
airlines and passengers. Hence, the right to recover charges
is not based on Sections 22 and 22A but flows from the
ownership of the facilities. What is determined, therefore, is
the charges that would be contractually recovered from the
users of the facilities as was held in M/s Aminchand
Pyarelal & Ors. (supra).
(ii) Section 22 of the 1994 Act identified the heads on which
charges could be recovered. Section 22A, therefore, merely
adds three more heads for which funds could be raised and
this is akin to adding components of a tariff. Section 22A
does not change the quality and character of the recovery of
charges by the owners of the facilities from the users
thereof. Section 22A does not also change the nature and
character of what is recovered by an airport operator from
its customers. The High Court was, therefore, right in
coming to the conclusion in the impugned judgment that
development fees under Section 22A of the 1994 Act was in
the nature of a tariff.
1
(iii) Section 12A of the 1994 Act (a) recognizes statutorily
the power of the Airports Authority to make a lease of the
premises of an airport for the purpose of carrying out some
of its functions under Section 12 and (b) transfers as it were
to the lessee all the powers of the Authority. As will be clear
from sub-section (4) of Section 12A of the Act, the lessee
who has been assigned some functions of the Airports
Authority under Section 12 of the 1994 Act has the power of
the Airports Authority “necessary for the performance of
such functions”. The power to recover charges for the
facilities at the airport in respect of which a lease is made,
whether they be the charges under Section 22 or the
charges under Section 22A are necessary for discharging of
the functions of maintaining and upgrading the airports.
Since sub-section (4) of Section 12A itself states that the
lessee shall have “all” the powers of the Airports Authority,
there is no warrant to take the view that the lessee shall not
have the power of the Airports Authority under Section 22A
to levy and collect development fees.
(iv) The functions which have been entrusted to the two
lessees, DIAL and MIAL, include the up-gradation and
1
modernization of the airport including construction of new
terminals and this will be clear from clause 2.1 titled “Grant
of Function” and clause 8.3 titled “Master plan” of the
OMDA. The relevant provisions of the State Support
Agreement between the Airports Authority and the two
lessees and in particular clauses 3.1 and 3.1A also deal
with the recovery of such charges in the performance of the
functions. It is for the discharge of these functions that
development fees is levied and collected and the power to
collect development fee has been passed on to the lessee
under sub-section (4) of Section 12A of the 1994 Act.
(v) Rules prescribing the rate of development fees and
regulation and the manner in which the development fees
will be utilized as provided in Section 22A of the 1994 Act
cannot curtail the power to levy and collect development
fees under Section 22A of the 1994 Act. This proposition is
settled by the decisions of this Court in Orissa State
(Prevention & Control of Pollution) Board v. Orient Paperdd
Mills & Anr. (supra), T. Cajee v. U. Jormanik Siem & Anr.
(AIR 1961 SC 276), The Madras and Southern Maharatta
Railway Company Limited v. The Municipal Council Bezwada
2
[(1941) 2 MLJ 189] as approved by the Privy Council in its
decision reported in AIR 1944 PC 71, Jantia Hill Truck
Owners Association, etc. v. Shailang Area Coal Dealer and
Truck Owner Association & Ors. [(2009) 8 SCC 492],
Surinder Singh v. Central Government & Ors. (supra),
Meghalaya State Electricity Board & Anr. v. Jagadindra
Arjun [(2001) 6 SCC 446] and U.P. State Electricity Board,
Lucknow v. City Board, Mussorie & Ors. (supra). Since the
power to collect the development fee is already available to
the Airports Authority or its lessees as part of its power to
collect charges for the facilities, absence of a rule does not
negate the power. The rule under Section 22A was to be
made not for purposes of conferring the power but to
regulate the rate of development fees and manner of
utilization of development fee as a check on such power.
(vi) After the 2008 Act and after the notification dated
31.08.2009 bringing the provisions of 2008 Act in Chapters
III and VI into force w.e.f. 01.09.2009, the Regulatory
Authority has jurisdiction under Section 13(1)(b) of the 2008
Act to determine the amount of development fees in respect
of major airports, such as, Delhi and Mumbai Airports. The
2
Regulatory Authority has already commenced its functions
and has undertaken the process of final determination of
development fee. Till the Regulatory Authority modifies the
levy of development fees, the two lessees are entitled to
collect development fees as per the two letters dated
09.02.2009 and 27.02.2009 of the Central Government
conveying the approval to the lessees of the two airports.
The contention of the appellant that the development fees
cannot be recovered till such time as the Regulatory
Authority determines the rate of development fees is
misconceived. The contention of the appellant that the
development fees can be utilized only for the purposes
mentioned in Section 22A of the 1994 Act is also
misconceived. The approval letters of the Central
Government show that the development fees can be utilized
for the development of Aeronautical Assets which are
Transfer Assets in terms of OMDA; and under the OMDA,
these Transfer Assets shall revert to the Airports Authority
on the expiry or early termination of OMDA. On a perusal
of the three clauses enumerated in Section 22A of the 1994
Act, it is clear that depending on the functions assigned to
2
the lessee, the corresponding powers to collect development
fees for discharging the function also is passed on to the
lessee under sub-section (4) of Section 12A of the 1994 Act.
In other words, there is a clear nexus established between
the function so assigned and the power to collect the
development fees.
Rejoinder on behalf of the appellants:
9. In rejoinder, Mr. Nariman made these submissions:
(i) Under Clause 13(i) of OMDA the lessee has undertaken
to arrange for financing and/or meeting of all financial
requirements through suitable debt and equity the
contribution in order to comply with its obligation including
development of the airport pursuant to the Master Plan and
the Major Development Plans. Hence, there was no
question of levy of development fees by the lessee for the
purposes of development of the airport which has been
leased out to the lessee. The airports belong to the Central
Government and the Airports Authority has leased out the
airport premises to the lessee to manage the airport.
Section 38 of the 1994 Act empowers the Central
Government to temporarily divest the Airports Authority of
2
the management of the airport and Section 39 of the 1994
Act empowers the Central Government to supersede the
Airports Authority. The lessee, therefore, is not the owner of
the airport and is consequently not empowered to charge
development fess for the development of the airport. Only a
limited right has been conferred on the private lessee under
Section 12A of the 1994 Act to undertake some of the
functions of the Airports Authority enumerated in Clause
2.1.1 of the OMDA read with Schedule 5 and Schedule 6
which enumerate the aeronautical services and non-
aeronautical services respectively.
(ii) The levy under Section 22A of the 1994 Act is for the
specific purposes mentioned in Clauses (a), (b) or (c) thereof
and though termed as fees, it is really in the nature of a
cess and therefore there need not be any direct co-relation
between the levy of fees and the services rendered as has
been held by the High Court in the impugned judgment. In
Vijayalashmi Rice Mills & Ors. v. Commercial Tax Officers,
Palakot & Ors. [(2006) 6 SCC 763], this Court has also held
that ordinarily a cess means a tax which raises revenue
which is applied to a specific purpose. This Court has held
2
in Commissioner of Income Tax, Udaipur, Rajasthan v.
Mcdowell and Company Ltd. [(2009)10 SCC 755] that the
power to levy tax, duty, cess or fee can be exercised only
under law authorizing the levy. Thus, cess is ultimately a
compulsory exaction of money and must satisfy the test of
Article 265 of the Constitution which declares that no tax
shall be levied or collected without authority of law. This
Court has also held in Ahmedabad Urban Development
Authority v. Sharadkumar Jayantikumar Pasawalla & Ors.
[(1992) 3 SCC 285] that the power of imposition of tax
and/or fee must be very specific and there is no scope of
implied authority for imposition of such tax or fee. This
position of law has been reiterated by this Court in State of
West Bengal v. Kesoram Industries Ltd. & Ors. [(2004) 10
SCC 201]. Section 22A of the 1994 Act was, therefore,
enacted by the Amendment Act of 2003 to specifically
empower the Development Authority to impose levy and
collect development fees which is to be used for the specific
purposes indicated in clauses (a), (b) and (c) of Section 22A
of the 1994 Act and this power cannot be usurped by the
lessee of the airport by treating it as charges for facilities.
2
(iii) The judgments relied on by the respondents in support
of their contention that non-framing of rules do not negate
the power to levy development fees under Section 22A of the
1994 Act have been rendered by this Court in the context of
enactments which are not pari materia with Section 22A of
the 1994 Act. In Bangalore Water Supply & Sewerage
Board v. A. Rajappa & Ors. [(1978) 2 SCC 213], this Court
has cautioned that the same words may mean one thing in
one context and another in different context. This position
of law has also been stated in Justice G.P. Singh’s Treatise
on Interpretation of Statutes, 12th Edition 2010 at pages
298-299. Hence, the judgments cited on behalf of the
respondents are of no aid to interpret Section 22A of the
1994 Act which clearly provides that the development fees
can be levied and collected at the rate prescribed by the
rules and are to be regulated and utilized in the manner
prescribed by the rules. In Mohammad Hussain Gulam
Mohammad & Anr. v. The State of Bombay & Anr. [1962 (2)
SCR 659], a Constitution Bench of this Court has held that
since Section 11 of the Bombay Agricultural Produce
Markets Act, 1939 provides that rules will prescribe the
2
maxima and the fees fixed must be within the maxima, till
such maxima are fixed by the rules, it would not be possible
for the Market Committee to levy fees. Similarly, in
Dhrangadhra Chemical Works Ltd. v. State of Gujarat & Ors.
[(1973) 2 SCC 345], this Court has held that the framing of
rules was a mandatory requirement enjoined by Section
60(a)(ii) of the Bombay Municipalities Act, 1901 before
imposing a tax by a resolution passed at a general meeting.
(iv) The two letters dated 09.02.2009 and 27.02.2009 of
the Government of India, Ministry of Civil Aviation, to DIAL
and MIAL respectively can convey only the approvals of the
Central Government under Section 22A of the 1994 Act for
levy of development fees by DIAL and MIAL respectively but
cannot authorize DIAL and MIAL to levy and collect
development fees under Section 22A of the 1994 Act
because under this provision the Airports Authority only
has the power to levy and collect development fees and DIAL
and MIAL have no such authority. The two letters dated
09.02.2009 and 27.02.2009 are not saved by Section 6 of
the General Clauses Act, 1897 because this provision does
2
not protect any action taken under the authority of the
letter.
(v) The public notice dated 23.04.2010 issued by the
Regulatory Authority pertaining to levy of development fees
by DIAL regarding the fees of Rs.200/- per departing
domestic passenger and Rs.1300/- per departing
international passenger on ad hoc basis is without
jurisdiction as under the 2008 Act, the Regulatory Authority
alone has the power to determine the rate of development
fees in respect of major airports after following the
procedure laid down in Section 13 of the 2008 Act. There is
no public notice issued by the Regulatory Authority so far in
respect of the Mumbai Airport. The levy and collection of
development fees by DIAL and MIAL at the two airports are,
therefore ultra vires and may be restrained by the Court.
Relevant Provisions of Law:
10. Section 12 of the 1994 Act as amended by the
Amendment Act of 2003, Section 22 of the 1994 Act,
Sections 12A and 22A inserted by the Amendment Act of
2003 with effect from 01.07.2004 and Section 22A as
amended by the 2008 Act, which are relevant for deciding
2
the questions raised before us by the parties, are extracted
hereinbelow:-
“12. Functions of the Authority.— (1) Subject to the rules, if any, made by the Central Government in this behalf, it shall be the function of the Authority to manage the airports, the civil enclaves and the aeronautical communication stations efficiently.
(2) It shall be the duty of the Authority to provide air traffic service and air transport service at any airport and civil enclaves.
(3) Without prejudice to the generality of the provisions contained in sub-sections (1) and (2), the Authority may—
(a) plan, develop, construct and maintain runways, taxiways, aprons and terminals and ancillary buildings at the airports and civil enclaves;
(aa) establish airports, or assist in the establishment of private airports by rendering such technical, financial or other assistance which the Central Government may consider necessary for such purpose. (Inserted by the Amendment Act of 2003)
(b) plan, procure, install and maintain navigational aids, communication equipment, beacons and ground aids at the airports and at such locations as may be considered necessary for safe navigation and operation of aircrafts;
2
(c) provide air safety services and search and rescue, facilities in co-ordination with other agencies;
(d) establish schools or institutions or centers for the training of its officers and employees in regard to any matter connected with the purposes of this Act;
(e) construct residential buildings for its employees;
(f) establish and maintain hotels, restaurants and restrooms at or near the airports;
(g) establish warehouses and cargo complexes at the airports for the storage or processing of goods;
(h) arrange for postal, money exchange, insurance and telephone facilities for the use of passengers and other persons at the airports and civil enclaves;
(i) make appropriate arrangements for watch and ward at the airports and civil enclaves;
(j) regulate and control the plying of vehicles, and the entry and exit of passengers and visitors, in the airports and civil enclaves with due regard to the security and protocol functions of the Government of India;
(k) develop and provide consultancy, construction or management services, and undertake operations in India and abroad in relation to airports, air-navigation services, ground aids and safety services or any facilities thereat;
(l) establish and manage heliports and airstrips;
3
(m) provide such transport facility as are, in the opinion of the Authority, necessary to the passengers traveling by air;
(n) form one or more companies under the Companies Act, 1956 or under any other law relating to companies to further the efficient discharge of the functions imposed on it by this Act;
(o) take all such steps as may be necessary or convenient for, or may be incidental to, the exercise of any power or the discharge of any function conferred or imposed on it by this Act;
(p) perform any other function considered necessary or desirable by the Central Government for ensuring the safe and efficient operation of aircraft to, from and across the air space of India;
(q) establish training institutes and workshops;
(r) any other activity at the airports and the civil enclaves in the best commercial interests of the Authority including cargo handling, setting up of joint ventures for the discharge of any function assigned to the Authority.
(4) In the discharge of its functions under this section, the Authority shall have due regard to the development of air transport service and to the efficiency, economy and safety of such service.
(5) Nothing contained in this section shall be construed as-
3
(a) authorizing the disregard by the Authority of any law for the time being in force; or
(b) authorizing any person to institute any proceeding in respect of duty or liability to which the Authority or its officers or other employees would not otherwise be subject.
22. Power of the Authority to charge fees, rent, etc.- The Authority may,-
(i) With the previous approval of the Central Government, charge fees or rent -
(a) for the landing, housing or parking of aircraft or for any other service or facility offered in connection with aircraft operations at any airport, heliport or airstrip;
Explanation. - In this sub-clause “aircraft” does not include an aircraft belonging to any armed force of the Union and “aircraft operations” does not include operations of any aircraft belonging to the said force;
(b) for providing air traffic services, ground safety services, aeronautical communications and navigational aids and meteorological services at any airports and at any aeronautical communication station;
(c) for the amenities given to the passengers and visitors at any airport, civil enclave, heliport or airstrip;
(d) for the use and employment by persons of facilities and other services provided by the Authority at any airport, civil enclave heliport or airstrip;
(ii) with due regard to the instructions that the Central Government may give to the
3
Authority, from time to time, charge fees or rent from persons who are given by the Authority any facility for carrying on any trade or business at any airport, heliport or airstrip.
Inserted by the Amendment Act of 2003
12A. Lease by the authority.—(1) Notwithstanding anything contained in this Act, the Authority may, in the public interest or in the interest of better management of airports, make a lease of the premises of an airport (including buildings and structures thereon and appertaining thereto) to carry out some of its functions under section 12 as the Authority may deem fit:
Provided that such lease shall not affect the functions of the Authority under section 12 which relates to air traffic service or watch and ward at airports and civil enclaves.
(2) No lease under sub-section (1) shall be made without the previous approval of the Central Government.
(3) Any money, payable by the lessee in terms of the lease made under sub- section (1), shall form part of the fund of the Authority and shall be credited thereto as if such money is the receipt of the Authority for all purposes of section 24.
(4) The lessee, who has been assigned any function of the Authority under sub-section (1), shall have all the powers of the Authority necessary for the performance of such function in terms of the lease.
3
Inserted by the Amendment Act of 2003
22A. Power of Authority to levy development fees at airports.-- The Authority may, after the previous approval of the Central Government in this behalf, levy on, and collect from, the embarking passengers at an airport, the development fees at the rate as may be prescribed and such fees shall be credited to the Authority and shall be regulated and utilized in the prescribed manner, for the purposes of-
(a) funding or financing the costs of upgradation, expansion or development of the airport at which the fees is collected; or
(b) establishment or development of a new airport in lieu of the airport referred to in clause (a); or
(c) investment in the equity in respect of shares to be subscribed by the Authority in companies engaged in establishing, owning, developing, operating or maintaining a private airport in lieu of the airport referred to in clause (a) or advancement of loans to such companies or other persons engaged in such activities.
As amended by the 2008 Act
22A. Power of Authority to levy development fees at airports.-- The Authority may,--
(i) after the previous approval of the Central Government in this behalf, levy on, and collect from, the embarking passengers at an airport other than the major airports referred to in clause (h) of section 2 of the Airports Economic Regulatory Authority of India Act,
3
2008 the development fees at the rate as may be prescribed;
(ii) levy on, and collect from, the embarking passengers at major airports referred to in clause (h) of section 2 of the Airports Economic Regulatory Authority of India Act, 2008 the development fees at the rate as may be determined under clause (b) of sub-section (1) of Section 13 of the Airports Economic Regulatory Authority of India Act, 2008,
and such fees shall be credited to the Authority and shall be regulated and utilized in the prescribed manner, for the purposes of--
(a) funding or financing the costs of upgradation, expansion or development of the airport at which the fees is collected; or
(b) establishment or development of a new airport in lieu of the airport referred to in clause (a); or
(c) investment in the equity in respect of shares to be subscribed by the Authority in companies engaged in establishing, owning, developing, operating or maintaining a private airport in lieu of the airport referred to in clause (a) or advancement of loans to such companies or other persons engaged in such activities.
Our conclusions with reasons:
11. The conclusion of the High Court in the impugned
judgment that the lessee of the airport has the power of the
Airports Authority under Section 22A to levy and collect
3
development fees from the embarking passengers by virtue
of sub-section (4) of Section 12A of the Act is contrary to the
legislative intent of the Amendment Act of 2003. On a
perusal of Section 22A of the 1994 Act inserted by the
Amendment Act of 2003, we find that the purposes for
which the development fees are to be levied and collected
from the embarking passengers at an airport are:
(a) funding or financing the costs of up-gradation,
expansion or development of the airports at which
the fees is collected, or
(b) establishment or development of a new airport in
lieu of the airport referred to in clause (a), or
(c) investment in the equity in respect of shares to be
subscribed by the Airports Authority in companies
engaged in establishing, owning, developing,
operating or maintaining a private airport in lieu of
the airport referred to in clause (a) or advancement
of loans to such companies or other persons
engaged in such activities.
Though Airports Authority can utilize the fees levied by it,
for all or any of these purposes mentioned in clauses (a), (b)
3
and (c) of Section 22A, what can be assigned by the Airports
Authority to a lessee under a lease entered into under
Section 12A of the 1994 Act is the power to levy fees for the
purposes mentioned in clause (a) of Section 22 A of the
1994 Act.
12. The functions of the Airports Authority under clause
(aa) of sub-section (3) of Section 12 also inserted by the
Amendment Act of 2003 to establish airports, or assist in
the establishment of private airports by rendering such
technical, financial or other assistance which the Central
Government may consider necessary for such purposes
cannot be assigned to the lessee under Section 12A of the
1994 Act. The Amendment Act of 2003 which also inserted
Section 12A therefore provides in sub-section (1) of Section
12A that the Airports Authority can make a lease of the
premises of an airport (including buildings and structures
thereon and appertaining thereto) to carry out “some” of its
functions under section 12 as the Airports Authority may,
in the public interest or in the interest of better
management of airports, deem fit. Obviously, “a lease of
premises of an airport” as contemplated in sub-section (1) of
3
Section 12A cannot include establishing an airport or
assisting in establishment of private airports as
contemplated in clause (aa) of sub-section (3) of Section 12
of the Act.
13. To enable the Airports Authority to perform its
statutory function of establishing a new airport or to assist
in the establishment of private airports, the legislature has
thought it fit to empower the Airports Authority to levy and
collect development fees as will be clear from clauses (b) and
(c) of Section 22A of the 1994 Act. Such development fees
levied and collected under Section 22A can also be utilized
for funding or financing the costs of up-gradation,
expansion and development of an existing airport at which
the fees is collected as provided in clause (a) of Section 22A
of the Act and in case the lease of the premises of an
existing airport (including buildings and structures thereon
and appertaining thereto) has been made to a lessee under
Section 12A of the Act, the Airports Authority may meet the
costs of up-gradation, expansion and development of such
leased out airport to a lessee, but this can be done only if
the rules provide for such payment to the lessee of an
3
airport because Section 22A says that the development fees
are to be regulated and utilized in the manner prescribed by
the Rules. Since the lessee of an airport cannot be assigned
the function of the Airports Authority to establish airports
or assist in establishing private airports in lieu of the
existing airports at which the development fees is being
collected, the lessee cannot under sub-section (4) of Section
12A have the power of the Airports Authority under Section
22A of the 1994 Act to levy and collect development fees.
This is because sub-section (4) of Section 12A provides that
the lessee can have all those powers of the Airports
Authority which are necessary for performance of such
functions as assigned to it under sub-section (1) of Section
12A in terms of the lease. Moreover, since we have held
that the function of establishment and development of a
new airport in lieu of an existing airport and the function of
establishing a private airport are exclusive functions of the
Airports Authority under the 2004 Act, and these statutory
functions cannot be assigned by the Airports Authority
under lease to a lessee under Section 12A of the Act, the
lease agreements, namely, the OMDA and the State Support
3
agreement could not make a provision conferring the right
on the lessee to levy and collect development fees for the
purpose of discharging these statutory functions of the
Airports Authority. We, therefore, do not think it necessary
to refer to the clauses of the OMDA and the State Support
Agreements executed in favour of the two lessees to find out
whether the right of levying and collecting the development
fees has been assigned to the lessees or not.
14. The High Court was not correct in coming to the
conclusion in the impugned judgment that the development
fees to be levied and collected under Section 22A of the
1994 Act is in the nature of tariff or charges collected by the
Airports Authority for the facilities provided to the
passengers and the airlines. It will be clear from a bare
reading of Sections 22 and 22A that there is a distinction
between the charges, fees and rent collected under Section
22 and the development fees levied and collected under
Section 22A of the 1994 Act. The charges, fees and rent
collected by the Airports Authority under Section 22 are for
the services and facilities provided by the Airports Authority
to the airlines, passengers, visitors and traders doing
4
business at the airport. Therefore, when the Airports
Authority makes a lease of the premises of an airport
(including buildings and structures thereon and
appertaining thereto) in favour of a lessee to carry out some
of its functions under Section 12, the lessee, who has been
assigned such functions, will have the powers of the
Airports Authority under Section 22 of the Act to collect
charges, fees or rent from the third parties for the different
facilities and services provided to them in terms of the lease
agreement. The legal basis of such charges, fees or rent
enumerated in Section 22 of the 2008 Act is the contract
between the Airports Authority or the lessee to whom the
airport has been leased out and the third party, such as the
airlines, passengers, visitors and traders doing business at
the airport. But there can be no such contractual
relationship between the passengers embarking at an
airport and the Airports Authority with regard to the up-
gradation, expansion or development of the airport which is
to be funded or financed by development fees as provided in
clause (a) of Section 22A. Those passengers who embark at
the airport after the airport is upgraded, expanded or
4
developed will only avail the facilities and services of the
upgraded, expanded and developed airport. Similarly, there
can be no contractual relationship between the Airports
Authority and passengers embarking at an airport for
establishment of a new airport in lieu of the existing airport
or establishment of a private airport in lieu of the existing
airport as mentioned in Clauses (b) and (c) of Section 22A of
the 1994 Act. In the absence of such contractual
relationship, the liability of the embarking passengers to
pay development fees has to be based on a statutory
provision and for this reason Section 22A has been enacted
empowering the Airports Authority to levy and collect from
the embarking passengers the development fees for the
purposes mentioned in clauses (a), (b) and (c) of Section 22A
of the Act. In other words, the object of Parliament in
inserting Section 22A in the 2004 Act by the Amendment
Act of 2003 is to authorize by law the levy and collection of
development fees from every embarking passenger de hors
the facilities that the embarking passengers get at the
existing airports. The nature of the levy under Section 22A
of the 2004 Act, in our considered opinion, is not charges or
4
any other consideration for services for the facilities
provided by the Airports Authority. This Court has held in
Vijayalashmi Rice Mills & Ors. v. Commercial Tax Officers,
Palakot & Ors. (supra) that a cess is a tax which generates
revenue which is utilized for a specific purpose. The levy
under Section 22A though described as fees is really in the
nature of a cess or a tax for generating revenue for the
specific purposes mentioned in clauses (a), (b) and (c) of
Section 22A.
15. Once we hold that the development fees levied under
Section 22A is really a cess or a tax for a special purpose,
Article 265 of the Constitution which provides that no tax
can be levied or collected except by authority of law gets
attracted and the decisions of this Court starting from The
Trustees of the Port of Madras v. M/s Aminchand Pyarelal &
Ors . (supra), cited on behalf of the Union of India and DIAL
and MIAL on the charges or tariff levied by a service or
facility provided are of no assistance in interpreting Section
22A. It is a settled principle of statutory interpretation that
any compulsory exaction of money by the Government such
as a tax or a cess has to be strictly in accordance with law
4
and for these reasons a taxing statute has to be strictly
construed. As observed by this Court in Ahmedabad Urban
Development Authority v. Sharadkumar Jayantikumar
Pasawalla & Ors. (supra), it has been consistently held by
this Court that whenever there is compulsory exaction of
money, there should be specific provision for the same and
there is no room for intendment and nothing is to be read or
nothing is to be implied and one should look fairly to the
language used. Looking strictly at the plain language of
Section 22A of 1994 Act before its amendment by the 2008
Act, the development fees were to be levied on and collected
from the embarking passengers “at the rate as may be
prescribed”. Since the rules have not prescribed the rate at
which the development fees could be levied and collected
from the embarking passengers, levy and collection of
development fees from the embarking passengers was
without the authority of law. For this conclusion, we are
supported by the Constitution Bench judgment of this Court
in Mohammad Hussain Gulam Mohammad & Anr. v. The
State of Bombay & Anr. (supra). In that case, the Court
found that Section 11 of the Bombay Agricultural Produce
4
Markets Act, 1939 provided that the market committee may
levy market fees subject to the maxima as prescribed and
the Court held that unless the State Government fixes the
maxima by rule, it is not open to the committee to fix any
fees at all. We are also supported by the decision of a three
judges Bench of this Court which held in Dhrangadhra
Chemical Works Ltd. v. State of Gujarat & Ors. (supra) that
the mandatory provision in Section 60(a)(ii) of the Bombay
Municipalities Act, 1901 requiring framing of rule for
imposition of tax not having been complied with, the
imposition of tax was illegal. In Principles of Statutory
Interpretation, 12th Edition, at Page 813, Justice G.P. Singh
states:
“There are three components of a taxing statute, viz., subject of the tax, person liable to pay the tax and the rate at which the tax is levied. If there be any real ambiguity in respect of any of these components which is not removable by reasonable construction, there would be no tax in law till the defect is removed by the legislature.”
Thus, the rate at which the tax is to be levied is an essential
component of a taxing provision and no tax can be levied
until the rate is fixed in accordance with the taxing
4
provision. We have, therefore, no doubt in our mind that
until the rate of development fees was prescribed by the
Rules, as provided in Section 22A of the 1994 Act,
development fees could not be levied on the embarking
passengers at the two major airports.
16. The High Court, in our considered opinion, was not
correct in coming to the conclusion in the impugned
judgment that the exercise of the power to levy and collect
development fees under Section 22A was not dependent on
the existence of the rules and, therefore, this power could be
exercised even if the rules have not been framed prescribing
the rate of development fees under Section 22A of the 1994
Act. The High Court has relied upon the decision of this
Court in U.P. State Electricity Board, Lucknow v. City Board,
Mussorie & Ors. (supra). In that case, the High Court was
called upon to interpret Section 46(1) of the Electricity
(Supply) Act, 1948, which provided that a tariff to be known
as the Grid Tariff shall, in accordance with any regulations
made in this behalf, be fixed from time to time by the Board.
The High Court held that it only provides that the Grid Tariff
shall be in accordance with any regulations made in this
4
behalf and that means that if there were any regulations,
the Grid Tariff should be fixed in such regulations and
nothing more and, therefore, the framing of regulations
under Section 70(h) of the Act cannot be a condition
precedent for fixing the Grid Tariff. The language of Section
22A of the 1994 Act is different. It clearly states that the
Airports Authority may levy on and collect from the
embarking passengers at the airport the development fees at
the rate as may be prescribed. Hence, unless the rate is
prescribed by the rules, the Airports Authority cannot
collect the development fees.
17. The High Court has also relied on the decision of this
Court in Mysore Road Transport Corporation v. Gopinath
Gundachar Char (supra). In that case, the Court was called
upon to interpret the provisions of the Road Transport
Corporations Act, 1950. Section 45(1) of that Act provided
that a Corporation may, with the previous sanction of the
State Government, make regulations, not inconsistent with
the Act and the rules made thereunder, for the
administration of the affairs of the Corporation and in
particular, providing for the conditions of appointment and
4
service. The Court has held that in the absence of
regulations framed under Section 45 laying down the
conditions of service, the Corporation can still appoint
officers or servants as may be necessary for the efficient
performance of its duties on such terms and conditions as it
thinks fit and it cannot be held that unless such regulations
are framed under Section 45, the Corporation would have
no power to appoint officers and servants and fix the
conditions of service of its officers and servants. From the
language of Section 22A of the 1994 Act, on the other hand,
we find that there is no room whatsoever for the Airports
Authority to levy and collect any development fees except at
the rate prescribed by the Rules.
18. The High Court has also relied on the decision of this
Court in Sudhir Chandra Nawn v. Wealth-Tax Officer,
Calcutta & Ors. (supra). In that case, Section 7(1) of the
Wealth Tax Act, 1957 was challenged as ultra vires the
Parliament on inter alia the ground that no rules were
framed in respect of the valuation of lands and buildings
and this Court repelled the challenge and held that Section
7 only directs that the valuation of any asset other than
4
cash has to be made subject to the rules and does not
contemplate that there shall be rules before an asset can be
valued and failure to make rules for valuation of a type of
asset cannot therefore affect the vires of Section 7. In
Section 22A of the 1994 Act, on the other hand, the levy or
development fees was to be at the rate as prescribed by the
Rules and hence could not be made without the rules. All
other decisions starting from T. Cajee v. U. Jormanik Siem &
Anr. cited on behalf of the Union of India, DIAL and MIAL on
this point are cases where the statutory power could be
exercised without the rules or the regulations, whereas the
power under Section 22A of the 1994 Act to levy
development fees could not be exercised without the rules
prescribing the rate at which development fees was to be
levied.
19. Section 22A of the 1994 Act before its amendment by
the 2008 Act specifically provided that the development fees
may be levied and collected at the rate as may be prescribed
by the rules. Hence, the rate of development fees could not
be determined by the Central Government in the two letters
dated 09.02.2009 and 27.02.2009 communicated to DIAL
4
and MIAL respectively. Under section 22A of the 1994 Act,
the Central Government has only the power to grant its
previous approval to the levy and collection of the
development fees but has no power to fix the rate at which
the development fees is to be levied and collected from the
embarking passengers. Hence, the levy and collection of
development fees by DIAL and MIAL at the rates fixed by the
Central Government in the two letters dated 09.02.2009
and 27.02.2009 are ultra vires the 1994 Act and the two
letters being ultra vires the 1994 Act are not saved by
Section 6 of the General Clauses Act, 1897.
20. After the amendment of Section 22A by the 2008 Act
with effect from 01.01.2009, the rate of development fees to
be levied and collected at the major airports such as Delhi
and Mumbai is to be determined by the Regulatory
Authority under clause (b) of sub-section (1) of Section 13 of
the 2008 Act and not by the Central Government. The
Regulatory Authority constituted under the 2008 Act has
already issued a public notice dated 23.04.2010 permitting
DIAL to continue to levy the development fees at the rate of
Rs.200/- per departing domestic passenger and at the rate
5
of Rs.1,300/- per departing international passenger with
effect from 01.03.2009 on an ad hoc basis pending final
determination under Section 13 of the 2008 Act. This
public notice dated 23.04.2010 has been issued by the
Regulatory Authority under the 2008 Act long after the
impugned decision of the High Court upholding the levy and
it has not been challenged by the appellants. Hence, the
question of examining the validity of the said public notice
dated 23.04.2010 issued by the Regulatory Authority
pertaining to levy and collection of development fees by
DIAL does not arise. But no such public notice has been
issued by the Regulatory Authority under the 2008 Act
pertaining to levy and collection of development fees by
MIAL. Hence, MIAL could not continue to levy and collect
development fees at the major airport at Mumbai and
cannot do so in future until the Regulatory Authority passes
an appropriate order under Section 22A of the 1994 Act as
amended by the 2008 Act.
21. Having held that the levy and collection of
development fees by DIAL and MIAL at the rates fixed by the
Central Government in the two letters dated 09.02.2009
5
and 27.02.2009 are ultra vires the 1994 Act and that MIAL
could not continue to levy and collect of development fees at
the major airport at Mumbai without an appropriate order
passed by the Regulatory Authority, the question is whether
there is need to pass any consequential direction for refund
of the development fees collected by DIAL and MIAL
pursuant to the two letters dated 09.02.2009 and
27.02.2009 of the Central Government and the development
fees levied and collected by MIAL after the amendment of
Section 22A by the 2008 Act.
22. This Court has held in M/s Orissa Cement Ltd. v. State
of Orissa (AIR 1991 SC 1676) that a finding regarding the
invalidity of a levy need not automatically result in a
direction for a refund of all collections thereof made earlier
and that the Court has, and must be held to have, a certain
amount of discretion to grant, mould or restrict the relief in
a manner most appropriate to the situation before it in such
a way as to advance the interests of justice. In the facts of
this case, the development fees have been collected by DIAL
and MIAL on the basis of the two letters dated 09.02.2009
and 27.02.2009 of the Central Government from the
5
embarking passengers at Delhi and Mumbai and these
embarking passengers, from whom the development fees
have been collected, cannot now be identified nor can they
be traced for making the refund to them. Further there is
significantly no prayer for refund in any of the three writ
petitions. However, it is necessary to ensure that the
development fees levied and collected are utilized only for
the specific purposes mentioned in Section 22A of the 1994
Act. In our considered opinion, interests of justice would be
met if DIAL and MIAL are directed to account to the Airport
Authority that the development fees so far levied and
collected by them have been utilized for the purposes
mentioned in clause (a) of Section 22A of the 1994 Act.
5
Reliefs:
23. In view of the foregoing, we allow these appeals as
follows:
(i) We hold that development fees could not be levied and
collected by the lessees of the two major airports,
namely, DIAL and MIAL, on the authority of the two
letters dated 09.02.2009 and 27.02.2009 of the
Central Government from the embarking passengers
under the provisions of Section 22A of the 1994 Act.
(ii) We declare that with effect from 01.01.2009, no
development fee could be levied or collected from the
embarking passengers at major airports under Section
22A of the 1994 Act, unless the Airports Economic
Regulatory Authority determines the rates of such
development fee.
(iii) We direct that MIAL will henceforth not levy and collect
any development fee at the major airport at Mumbai
until an appropriate order is passed by the Airports
Economic Regulatory Authority under Section 22A of
the 1994 Act as amended by the 2008 Act.
5
(iv) We direct that DIAL and MIAL will account to the
Airports Authority the development fees collected
pursuant to the two letters dated 09.02.2009 and
27.02.2009 of the Central Government and the
Airports Authority will ensure that the development
fees levied and collected by DIAL and MIAL have been
utilized for the purposes mentioned in clause (a) of
Section 22A of the 1994 Act.
(v) We further direct that henceforth, any development
fees that may be levied and collected by DIAL and
MIAL under the authority of the orders passed by the
Airports Economic Regulatory Authority under Section
22A of the 1994 Act as amended by the 2008 Act shall
be credited to the Airports Authority and will be
utilized for the purposes mentioned in clauses (a), (b)
or (c) of Section 22A of the 1994 Act in the manner to
be prescribed by the rules which may be made as early
as possible.
(vi) Nothing stated herein shall come in the way of any
aggrieved person challenging the public notice dated
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23.04.2010 issued by the Airports Economic
Regulatory Authority in accordance with law.
(vii) The impugned judgment of the High Court is set aside
and the Writ Petitions filed by the appellants are
allowed with these directions.
(viii) There shall be no order as to costs.
(ix) I.A. No.3 in Civil Appeal arising out of S.L.P. (C)
No.23541 of 2009 for impleadment stands rejected.
.……………………….J. (R. V. Raveendran)
………………………..J. (A. K. Patnaik) New Delhi, April 26, 2011.
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