Bombay High Court
Mr. D.M. Ranadive & Ors vs Airport Authority Of India & 2 Ors on 22 December, 2017
Bench: A.S. Oka
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO. 2430 OF 1996
1. Dilip Madhusudan Ranadive
Adult Indian Inhabitant, Residing at D/21,
Balgovind Cooperative Housing Society,
Taikalwadi Road, Mahim, Mumbai- 400 016.
2. Mr.Pradip Madhusudan Ranadive,
Adult, Indian Inhabitant, residing at D/21,
Balgovind Cooperative Housing Society,
Taikalwadi Road, Mahim, Mumbai- 400 016.
3. M/s.Randive, A Partnership firm consisting
of Petitioners 1 and 2 as the only partners
and having its office at D/21,
Balgovind Cooperative Housing Society,
Taikalwadi Road, Mahim, Mumbai- 400 016. ... Petitioners.
V/s.
1. Airports Authority of India,
A statutory Corporation constituted under the
provisions of the Airports Authority of India
Act 1994 having its office at Mumbai Airport,
Mumbai 99 and its registered office at New Delhi.
2. Mumbai International Airport Private Limited,
Chatrapati Shivaji International Airport,
1st Floor, Terminal Santacruz (East),
Mumbai- 400 099.
3. Bureau of Civil Aviation Security,
Regional Deputy Commissioner of Security,
Western Region, D/2/2, AAI Residential Colony,
Andheri Sahar Road, Mumbai- 400 099. ... Respondents.
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Ms.Snehalata Paranjpe with Mr.Amey Nabar and Mr.Gaurav Thakur
i/b. Ms.S.M.Dandekar for the petitioners.
Ms.Kavita Anchan with Mr.S.D.Shetty and Mr.Rakesh Singh, i/b.
M.V.Kini & Co. for the respondent No.1.
Mr.Pravin Samdani, Senior Advocate with Mr.Farid Karachiwala,
Ms.Sneh Mehta and Mr.Manek Chheda i/b. Wadia Ghandy & Co.
for the respondent No.2.
Mr.N.D.Sharma for the respondent No.3.
CORAM : A.S.OKA AND RIYAZ I. CHAGLA, JJ.
RESERVED ON : 21st August 2017.
PRONOUNCED ON : 22nd December 2017.
JUDGMENT :
The petitioners were carrying on business of ground handling
in respect of various international airlines at Mumbai Airport. The third
petitioner is a partnership firm of which the first and second petitioners
are partners. The first respondent has been constituted under the
Airports Authority of India Act 1994 (for short "the said Act of 1994").
The second respondent is a company. The second respondent is now
managing the airport at Mumbai. The third respondent is an a department
of the Central Government.
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2. The first respondent was charging licence fee to the
petitioners. The reason for filing the writ petition is that the first
respondent threatened to terminate the licences granted to the petitioners
and entry permits to the airport on the ground of failure of the petitioners
to supply information demanded from them and for non payment of
licence fee which was claimed with retrospective effect from 1979. The
demand was made by the first respondent by a letter dated 6 th December
1996 addressed to the third petitioner. By the said letter, the petitioners
were called upon to pay the licence fee at the rate of 2% from the year
1979 to January 1985 and at the rate of 10% from February 1985 till
March 1991. For the period commencing from 1 st April 1991, the licence
fee was demanded at the rate of 11%. The percentage specified was of
gross turnover every year. According to the case of the petitioners, the
demand for payment of licence fee was without authority of law as there
is no power to impose licence fee save and except upon instructions of the
Central Government as is clear from Section 22(ii) of the said Act of 1994.
The contention in the petitioners was that the licence fee cannot be
imposed by the Regulations of the first respondent as it is only the Central
Government which has power to impose licence fee. It is contended that
the rates of licence fee were never fixed by the Board resolutions of the
first respondent and were never published in an official gazette.
3. The petitioners had filed Writ Petition No.2277 of 1984
against the first respondent which was disposed of along with other
connected petitions. The said writ petition was inter alia filed for
challenging withdrawal of the facility of entry pass granted to the
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employees of the petitioners. In a group of petitions before this Court,
there was a challenge to the International Airports Authority of India
(General Management, Entry for ground handling of Air Transport
Services) Regulations, 1984 (for short "the said Regulations of 1984")
brought into force by a notification dated 5th June 1984 of the first
respondent and, in particular to Regulation 5(c). A portion of the
Regulation 5(c) was struck down by the Division Bench of this Court by
judgment and order dated 13th April 1984. While allowing the petition
filed by the petitioners, it was held that the petitioners were entitled to
carry on business of ground handling services at Mumbai Airport so long
as the said Regulations of 1984 were in force and subject to compliance
with the other provisions of law. This Court directed the first respondent
herein to issue entry passes to the employees of the third petitioner herein
according to law and permit them to carry on ground handling services at
Mumbai Airport in respect of all those airlines which have appointed it as
agent so long as the Regulations of 1984 were in operation. It is
contended in the present petition that at the time of hearing of the said
writ petition, no contention was raised by the first respondent that the
petitioners were liable to pay licence fee or that the first respondent was
entitled to withhold entry permits, if licence fee was not paid. Reliance is
placed on the said judgment in the writ petition filed by the petitioners.
The directives were issued by the first respondent's Chief of Commercial
Services on 3rd October 1984. Those directives gave cause of action for
filing the said earlier petition being Writ Petition No.2277 of 1984.
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4. In 62nd meeting of the Board of the third respondent held on
3rd September 1984, it is noted that earlier Regulations of 1982 have been
superseded by the said Regulations of 1984. The resolution records that
the Board approved charging of licence fee at the rate of 10% of gross
turnover from agencies providing ground handling services to airlines at
the airport.
5. By a letter dated 4th October 1995 issued by the first
respondent, the third petitioner was informed by the first respondent that
it has been decided to charge licence fee at the rate of 11% on the gross
turnover of the petitioners for providing ground handling services at
Mumbai Airport from the date on which the third petitioner has been
rendering ground handling services to the concerned airlines. The
petitioners by addressing a letter dated 28 th October 1996 informed the
Airport Director of the first respondent that the petitioners were ready and
willing to pay licence fee at the rate of 2% of the gross turnover with
effect from 4th October 1995. Accordingly, a cheque in the sum of
Rs.1,99,594.60 was forwarded with the said letter. By the said letter, it
was pointed out that various flight kitchen operators rendering services at
Mumbai Airport have not been subjected to payment of licence fee. It
was also pointed out that the first respondent has provided various
facilities to Cambatta Aviation with office space at the Airport itself.
Moreover, they have been allotted parking facility in the open area of the
airport. It was pointed out by the petitioners that they were willing to
pay licence fee at the rate which is more than 2%, provided all the
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facilities which are extended to Cambatta Aviation were extended to them.
By a letter dated 4/5th December 1996, the first respondent informed the
petitioners that the cheque was accepted without prejudice to their rights
and contentions and the amount has been adjusted towards part payment
of the dues payable by the petitioners. Certain information was
demanded from the petitioners.
6. Along with letter dated 6th December 1996, the petitioners
forwarded further amount of Rs.23,993.70 by cheque towards the licence
fee at the rate of 2% per annum. On 8 th November 1996, a letter was
addressed by the first respondent to various airlines operating at Mumbai
Airport informing them that the ground handling can be done by the
agencies mentioned in the said letter which did not include the name of
the third petitioner. Being aggrieved by the said letter, a contempt
petition being Contempt Petition No.3 of 1996 was filed by the petitioners
alleging breach of the directions issued in Writ Petition No. 2277 of 1984.
By order dated 9th December 1996, the said contempt petition was
disposed of as an unconditional apology was tendered by an officer of the
first respondent. However, the contentions of both the parties as regards
payment of licence fee were kept open.
7. As stated earlier, by a letter dated 6th December 1996 (Exh.A),
the Senior Commercial Manager of the first respondent called upon the
third petitioner to pay licence fee at the rate of 2% from 1979 to January
1985, licence fee at the 10% from February 1985 to March 1991 and from
1st April 1991 till the date of the letter at the rate of 11% along with
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interest on the delayed payment. A threat was given to terminate the
licence, if the licence fee was not paid within a period of fifteen days.
8. Along with the letter dated 6th April 1986 sent to the advocate
for the petitioners, the advocate for the first respondent had provided
minutes of the meeting of the Board of the first respondent which record
that the Board approved the charging of licence fee at the rate of 10% on
gross turnover from the agencies providing ground handling services. By
a letter dated 2nd July 1986, the advocate for the first respondent informed
the advocate for the petitioners that the petitioners should make payment
of licence fee on whatever basis as an ad hoc payment until final amount is
determined in consultation with the first respondent. By a letter dated
29th September/4th October 1995, the first respondent informed the
petitioners that it has been decided to charge to the third petitioner
licence fee at the rate of 11% of the gross turnover for providing ground
handling services at Bombay Airport. By a letter dated 3 rd October 1996,
the petitioner requested the Airport Director of the Mumbai Airport to
look into the matter and issue necessary directions for complying with the
judgment and order dated 13th April 1994 in Writ Petition No.2277 of
1984.
9. This writ petition was originally filed for challenging the
demand of licence fee made by the letter dated 6 th December 1986
(Exhibit A to the petition).
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10. In this writ petition, on 23rd December 1996, this Court
granted interim relief in terms of prayer clauses (b) and (c) subject to
petitioners undertaking to regularly pay future licence fee at the rate of
11% on the gross turnover with effect from January 1997 and also paying
a sum of Rs.15 lakh in two equal installments of Rs.7,50,000/- each
payable on 30th June 1997 and 31st December 1997 respectively. In the
meanwhile, the first respondent came out with the Airports Authority of
India (General Management and Entry for Ground Handling Services)
Regulations, 2000 (for short "the said Regulations of 2000"). It appears
that in the 58th Board meeting of the first respondent held on 26 th
December 2001, it was decided to charge 11% royalty on gross turnover
from the existing ground handling agents pending final decision on award
of fresh contracts. Another important development took place when the
second respondent, which is a limited company, took over the
management of Mumbai Airport on the basis of the execution of following
documents: (1) Operation Management and Development Agreement
dated 4th April 2006 (for short "OMDA"); (2) Shareholders Agreement
dated 4th August 2001; (3) Lease Deed dated 26th April 2006; (4) State
Support Agreement with Government of India; (5) State Support
Agreement with Government of Maharashtra. The second respondent
issued a circular dated 21 st June 2007 enhancing the royalty from 11% to
15% of gross turnover in respect of ground handling agencies with effect
from 1st July 2007. Even after the second respondent came into picture,
the petitioners continued to pay an amount at the rate of 11% to the first
respondent under the orders of this Court. By order dated 11 th February
2009, in the Notice of Motion No.73 of 2009 taken out by the petitioners,
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the Division Bench of this Court granted four weeks time to pay royalty at
the enhanced rate (i.e. 15%). An email dated 3 rd February 2009 was
issued by the Senior Commercial Manager on behalf of the Airport
Director (Commercial) recording that passes to the employees of the third
petitioner will be renewed only until 3rd February 2009. By the said order
dated 11th February 2009 the said email was stayed.
11. One more notice of motion was taken out by the petitioners
being Notice of Motion No.156of 2009. By order dated 13 th March 2009,
the Division Bench directed the second respondent to continue giving No
Objection Certificate (NOC) to the employees of the third petitioner till
further orders. The petitioners were directed to pay licence fee at the
rate of 15% of the gross turnover directly to the second respondent
instead of first respondent. The said notice of motion taken out by the
petitioners was disposed in terms of the minutes of the order dated 9 th
April 2009 by which the petitioners were directed to pay charges/ licence
fees to the second respondent as per the policies of the second respondent.
The second respondent was directed to give NOC in favour of the
petitioners and their employees to the Bureau of Civil Aviation Security
(the third respondent) for renewal of entry passes.
12. In supersession of the said Regulations of 2000, on 18 th
October 2007 the first respondent brought into force the Airports
Authority of India (General Management, Entry for Ground Handling
Services) Regulations of 2007 (for short "the Regulations of 2007"). The
said Regulations were brought into force from 1st October 2007.
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13. In this petition, it is pointed out that during the pendency of
the petition, the second respondent continued to demand and recover
from the petitioners licence fee by terming it as "royalty/ revenue share/
damage charges" from time to time. According to the case of the
petitioners, the illegal demand increased from 11% to 15% and thereafter
to 17.5% and 30% respectively which have been paid by the petitioners
under protest.
14. The first prayer in this petition under Article 226 of the
Constitution of India is for quashing the letter dated 6 th December 1996
by which a demand of licence fee was made from the petitioners. The
second challenge by way of amendment is to the circular dated 21 st June
2007 issued by the second respondent by which royalty was enhanced
from 11% to 15% with effect from 1st July 2007. There is a prayer made
against the first and second respondents to refund the amount paid by the
petitioners to them with an interest at the rate of 12% per annum.
15. There is a reply filed to the petition by Shri Ashok Arora on
behalf of the first respondent. Various contentions have been raised in
the reply. The first contention is that the petitioners unilaterally paid
licence fee at the rate of 2% of gross turnover from July 1986 to December
1986. The said amount was paid unilaterally and thereafter, the amounts
were paid by the petitioners from time to time. In the reply, Shri Arora
has contended that the said Regulations of 1984 provided for levy of fees
on parties providing ground handling services. Reliance is placed on the
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Board Resolution passed in 62nd meeting wherein the rate of fee at the rate
of 10% of gross turnover was fixed. In the affidavit, the factual
averments made by the petitioners in relation to Cambatta Aviation and
Air Freight Ltd. have been referred. A copy of a letter dated 28 th
November 1996 addressed to the Accounts Manager (Rev) of the first
respondent by Cambatta Aviation Limited is relied upon under which
ground handling charges payable at the rate of 11% were paid. A copy of
licence agreement between the first respondent and Air Freight Limited
has been annexed to the said affidavit.
16. The first petitioner filed a rejoinder to the affidavit of Shri
Arora. Reliance is placed on the letter dated 15 th April 1996 addressed by
Deputy General Manager (Com.) of the first respondent to the Airport
Director enclosing therewith note prepared by the Director of Indian Audit
and Accounts Department regarding non-raising of bills for ground
handling charges. It is alleged that no ground handling charges have
been recovered from the National Carriers till the date of filing of the
petition. It is contended that though resolution was passed by the Board
of Directors of the first respondent on 26 th December 2001 by which it was
resolved to charge licence fee at the rate of 11% of gross turnover, a
demand was made from the petitioners for the said amount with effect
from 1st April 1991. It is contended that even initial rate of 2% is not
sanctioned by the Board Resolution. It is contended that the amount paid
at the rate of 2% of gross turnover was without prejudice to the rights and
contentions of the petitioners.
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17. There is reply filed by Shri Raghava M. on behalf of the
second respondent. Shri Raghava M. is the General Manager-Legal and
authorized representative of the second respondent. The first contention
raised is that the first respondent is a private entity and, therefore, a writ
under Article 226 of the Constitution of India cannot be issued against the
second respondent. It was further contended that with a view to enable
the second respondent to discharge its functions under OMDA, a
registered lease-deed dated 26th April 2006 has been entered into by and
between the first respondent and the second respondent. Reliance is also
placed on supplemental lease dated 15 th May 2009. It is contended that
the second respondent is neither a State nor an agency or instrumentality
of the State. It is contended that the second respondent has a power to
impose a licence fee/royalty on ground handling agencies using the
premises of Mumbai Airport. It is contended that the circular dated 21 st
June 2007 issued by the second respondent by which percentage of
licence fee/ royalty payable by all the ground handling agencies was
increased from 11% to 15% is legal. It is contended that the second
respondent has been authorized under the OMDA to license the premises
of the Mumbai Airport for carrying out certain functions. Reliance is
placed on various provisions of OMDA and contended that under the
relevant clauses thereof, the second respondent has right and control over
the Mumbai Airport for the purpose of non-aeronautical services.
Reliance is placed on interim orders passed from time to time in the
petition and, in particular the order dated 9 th April 2009 in Notice of
Motion No.156/2009 of which we have already made reference. The
second respondent has placed reliance on Aeronautical Information
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Circular (AIC) Nos.7 of 2007 and 3 of 2010 which authorised the second
respondent to engage ground handling service providers on the basis of
revenue sharing. The first petitioner filed a rejoinder to the affidavit in
reply of the second respondent.
18. The learned counsel appearing for the petitioners has taken
us through the pleadings and documents on record. As far as preliminary
objection of second respondent regarding maintainability of the writ
petition against the second respondent is concerned, she invited our
attention to the decision of a Division Bench of this Court in the case of
Federation of Indian Airlines v. Airports Authority of India 1. She
pointed out relevant paragraphs of the decision which hold that
considering the relevant clauses of OMDA, the second respondent is
amenable to writ jurisdiction under Article 226 of the Constitution of
India. She invited our attention to the International Airports Authority
Act, 1971 (for short "the said Act of 1971') and, in particular Section 17
thereof. She relied upon clause (i) of Section 17. Our attention was also
invited to section 22 of the said Act of 1994. She submitted that the first
respondent is not empowered to charge any fees or rent without previous
approval of the Central Government and in the present case, there is
nothing placed on record to show that the rate of fees was fixed at 2%,
10%, 11% and 15% respectively with previous approval of the Central
Government. She invited our attention to the said Regulations of 1984
and the said Regulations of 2000. She invited our attention to the
definition of "ground handling" in both the said Regulations. She also
1 2016 SCC OnLine Bom 11521
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pointed out the guidelines issued for grant of permit to provide ground
handling services at airports other than those belonging to the Airport
Authority of India. She submitted that the levy attempted to be made by
the first and second respondents is in the nature of tax. She also pointed
out the pleadings regarding discrimination between certain other private
agencies and the present petitioners. She tendered across the bar a
statement showing the amounts so far paid by the petitioners to the first
respondent which are also set out in the petition and in the rejoinder filed
by the petitioners. She relied upon the decision of Calcutta High Court in
the case of Netram Agarwalla and others v. Chairman, Raigunj
Municipality and others2. She relied upon the said decision on the
question whether the levy made by the first and second respondents was a
tax or fee. She relied upon the decision of the Apex Court in the case of
Sreenivasa General Traders v. State of Andhra Pradesh 3. Reliance was
placed on the said decision as it lays down the test for determination
whether a particular levy is a tax or fee. On the same point, she relied
upon another decision of the Apex Court in the case of State of
Jharkhand and others v. Tata Commins Ltd. and another 4. She
invited our attention to the decision of the Apex Court in the case of
Consumer Online Foundation and others v. Union of India and other 5.
This decision is on interpretation of section 22 of the said Act of 1994.
The learned counsel appearing for the petitioners also relied upon the
decision of the Apex Court in the case of Binayak Swain v. Ramesh
2 1955 SCC OnLine Cal 177
3 (1983) 4 SCC 353
4 (2006) 4 SCC 57
5 (2011) 5 SCC 360
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Chandra Panigrahi6. She relied upon another decision of the Apex Court
in the case of C.K.Sasakan v. Dhanalakshmi Bank Ltd.7 On the prayer
for the refund of the amounts paid, the learned counsel for the petitioners
relied upon what is held by the Constitution Bench of the Apex Court in
the case of Mafatlal Industries Ltd. v. Union of India8.
19. The learned counsel appearing for the second respondent
invited our attention to the various clauses of OMDA and, in particular
clause dealing with aeronautical and non-aeronautical services. He
pointed out specific clause (12.2) in Chapter-12 which confers powers on
the second respondent to fix the charges for non-aeronautical services.
He pointed out the various non-aeronautical services mentioned in
Schedule-6 of OMDA. He also pointed out provisions of the lease-deed
executed by and between the first and second respondents. He invited
our attention to the affidavit-in-reply of the second respondent as also the
affidavit of Shri S.V.Ramana filed on behalf of the Ministry of Civil
Aviation of Government of India in Special Leave Petition (C)
No.33863/2016. He pointed out the stand taken by the Union of India as
regards the provisions of Sections 12 and 22 of the said Act of 1994 and,
in particular clause (ii) of Section 22 thereof. He submitted that clause
(ii) deals with non-aeronautical services as it concerns the facility for
carrying on any trade or business at airport, heliport or airstrip. He
submitted that for charging fees or rent for such services, prior approval of
the Central Government is not necessary. He submitted that as clause (ii)
6 AIR 1966 SC 948
7 (2009) 11 SCC 60
8 (1997) 5 SCC 536.
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covers ground handling services, the first respondent and the second
respondent have power to levy ground handling charges. He also
pointed out that the petitioners have discontinued their operation at the
Mumbai Airport from 31st March 2015 as set out in the affidavit-in-reply.
He relied upon the said Regulations of 2000 and guidelines bearing
No.AIC 07/2007. He relied upon the minutes of order dated 9 th April
2009.
20. The learned counsel appearing for the first respondent
supported the impugned action. One of the submissions of the first
respondent and the second respondent, without prejudice to their rights
and contentions, is that in any event, the petitioners are not entitled to
refund as the same would amount to unjust enrichment. The learned
counsel appearing for the petitioners, relying upon the interim orders,
submitted that there is no question of unjust enrichment. The learned
counsel appearing for the third respondent supported the first and the
second respondents.
21. Firstly, we deal with the preliminary objection raised by the
second respondent about the maintainability of writ petition against the
second respondent. The said issue is no longer res integra as a Division
Bench of this Court in the case of Federation of Indian Airlines v.
Airports Authority of India and others (supra) has already decided this
issue. The second respondent herein was also the second respondent in
the said case. Paragraphs- 84 and 85 of the said judgment which deals
with the same objection read thus:
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"84. The source of the power to impose airport levy, to
collect and recover it, is traced to the statute, namely, The
Airports Authority of India Act. It is the statute which
empowers the AAI to execute the lease bearing in mind the
object and purpose for which the Act itself is made and the
discretion under section 12-A(1) is conferred. The
discretionary power to make a lease is to be exercised in
the public interest or in the interest of better management
of airports. Thus, absent these provisions, on the own
showing of the respondent No.2, there could not have been
any OMDA. If there could not have been OMDA, there
could not have been then taking over of some of the
functions of respondent No.1. These functions are defined
in the statute and to be performed in accordance with the
statute. It is relying upon these statutory provisions and
prescription therein that the levy is sought to be justified.
Therefore, it is too late in the day to contend that the issue
involved in this writ petition is not a public law question,
but in the realm of private law. We do not think how the
second respondent could have stepped in, but for the above
scheme noticed by us in detail. Thus, bearing in mind the
broad object and purpose of the AAI Act, the amendments
thereto and the aviation scheme and aviation policy as a
whole that second respondent enters the scene and takes
over these functions. It has to perform them and while
performing them it cannot override the statute. The lease
agreement itself cannot be read de hors the statute. Once
the functions and duties traceable to the statute are to be
performed and discharged, then, it is futile to urge that
MIAL is not answerable to this Court's writ jurisdiction.
This is not a private airport or an airport set up by the
respondent No.2. The airport was already in existence and
various functions were performed thereat in terms of this
statute of 1994. That the amendment permits leasing and
for the purpose of preserving and protecting public interest
or better management of airports, then, it would not be
proper to agree with Mr. Tulzapurkar that a writ petition
cannot be filed and raising the above challenge.
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85. Mr. Tulzapurkar's reliance on Article 12 of the
Constitution of India is not proper for Article 226 of the
Constitution of India empowers this Court to issue a writ in
terms thereof to any person or authority, including in
appropriate cases, any Government, for the enforcement of
any of the rights conferred by Part III and for any other
purpose. Part III of the Constitution of India contains
Articles 12 to 35. The right to equality guaranteed by
Articles 14 to 18, the right to freedom guaranteed by
Articles 19 to 22, the right against exploitation, the right to
freedom of religion, constitutional and educational rights
and right to constitutional remedies. Therefore, for
enforcement of any of the rights conferred by Part III and
for any other purpose, a writ can be issued. Once a petition
under Article 226 of the Constitution of India is filed
raising the plea that the AAI Act being claimed to be the
source of the levy, but that Act not permitting the
imposition or the levy being beyond it, then, definitely the
rights and which are in issue, include the one flowing from
Article 14 of the Constitution of India. That guarantees
equality before law and equal protection of laws. If there is
no equality before law, as alleged, and subsequently proved
or if equal protection of laws is denied though extended to
similarly affected or placed parties, then, this Court will not
hold its hands and refuse to issue the prerogative writs. Its
power is very wide and in terms of this Article. Merely
because MIAL claims to be a private entity is no answer to
resist this petition. Going by the issues projected and
involved, we are of the firm opinion that the writ petition
raises a public law question. The entity may be private, but
the question involved is a public law one. That is about the
right or the power to impose the levy styled as airport levy
on the airline operators. They claim that for certain services
which are not rendered at the airport by them, the Airports
Authority of India and, through it, the MIAL has no power,
authority and jurisdiction to impose the levy. The statute
does not permit such imposition is the essential contention.
The levy is beyond the statutory powers and that is being
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recovered by misconstruing and misinterpreting the legal
provisions. To now then urge that the MIAL grants a
privilege and, therefore, all this is in the realm of a contract
does not impress us. Mr. Tulzapurkar's arguments are that
the levy is on those airlines who provide food and
beverages in flights. They apply to MIAL for a privilege for
carrying on the business of supplying food and beverages
to the passengers on-board the flight. There is no
compulsion to provide food to passengers inflight, but still
a privilege like this is sought from MIAL. However, Mr.
Tulzapurkar emphasizes that MIAL is entitled to prescribe
charges, fees or rent for this privilege."
(underline supplied)
In paragraph-86, the Division Bench held thus:
"86. Though this is an alternate argument, what
Mr.Tulzapurkar emphasizes is that this entitlement and
empowerment comes from certain authorisation. That is in
terms of the primary document styled as lease deed. It also
comes from several ancillary and connected documents
and deeds. However, the foundation for all this is the AAI
Act, 1994, and the functions discharged in pursuance
thereof. It is in these circumstances that we hold that the
management and administration of an airport meant for
passengers and cargo carried by airline companies is the
function discharged and duty performed. That is not under
any private arrangement. It is futile to urge that everything
in relation to the administration, management and
operation of the airport is in the realm of a contract or
private law. That extreme contention has not been
canvassed. The only argument is that the larger issue
about maintainability of the writ petition against MIAL is
pending and we should observe nothing by which the
stand of the MIAL in such proceedings is affected or
jeopardized. We hasten to add that we have no such intent
nor as a blanket proposition are we suggesting that the
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MIAL in all times and under all circumstances is amenable
to writ jurisdiction. Just as Mr. Tulzapurkar relies upon
paragraph 102 of the judgment in the case of Life
Insurance Corporation of India vs. Escorts Limited & Ors.
(1986) 1 SCC 264, we are mindful that the Supreme Court
has clarified that it is impossible to draw a distinction and
even the Hon'ble Supreme Court has not attempted it.
Such questions must be decided in each case with
reference to the particular action, the activity in which the
State and the instrumentality of the State is engaged when
performing the action, the public law or private law
character of the action and a host of other relevant
circumstances. This is the precise test which is evolved by
the Hon'ble Supreme Court which we are bound to apply.
Having applied that, we do not think that the larger issue
with reference to Article 12 of the Constitution of India
could in any way be decided by us. We confine ourselves to
the action in this case which we think is purely in the
realm of public law. To hold that it has only a private law
character would mean ignoring a host of other relevant
circumstances. These circumstances are that the airline
companies and their Federation has, in impugning and
challenging the decision or action of respondent Nos.1 and
2, impleaded both of them. Secondly, it is their argument
that the power which the second respondent relies on is
derived from the first respondent and the document
executed or the transactions entered into between
respondent Nos.1 and 2. Respondent No.1 certainly
performs a public duty and a public function. It is obliged
to act in public interest. Equally, when it passes on or
allows some functions to be discharged by a third party
that is also obliged to act in public interest and confine
itself to the law. That is referable to section 12-A. Thirdly,
if some of the functions of AAI in public interest are being
discharged by the MIAL and one of the important
stakeholder in the scheme of the operations, maintenance
and administration of the airport is the airline company,
for boarding the aircraft of whom, the passengers arrive at
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the airport terminal, then, any action affecting the working
of these companies and which thereafter impacts or affects
the passengers themselves cannot be, therefore, considered
only to be a private law function or duty. Lastly, and most
importantly, it is the same statute, namely, the AAI Act,
1994, which is relied upon by the second respondent to
claim the authority and power to impose the airport levy
and collect it and it is that very statute on which the
argument of the petitioner is based, namely, its provisions
do not empower collection of such levy which we are
considering and, therefore, to determine the question of
maintainability de hors or contrary to the statute would be
impermissible. Therefore, we do not think that the writ
petition can be dismissed on the grounds of
maintainability."
(underlines supplied)
Therefore, the preliminary issue raised by the second respondent is
already concluded against the said respondent.
22. Even otherwise, the said decision which binds this Court is
material and relevant. We must note that in the said case before the
Division Bench, the challenge was to the payment demanded from various
airlines of levy of 13% of gross turnover of food items/articles which are
uplifted from Chhatrapati Shivaji International Airport, Mumbai and sold
on-board for domestic and international airlines. The Division Bench
considered Sections 12 and 12A of the said Act of 1994, which reads thus:
"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
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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;
(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;
(c) provide air safety services and search
and rescue, facilities in co-ordination with other
agencies;
(d) establish schools or institutions or
centres 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
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passengers and other persons at the 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 mange heliports and
airstrips;
(m) provide such transport facilities as
are, in the opinion of the Authority, necessary to the
passengers travelling by air;
(n) form one or more companies under
the Companies Act, 1956 (1 of 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.
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(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--
(a) authorising the disregard by the
Authority of any law for the time being in force; or
(b) authorising 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.
12-A. 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 premise
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
relate 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.
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(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 functions in terms of the lease."
It was further held that the source of power to impose airport levy, to
collect and to recover, is traceable to the said Act of 1971 and the said Act
of 1994. The Division Bench also rejected the argument canvassed on
behalf of the second respondent of acquiescence. In paragraph- 94, the
Division Bench held thus:
"94. We are unable to accept this argument of
Mr.Tulzapurkar for no amount of acquiescence or
silence can be construed as submission to the power,
authority and jurisdiction of parties like the second
respondent if there is none in law. In other words, there
is neither estoppel against law nor acquiescence or
waiver can be allowed as a defence, when the
challenge raised is to the lack of power or authority to
recover any sum or amount particularly in the nature
referred above. Lastly, we are in writ jurisdiction and
when an action is challenged as being violative of the
mandate of Article 14 and 19(1)(g), 265 of the
Constitution of India, then, all the more, the defence
raised cannot prevent the constitutional court from
adjudicating the issue or challenge."
(underline supplied)
Thereafter the Division Bench proceeded to deal with clauses (i) and (ii)
of Section 22 of the said Act 1994. In paragraph- 118, the Division Bench
held thus:
"118. After this comes clause (ii) which once again must
be seen as the power of the authority. The authority with
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due regard to the instructions that the Central Government
may give to it 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. Thus, these fees or rent is charged from persons
who are given by the authority any facility for carrying on a
trade or business at any airport. This provision once again
must be read not in isolation but harmoniously with all
other provisions of the Act falling in separate chapters and
particularly those functions which the authorities may
discharge in terms of section 12(1) and (2). The authority
thus manages the airports, civil enclaves and aeronautical
communication stations and it is expected to do all this
efficiently. It is its duty to provide air traffic service and air
transport service at any airport and civil enclave. It, in its
discretion may carry out various activities and take such
steps and measures as would enable it to provide an
efficient management and administration at the airports.
This shall be done so far as may be on business principles.
To then urge that for the services and facilities to be
provided in the above manner, the authority may charge
fees or rent from persons who are given the facility,
particularly of carrying on any trade or business at any
airport, heliport or airstrip without the previous approval
of the Central Government may be partially correct but
completely side tracking or ignoring the Central
Government would be improper and an incomplete reading
of the enactment. The Central Government may give
instructions to the AAI from time to time in relation to the
charging of fees or rent from persons, who are given any
facility for carrying on any trade or business, by the
authority. The Central Government in terms of these
instructions and its general supervising power give
instructions, but merely because specific instructions to AAI
are not on record and, therefore, there is absolute power or
authority in either the AAI or the second respondent would
mean they can fix the fees or rent without any interference
by even the Central Government. That would be doing
SKN 27/55 2430.96-wp (1)
violence to the plain and unambiguous provision of the Act,
namely the AAI Act. There may not be instructions and
expressly issued for this purpose, but the authority has to
be guided by the AAI Act itself. Its object and purpose
cannot be brushed aside so as to justify the charging of fees
or rent. We are in complete agreement with Mr. Dwarkadas
that these provisions and particularly section 22 cannot be
read as enabling levy of a charge, fees or rent. The
provision enables charging of fees or rent. They are not
independent heads and, therefore, levy of each of them is
unjustified and unsupportable. The provision cannot be
distorted and read in this manner."
(underline supplied)
In paragraph- 123, the Division Bench held thus:
"123. Therefore, to our mind, it cannot be said that the
second respondent as far as the air traffic and air traffic
operations by the airline companies are concerned, render
any facility for carrying on their trade or business. What is
contemplated by section 22 (ii) is the facility for carrying
on any trade or business. The charge of rent or fees is from
persons who are given by the authority any facility for
carrying on any trade or any business at any airport. This
facility given by the AAI to such persons and that function
in turn being taken over by the second respondent would
not take within its import the services rendered by the
airline operators to the passengers and the flying public.
The persons contemplated by clause (ii) of section 22 are
those who are carrying on trade or business at the airport.
To enable them to carry on any trade or business, facilities
are given by the AAI and which power, in turn, is now
vesting in a limited sense with the second respondent. It is
for that the fees or rent can be charged. The question raised
is whether the petitioners before us are such persons as are
contemplated and covered by this clause. We think not. We
hasten to clarify that this would not be so in all cases and in
all circumstances for the authority may charge fee or rent
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from persons who are given any facility for carrying on any
trade or business at any airport, heliport or airstrip and
such persons may include the airline companies. It is
common ground that the airline companies set up their
ticketing centres, information kiosks, booth for assisting
passengers, particularly in medical emergencies and would
use either the common facilities or some special amenities
meant for its crew and staff. The authority may be justified
in charging rent and including in it all these components.
This rent is charged essentially for use of the airport
premises for the purpose of setting up the centres, kiosks,
booths etc. Therefore, when airline companies utilise or use
the airport premises in such manner obviously if any rent is
charged they have to pay it and even to MIAL and MIAL is
so empowered to recover it."
(underline supplied)
Ultimately, as regards the authority of second respondent to levy fees, in
paragraph- 132, the Division Bench held thus:
"132. We have already and in great details referred to the
object and purpose of the AAI Act, how that is achieved by
the various provisions of which we prefer a harmonious
reading that it is only in terms of the statute that this lease
is created. The making of the lease itself is permissible on
account of the powers conferred by the statute. That is also
not absolute as we have noted above. The lease cannot
override the provisions of the Act or render them nugatory
and meaningless. No provision in the statute can be read in
isolation and its scheme rendered redundant by the process
desired by the second respondent. Therefore, OMDA is not
the source of the power. If that source is to be found it must
be found in the statutory instrument. OMDA is nothing, but
incorporating the lease that is contemplated by section 12-A
with the relevant details. The broad contents of the lease
are traceable to the statute itself. Therefore, we do not
think that the charge for non-aeronautical services and its
SKN 29/55 2430.96-wp (1)
wide definition as is found in OMDA would be the source.
If we read the OMDA de hors or by brushing aside the
statute, then, that would mean the functions and some of
them or restricted in nature having been assigned to joint
venture company of which AAI continues to be a part and
parcel, would confer independent power or authority to
charge the fee. If the statute does not invest respondent
Nos.1 and 2 to charge fees, then, no amount of reliance on
OMDA is of assistance."
(underline supplied)
23. It is in the light of the law laid down by the Division Bench
that the controversy on merits has to be decided. The first and second
respondents derive their power to levy licence fee only from the said Acts
of 1971 and 1984. The said power is not derived by the second
respondent under OMDA. Thus, the act of the first and second
respondents of imposing or levying licence fee must be supported by the
said statutory provisions.
24. In the earlier part of the judgment, we have referred to the
decision of this Court in Writ Petition No.2277/1984 filed by the
petitioners. In the said writ petition, it was noted that the third petitioner
commenced its business in the year 1979, initially of baggage handling of
Gulf Air passengers. Later on, the third petitioner started handling of
Saudi Airlines crew baggage. Thereafter, the third petitioner entered into
agreements with various airlines for ground handling services including
the services of providing wheel chairs and stretchers. In the said writ
petition, it is held by this Court that the petitioners' business will be
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governed by the Regulations of 1984. As far as business carried out of
ground handling services is concerned, the Government of India has
issued an order on 18th January 1972 in exercise of powers under rule 72A
of the Aircraft Rules, 1971 directing that no person shall enter into or
remain in the movement area for operating any vehicle or other
equipment for ground handling, ramp handling and traffic handling of any
aircraft at any Government aerodrome except as provided in paragraph-2
thereof. Clause (ii) of paragraph- 2 provides that entry into and
remaining into movement area for operating any vehicle or other
equipment for ground handing including ramp handling and traffic
handling of any aircraft shall be restricted to operator agency which was
engaged in the performance of such handling of such aircraft immediately
before the date of publication of the said order subject to such condition
as may be prescribed from time to time by the Director General of
Aviation. In relation to international airport at Mumbai, Calcutta and
Madras, the International Airports Authority of India (General
Management of Ground Handling of Air Transport Services) Regulations,
1982 were published. The said Regulations seek permit to entry into and
remaining into movement area as provided in the Government Order
dated 18th January 1972. The said Regulations of 1984 contained
similar provisions. The said Regulations of 2000 expanded the scope of
ground handling activities. Clause (e) of regulation 2 of the said
Regulations of 2000 reads thus:
"2. Definitions.- In these regulations, unless the context
otherwise requires:
(a) to (d) ..... ..... ..... ..... ..... ..... .....
(e) "Ground Handling" means
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(i) ramp handling and will include activities as
specified in Annexure 'A' to the Regulations;
(ii) traffic handling and will include activities as
specified in Annexure 'B' to the Regulations;
(iii) any other activity designated by the Chairman to
any part either of ramp handling or traffic
handling."
Annexure-A deals with ramp handling which includes aircraft handling,
aircraft servicing, aircraft cleaning. It also includes loading and
unloading of passengers' baggage, transshipment of passengers' baggage,
operation of loading/uploading equipment, loading and off loading
export, import as well as transshipment cargo from the aircraft.
Regulations 4 and 5 of the said Regulations of 2000 read thus:
" 4. Entry into and remaining in the movement
area/ terminal building at any airport/ civil enclave for
providing ground handling services or for operating any
vehicle or equipment shall be restricted to;
(a) the operator or the owner of aircraft(s) or his
bonafide whole time employees or any of the designated
agency under Regulation 3 authorised by it for handling
its own aircrafts;
(b) any other Operator or Agency who or which has
been specially permitted in writing by the Authority to
undertake ground handling activities through their
bonafide whole time employees;
(c) the bonafide whole time employees of National
Carriers or any of the designated agencies under
Regulation 3 authorised by them;
(d) the bonafide whole time employees of Airports
Authority of India or a designated agency authorized
by it.
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5. The Board of AAI will lay down terms and
conditions (including financial consideration), eligibility
criteria for ground handling agency (both financial and
technical) and number of such agencies to be appointed
at each airport keeping in view the safety, security
demand, available infrastructure, land and other relevant
consideration."
We must note here that Annexure-B to the said Regulations include
services to the passengers and baggage handling at the airport terminus.
25. A circular was issued by the Director General of Civil Aviation
on 28th September 2007 for guidance under the title "Grant of Permission
for Providing Ground Handling Services at Airports other than those
belonging to the Airports Authority of India". Clause 2A of the said
circular permits selection of ground handling service providers at
metropolitan airports at Delhi, Mumbai, Calcutta and Hyderabad.
26. The Airports Authority of India (General Management, Entry
for Ground Handling Services) Regulations, 2007 contain similar
definition of ground handling in regulation 2(e) which is similar to the
same definition in the said Regulations of 2000. Regulations 3 and 4 of
the said Regulations of 2007 are on par with the corresponding
Regulations in the said Regulations of 2000. On 2 nd June 2010, the
Director General of Civil Aviation issued guidelines (IAC) in supersession
of earlier guidelines (IAC) of 28th September 2007.
SKN 33/55 2430.96-wp (1)
27. We must note here that none of these Regulations or
guidelines which are referred above confer a specific power on the first
respondent Airports Authority of India to charge fee or rent. As stated
earlier, firstly, the said statutory power is found in section 17 of the said
Act of 1971 wherein it is provided that-
" 17. 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 air-strip.
Explanation.- In this sub-clause "aircraft" does
not include an aircraft belonging to the Indian
Defence Services and "aircraft operations" do
not include operations of any aircraft
belonging to the said Services;
b) for the amenities given to the passengers and
visitors at any airport, heliport or airstrip;
(c) for the use and enjoyment by persons of
facilities and other services provided by the
Authority at any airport, heliport or airstrip;
(ii) with due regard to the instructions that the Central
Government may give to the 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."
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The said Act of 1971 was repealed by the said Act of 1994. Section 22 of
the said Act of 1994 reads thus:
"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 Authority, from
time to time, charge fees for rent from persons who are
given by the Authority any facility for carrying on any
trade or business at any airport, heliport or airstrip."
Section 22 of the said Act of 1994 is already interpreted by a Division
Bench of this Court. In the case of Consumer Online Foundation and
another v. Union of India and others (supra), the Apex Court dealt with
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section 22 of the said Act of 1994. In paragraph 20, the Apex Court held
thus:
"20. 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 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."
(emphasis added)
As far as clause (i) of Section 22 is concerned, assuming that the same is
applicable to the ground handling services rendered by the third
petitioner, previous approval of the Central Government for fixing the
fees/ charges at 2%, 10%, 11% and 15% respectively is admittedly not
produced on record. However, clause (i) of Section 22 applies to services
or amenities offered by the first respondent or second respondent in
connection with the aircraft operations at any airport. It applies to
charging of fees or rent by the Airport Authority or the second
SKN 36/55 2430.96-wp (1)
respondent, as the case may be, from those persons for whose benefit
services or facilities as set out in the sub-clauses (a) to (d) of clause (i) are
provided by the first or second respondents. Clause (i) is not applicable
to the demand of fees from the petitioners. The petitioners have been
allowed facility to carry on business of providing ground handling services
at the Mumbai airport by the first respondent and thereafter, by the
second respondent. Thus, the power to collect licence fee or rent from the
petitioners will be under clause (ii) of section 22 and not under clause (i).
The business carried on by the ground handling services agencies on the
basis of their agreements with the airlines will be covered by clause (ii).
The second respondent on the basis of the lease executed under Section
12-A can exercise power to levy fees only under the said Act of 1994 and
not otherwise. As far as the demands subject matter of this petition are
concerned, it is not shown that the same are either contrary or
inconsistent with any instructions of the Central Government. There is no
requirement of clause (ii) of Section 22 of the said Act of 1994 or clause
(ii) of Section 17 of the said Act of 1971 to seek prior instructions of the
Central Government before charging licence fee by exercising the power
under clause (ii). The affidavit dated 11 th May 2017 of Shri S.V.Ramana
filed on behalf of the Central Government in SLP(C) No.33063 of 2016
takes the same stand. This affidavit shows that till that day, the Central
Government had not issued instructions to the contrary.
28. The issue is dealt with in paragraph- 118 of the decision of
the Division Bench in the case of Federation of Indian Airlines v.
Airports Authority of India (supra). The Division Bench has held that
SKN 37/55 2430.96-wp (1)
the Central Government may give instructions to the first respondent from
time to time in relation to charging of fees or rent from persons who are
given any facility for carrying on a trade or business at any airport by the
Authority. The Division Bench held that merely because specific
instructions given to the first respondent by the Central Government are
not on record, it does not mean that there is absolute power or authority
either in the first or second respondent. The Division Bench held that the
provisions of section 22 merely enable charging of fees or rent but the
provisions cannot be read as enabling levy of a charge, fees or rent. In
paragraph- 123, the Division Bench observed that the first respondent or
second respondent can charge rent for use of the airport premises for the
purpose of setting up the centres, kiosks, booths etc. It was observed that-
".......What is contemplated by section 22 (ii) is the
facility for carrying on any trade or business. The charge
of rent or fees is from persons who are given by the
authority any facility for carrying on any trade or any
business at any airport. This facility given by the AAI to
such persons and that function in turn being taken over
by the second respondent would not take within its
import the services rendered by the airline operators to
the passengers and the flying public. The persons
contemplated by clause (ii) of section 22 are those who
are carrying on trade or business at the airport. To
enable them to carry on any trade or business, facilities
are given by the AAI and which power, in turn, is now
vesting in a limited sense with the second respondent. It
is for that the fees or rent can be charged."
SKN 38/55 2430.96-wp (1)
29. Hence, clause (ii) of Section 22 is applicable to the petitioners
who have been allowed to carry on business of ground handling services
at the airport. Now we come back to the factual aspect of the case.
Exh.A to the petition is a letter dated 6 th December 1996 issued by the first
respondent to the third petitioner. It calls upon the petitioners to pay
licence fee at the rate of 2% (from the year 1979 to January 1985), at the
rate of 10% (from February 1985 till March 1991) and at the rate of 11%
(from 1st April 1991 up to date). A copy of the Board Resolution of the
first respondent fixing licence fee at the rate of 2% is not placed on record.
The petitioners addressed a letter dated 28 th October 1996 to the Airport
Director of Mumbai Airport in which they have specifically stated that they
are ready and willing to pay licence fee at the rate of 2% of gross turnover
with effect from 4th October 1995 when for the first time demand for
licence fee was made. In fact, a cheque representing the said amount was
forwarded along with the said letter dated 28 th October 1996. Even in the
letter dated 6th December 1996, the petitioners again expressed their
willingness to pay the amount at the rate of 2% and, in fact, an amount of
Rs.23,993.70 was forwarded along with the said letter. The resolution of
the Board of the first respondent fixing the licence fee at 2% is not placed
on record. In fact no such resolution is referred in the affidavit filed by
Shri Ashok Arora on behalf of the first respondent. But the tenor of the
letters dated 28th October 1996 and 6th December 1996 shows that the
petitioners unconditionally accepted to pay fee at the rate of 2% from 4 th
October 1995. Hence, no relief can be granted as regards the payment of
amount at the rate of 2% from 4 th October 1995. But, the petitioners are
not liable to pay at the said rate for a period prior to 4th October 1995.
SKN 39/55 2430.96-wp (1)
30. The Board of the first respondent in its 62 nd meeting held on
3rd September 1984 passed a resolution of charging licence fee of 10% of
gross turnover from the agencies providing ground handling services to
the airlines. A proposal moved before the Board is also annexed. In the
said proposal it is mentioned thus:
"7. ..... ..... Keeping in view the profitability of
ground handling services, the fee of 2 percent is considered
to be too insignificant and low. It is understood that
Singapore Air Terminal Services (SATS) are paying 10% of
their gross turn over from ground handling services to the
Singapore Airports Authority. This agreement has come
to an end the new agreement is likely to provide for even
higher share. It is proposed that IAAI may fix a licence fee
or 10% of the gross turn over as fee for permitting ground
handling services. This will be in addition to the payment
of licence fee for any specific space provided to the agency
for this purpose. This rate will apply to national carriers
as well as private agencies. There is no proposal to charge
any fee for ground handling services provided by any
airline for its own operations.
8. To sum up the following proposals are put up for
Board's approval:-
a) Acceptance in principle for IAAI to enter the business
of ground handling at international airports and
preparation of a phased programme.
b) Charging a licence fee of 10% gross turn over from
agencies providing ground handling service to airlines.
This will apply to private agencies as well as national
Carriers and shall be in addition to licence fee for any
specific space provided for the purpose."
SKN 40/55 2430.96-wp (1)
31. The demand for payment of the fees at the rate of 10% could
have been made from 3rd September 1984. But, the demand was for the
first time made from the petitioners on 6 th December 1996 with
retrospective effect from February 1985. But, the petitioners were made
aware of the Board Resolution by a letter dated 6th April 1986 addressed
by the Advocate for the first respondent to the petitioners and in fact, a
copy of the Resolution was enclosed with the said letter. But, the
petitioners never challenged the said resolution. There is no challenge to
this resolution even in this petition filed in the year 1996. Thus, there is
no merit in the challenge to the levy at the rate of 10% .
32. Exh.E is the letter dated 29th September/ 4th October 1995 by
which the third petitioner was informed by the Deputy General Manager
that it was decided to charge licence fee at the rate of 11% of gross
turnover for providing ground handling services at Mumbai Airport. In
fact, by the said letter, a demand was made for payment of licence fee at
the rate of 11% of gross turnover from the date of commencement of the
business. The first respondent in its reply has not relied upon any such
resolution passed prior to 26 th December 2001. There was no Board
decision taken as on 4th October 1995 to charge fee at the rate of 11%.
There is no reference in the said letter to any resolution passed by the
Board of the first respondent authorizing or fixing the said rate. In
absence of any such resolution, levy at the rate of 11% could not have
been made. A meeting of the Board of the first respondent was held on
26th December 2001. Exh.O-18 is a letter dated 1 st April 2002 addressed
by the General Manager (Commercial) to the Airport Director of the Indira
SKN 41/55 2430.96-wp (1)
Gandhi International Airport at New Delhi. It is stated therein that in the
Board meeting held on 26th December 2001, it was decided to charge 11%
royalty on gross turnover from the existing ground handling agents. Thus,
the rate of 11% will be applicable from 26th December 2001.
33. Now we come to the further increase made from 11% to 15%
of the gross turnover. The said circular was issued by the second
respondent on 21st June 2007 by which licence fee/ royalty was increased
from 11% to 15% with effect from 1 st July 2007. The second respondent
was well within its power to do so by virtue of clause (ii) of section 22 of
the said Act of 1994.
34. Thus, the demand for levy of licence fee at the rate of 2% of
annual turnover for a period prior to 4th October 1995 is illegal. However,
the demand of licence fee at the rate of 10% from 3 rd September 1984 is
lawful. There is no legal basis for charging the same at the rate of 11%
till 26th December 2001 as a decision was taken by the Board of the first
respondent on 26th December 2001. The second respondent is justified in
demanding the licence fee at the rate of 15% from 1 st July 2007. For any
subsequent increase, there is no specific challenge to the same in the
petition. Thus, the first respondent was entitled to recover licence fee at
the rate of 10% of the annual turnover from 3 rd September 1984 till 26th
December 2001. From 1st July 2007, the levy at the rate of 15% is
justified. The licence fee at the rate of 2% cannot be recovered for the
period prior to 4th October 1995. Once we hold this, the failure of the
first/second respondents to recover licence fee or royalty from another
SKN 42/55 2430.96-wp (1)
person at the same rates will not help the petitioners. The argument of
discrimination will not hold good. The said respondents were entitled to
charge the fees as per decisions taken on 3rd November 1984, 26th
December 2001 and 21st June 2007 (effective from 1st July 2007)
respectively.
35. Now we must deal with the other argument canvassed that
amount charged is in fact a tax and not fee. A tax is a payment for
raising general revenue and it is a burden. It is based on principle of
ability or capacity to pay as held by the Apex Court in the case of
Jharkhand and others v. Tata Commins Ltd. (supra). In the case of
Sreenivasa General Traders v. State of Andhra Pradesh (supra), the
Apex Court laid down the test of determination whether a particular
demand is a tax or a fee. Paragraphs- 31 and 32 of the said decision read
thus:
"31. The traditional view that there must be actual quid
pro quo for a fee has under gone a sea change in the
subsequent decisions. The distinction between a tax and a
fee lies primarily in the fact that a tax is levied as part of a
common burden, while a fee is for payment of a specific
benefit or privilege although the special advantage is
secondary to the primary motive of regulation in public
interest. If the element of revenue for general purpose of
the State predominates, the levy becomes a tax. In regard
to fees there is, and must always be, correlation between
the fee collected and the service intended to be rendered.
In determining whether a levy is a fee, the true test must
be whether its primary and essential purpose is to render
specific services to a specified area or class; it may be of
no consequence that the State may ultimately and
indirectly be benefited by it. The power of any legislature
SKN 43/55 2430.96-wp (1)
to levy a fee is conditioned by the fact that it must be 'by
and large", a quid pro quo for the services rendered.
However, corelationship between the levy and the services
rendered (sic or) expected is one of general character and
not of mathematical exactitude. All that is necessary is that
there should be a "reasonable relationship" between the
levy of the fee and the services rendered. If authority is
needed for this proposition, it is to be found in the several
decisions of this Court drawing a distinction between a 'tax'
and a 'fee'. Sea: The Commissioner, Hindu Religious
Endowments, Madras v. Sri Lakshmindra Thirtha Swamiar
of Sri Shirur Mutt 1954 SCR 1005: AIR 1954 SC 282: 1954
SCJ 335, H. H. Sudhundra Thirtha Swamiar v.
Commissioner for Hindu Religious and Charitable
Endowments, Mysore 1963 Supp 2 SCR 302: AIR 1963 SC
966; The Hingir-Rampur Coal Co. Ltd. v. State of Orissa
(1961) 2 SCR 537: AIR 1963 SC 459; H. H. Shri Swamiji of
Shri Admar Mutt v. Commissioner, Hindu Religious and
Charitable Endowments Department (1980) 1 SCR 368:
(1979) 4 SCC 642: 1980 SCC (Tax) 16; Southern
Pharmaceuticals and Chemicals, Trichur v. State of Kerala
(1982) 1 SCR 519: (1981) 4 SCC 391: 1981 SCC (Tax) 320
and Municipal Corporation of Delhi v. Mohd. Yasin AIR
1983 SC 617: (1983) 3 SCC 229: 1983 SCC (Tax) 154.
31. There is no generic difference between a tax and a
fee. Both are compulsory exactions of money by public
authorities. Compulsion lies in the fact that payment is
enforceable by law against a person in spite of his
unwillingness or want of consent. A levy in the nature of a
fee does not cease to be of that character merely because
there is an element of compulsion or coerciveness present
in it, nor is it a postulate of a fee that it must have direct
relation to the actual service rendered by the authority to
each individual who obtains the benefit of the service. It is
now increasingly realized that merely because the
collections for the services rendered or grant of a privilege
or licence are taken to the consolidated fund of the State
SKN 44/55 2430.96-wp (1)
and not separately appropriated towards the expenditure
for rendering the service is not by itself decisive.
Presumably, the attention of the Court in the Shirur Mutt
case was not drawn to Article 266 of the Constitution. The
Constitution no where contemplates it to be an essential
element of fee that it should be credited to a separate fund
and not to the consolidated fund. It is also increasingly
realized that the element of quid pro quo in the strict sense
is not always a sine qua non far a fee. It is needless to
stress that the element of quid pro quo is not necessarily
absent in every tax : Constitutional Law of India by H. M.
Seervai, Vol. 2, Second Edn., p. 1252, paras 22, 39."
(underline supplied)
36. The Apex Court observed that a tax is levied as a part of a
common burden, while a fee is a payment for a specific benefit or
privilege. However, co-relation between levy and service rendered or
expected should be of the general character and not of mathematical
exactitude. In the present case, initially the first respondent and
thereafter, the second respondent allowed the third petitioner to conduct
its business in the premises of the airport and earn income. The members
of the staff of the third petitioner were allowed entry inside the airport.
Therefore, there is quid pro quo between levy of licence fee and the
facility provided by the first and the second respondents. Hence, the
demand under challenge is not by way of a tax.
37. We have already referred to interim orders passed from time
to time. On the basis of the interim orders, the petitioners have deposited
the amount demanded at the rate of 10%, 11% and 15% respectively.
SKN 45/55 2430.96-wp (1)
Deposit of the amounts on the basis of interim orders/ interim orders in
terms of minutes, by no stretch of imagination can be said as admission or
waiver. Now the question is whether the petitioners are entitled to
refund. The learned counsel appearing for the petitioners relied upon the
decision of the Apex Court in the case of Mafatlal Industries Ltd. v.
Union of India (supra) and, in particular paragraph- 108 thereof.
Paragraph- 108 reads thus:
" 108. The discussion in the judgment yields the
following propositions. We may forewarn that these
propositions are set out merely for the sake of convenient
reference and are not supposed to be exhaustive. In case of
any doubt or ambiguity in these propositions, reference
must be had to the discussion and propositions in the body
of the judgment.
(i) Where a refund of tax duty is claimed on the
ground that it has been collected from the
petitioner/plaintiff - whether before the
commencement of the Central Excises and Customs
Laws (Amendment) Act, 1991 or thereafter - by
misinterpreting or misapplying the provisions of the
Central Excises and Salt Act, 1944 read with Central
Excise Tariff Act, 1985 or Customs Act, 1962 read with
Customs Tariff Act or by mis-interpreting or mis-
applying any of the rules, regulations or notifications
issued under the said enactments, such a claim has
necessarily to be preferred under and in accordance
with the provisions of the respective enactment before
the authorities specified thereunder and within the
period of limitation prescribed therein. No suit is
maintainable in that behalf. While the jurisdiction of
the High Courts under Article 226 - and of this Court
under Article 32 - cannot be circumscribed by the
provisions of the said enactments, they will certainly
have due regard to the legislative intent evidenced by
SKN 46/55 2430.96-wp (1)
the provisions of the said Acts and would exercise their
jurisdiction consistent with the provisions of the Act.
The writ petition will be considered and disposed of in
the light of and in accordance with the provisions of
Section 11-B. This is for the reason that the power
under Article 226 has to be exercised to effectuate the
rule of law and not for abrogating it.
The said enactments including Section 11-B of
Central Excises and Salt Act and Section 27 of the
Customs Act do constitute "law" within the meaning of
Article 265 of the Constitution of India and hence, any
tax collected, retained or not refunded in accordance
with the said provisions must be held to be collected,
retained or not refunded, as the case may be, under
the authority of law. Both the enactments are self-
contained enactments providing for levy, assessment,
recovery and refund of duties imposed thereunder.
Section 11-B of the Central Excises and Salt Act and
Section 27 of the Customs Act, both before and after
the 1991 (Amendment) Act are constitutionally valid
and have to be followed and give effect to. Section 72
of the Contract Act has no application to such a claim
of refund and cannot form a basis for maintaining a
suit or a writ petition. All refund claims except those
mentioned under Proposition (ii) below have to be and
must be filed and adjudicated under the provisions of
the Central Excises and Salt Act or the Customs Act, as
the case may be. It is necessary to emphasize in this
behalf that Act provides a complete mechanism for
correcting any errors whether of fact or law and that
not only an appeal is provided to a Tribunal - which is
not a departmental organ - but to this Court, which is
a civil court.
(ii) Where, however, a refund is claimed on the
ground that the provision of the Act under which it
was levied is or has been held to be unconstitutional,
such a claim, being a claim outside the purview of the
enactment, can be made either by way or a suit or by
SKN 47/55 2430.96-wp (1)
way of a writ petition. This principle is, however,
subject to an exception: where a person approaches
the High Court or Supreme Court challenging the
constitutional validity of a provision but fails, he
cannot take advantage of the declaration of
unconstitutionality obtained by another person on
another ground; this is for the reason that so far as he
is concerned, the decision has become final and cannot
be reopened on the basis of a decision on another
person's case; this is the ratio of the opinion of
Hidayatullah, C.J. in Tilokchand Motichand, (1969) 1
SCC 110: (1969) 2 SCR 824: AIR 1970 SC 898 and we
respectfully agree with it.
Such a claim is maintainable both by virtue of
the declaration contained in Article 265 of the
Constitution of India and also by virtue of Section 72
of the Contract Act. In such cases, period of limitation
would naturally be calculated taking into account the
principle underlying Clause (c) of Sub-section (1) of
Section 17 of the Limitation Act, 1963. A refund claim
in such a situation cannot be governed by the
provisions of the Central Excises and Salt Act or the
Customs Act, as the case may be, since the enactments
do not contemplate any of their provisions being
struck down and a refund claim arising on that
account. It other words, a claim of this nature is not
contemplated by the said enactments and is outside
their purview.
(iii) A claim for refund, whether made under the
provisions of the Act as contemplated in Proposition
( i ) above or in a suit or writ petition in the situations
contemplated by Proposition ( ii ) above, can succeed
only if the petitioner/plaintiff alleges and establishes
that he has not passed on the burden of duty to
another person/other persons. His refund claim shall
be allowed/decreed only when he establishes that he
has not passed on the burden of the duty or to the
extent he has not so passed on, as the case may be.
SKN 48/55 2430.96-wp (1)
Whether the claim for restitution is treated as a
constitutional imperative or as a statutory
requirement, it is neither an absolute right nor an
unconditional obligation but is subject to the above
requirement, as explained in the body of the judgment.
Where the burden of the duty has been passed on, the
claimant cannot say that he has suffered any real loss
or prejudice. The real loss or prejudice is suffered in
such a case by the person who has ultimately borne
the burden and it is only that person who can
legitimately claim its refund. But where such person
does not come forward or where it is not possible to
refund the amount to him for one or the other reason,
it is just and appropriate that that amount is retained
by the State, i.e., by the people. There is no immorality
or impropriety involved in such a proposition.
The doctrine of unjust enrichment is a just and
salutary doctrine. No person can seek to collect the
duty from both ends. In other words, he cannot collect
the duty from his purchaser at one end and also collect
the same duty from the State on the ground that it has
been collected from him contrary to law. The power of
the Court is not meant to be exercised for unjustly
enriching a person. The doctrine of unjust enrichment
is, however, inapplicable to the State. State represents
the people of the country. No one can speak of the
people being unjustly enriched.
(iv) It is not open to any person to make a
refund claim on the basis of a decision of a Court or
Tribunal rendered in the case of another person. He
cannot also claim that the decision of the
Court/Tribunal in another person's case has led him to
discover the mistake of law under which he has paid
the tax nor can he claim that he is entitled to prefer a
writ petition or to institute a suit within three years of
such alleged discovery of mistake of law. A person,
whether a manufacturer or importer, must fight his
own battle and must succeed or fail in such
SKN 49/55 2430.96-wp (1)
proceedings. Once the assessment or levy has become
final in his case, he cannot seek to reopen it nor can he
claim refund without re-opening such
assessment/order on the ground of a decision in
another person's case. Any proposition to the contrary
not only results in substantial prejudice to public
interest but is offensive to several well established
principles of law. It also leads to grave public mischief.
Section 72 of the Contract Act, or for that matter
Section 17(1)(c) of the Limitation Act, 1963, has no
application to such a claim for refund.
(v) Article 265 of the Constitution has to be
construed in the light of the goal and the ideals set out
in the Preamble to the Constitution and in Articles 38
and 39 thereof. The concept of economic justice
demands that in the case of indirect taxes like Central
Excises duties and Customs duties, the tax collected
without the authority of law shall not be refunded to
the petitioner- plaintiff unless he alleges and
establishes that he has not passed on the burden of
duty to a third party and that he has himself borne the
burden of the said duty.
(vi) Section 72 of the Contract Act is based upon
and incorporates a rule of equity. In such a situation,
equitable considerations cannot be ruled out while
applying the said provision.
(vii) While examining the claims for refund, the
financial chaos which would result in the
administration of the State by allowing such claims is
not an irrelevant consideration. Where the petitioner-
plaintiff has suffered no real loss or prejudice, having
passed on the burden of tax or duty to another person,
it would be unjust to allow or decree his claim since it
is bound to prejudicially affect the public exchequer. In
case of large claims, it may well result in financial
chaos in the administration of the affairs of the State.
(viii) The decision of this Court in STO v.
Kanhaiya Lal Mukundlal Saraf 1959 SCR 1350 AIR
SKN 50/55 2430.96-wp (1)
1959 SC 135 (1958 9 STC 747 must be held to have
been wrongly decided insofar as it lays down or is
understood to have laid down propositions contrary to
the propositions enunciated in (i) to (vii) above. It
must equally be held that the subsequent decisions of
this Court following and applying the said propositions
in Kanhaiyalal have also been wrongly decided to the
above extent. This declaration - or the law laid down
in Propositions (i) to (vii) above - shall not however
entitle the State to recover to taxes/duties already
refunded and in respect whereof no proceedings are
pending before any authority/Tribunal or Court as on
this date. All pending matters shall, however, be
governed by the law declared herein notwithstanding
that the tax or duty has been refunded pending those
proceedings, whether under the orders of an authority,
Tribunal or Court or otherwise.
(ix) The amendments made and the provisions
inserted by the Central Excises and Customs Law
(Amendment) Act, 1991 in the Central Excises and
Salt Act and Customs Act are constitutionally valid and
are unexceptionable.
(x) By virtue of Sub-section (3) to Section 11-B
of the Central Excises and Salt Act, as amended by the
aforesaid Amendment Act, and by virtue of the
provisions contained in Sub-section (3) of Section 27
of the Customs Act, 1962, as amended by the said
Amendment Act, all claims for refund (excepting those
which arise as a result of declaration of
unconstitutionality of a provision whereunder the levy
was created) have to be preferred and adjudicated
only under the provisions of the respective enactment.
No suit for refund of duty is maintainable in that
behalf. So far as the jurisdiction of the High Courts
under Article 226 of the Constitution - or of this Court
under Article 32 - is concerned, it remains unaffected
by the provisions of the Act. Even so, the Court would,
while exercising the jurisdiction under the said
SKN 51/55 2430.96-wp (1)
articles, have due regard to the legislative intent
manifested by the provisions of the Act. The writ
petition would naturally be considered and disposed of
in the light of and in accordance with the provisions of
Section 11-B. This is for the reason that the power
under Article 226 has to be exercised to effectuate the
regime of law and not for abrogating it. Even while
acting in exercise of the said constitutional power, the
High Court cannot ignore the law nor can it over-ride
it. The power under Article 226 is conceived to serve
the ends of law and not to transgress them.
(xi) Section 11-B applies to all pending
proceedings notwithstanding the fact that the duty
may have been refunded to the petitioner/plaintiff
pending the proceedings or under the orders of the
Court/Tribunal/Authority or otherwise. It must be held
that Union of India v. Jain Spinners (1992) 4 SCC 389
and Union of India v. I.T.C. 1993 Supp 4 SCC 326 have
been correctly decided. It is, of course, obvious that
where the refund proceedings have finally terminated -
in the sense that the appeal period has also expired -
before the commencement of the 1991 (Amendment)
Act (19-9-1991), they cannot be re-opened and/or
governed by Section 11-B(3) [as amended by the 1991
(Amendment) Act]. This, however, does not mean that
the power of the appellate authorities to condone
delay in appropriate cases is affected in any manner by
this clarification made by us.
(xii) Section 11-B does provide for the
purchaser making the claim for refund provided he is
able to establish that he has not passed on the burden
to another person. It, therefore, cannot be said that
Section 11-B is a device to retain the illegally collected
taxes by the State. This is equally true of Section 27 of
the Customs Act, 1962."
(underlines supplied)
SKN 52/55 2430.96-wp (1)
What is held by the Apex Court is in the context of illegal collection of tax.
By order dated 23rd December 1996, the learned single Judge of this Court
granted interim relief subject to condition of petitioners regularly paying
licence fee at 11% of gross turnover. By further order dated 11 th February
2009 in Notice of Motion No.73/2009, the petitioners were granted time
of four weeks to pay licence fee at the enhanced rate from 1 st July 2007.
Thus, on the basis of interim orders passed by this Court, the petitioners
have paid fees at the rate of 11% and 15%.
38. Now the question is whether the petitioners are entitled to
refund. We have held that the demand for levy of licence fee at the rate
of 2% of annual turnover is illegal. However, the petitioners paid the
amount at the rate of 2% without any demur from 4 th October 1995.
Moreover, there is no challenge to the demand made at the rate of 2%
from the aforesaid date. However, for a period prior to the said date, no
such demand can be validly made. The demand of licence fee at the rate
of 10% from 3rd September 1984 is lawful. However, there is no legal basis
for increasing the same to 11% till 26 th December 2001. The second
respondent is justified in demanding the licence fee at the rate of 15%
from 1st July 2007. If there is any subsequent increase, there is no specific
challenge to the same in the petition. Thus, the first respondent was
entitled to recover licence fee at the rate of 10% of the annual turnover
from 3rd September 1984 till 26th December 2001. From 26th December
2001, the first respondent and from the date of execution of the OMDA,
the second respondent were entitled to claim fee at the rate of 11%. From
SKN 53/55 2430.96-wp (1)
1st July 2007, the levy at the rate of 15% is justified. There is no material
placed on record by the petitioners to show whether or not the payments
made by them at the rates of 2% (prior to 4 th October 1995), 10% (prior
to 3rd September 1984), 11% (prior to 26th December 2001) and 15%
(prior to 1st July 2007) have been recovered by the petitioners from the
airlines or agencies which employed them. We, therefore, propose to
direct the Director of Civil Aviation to appoint a competent officer to make
an adjudication on the question whether the petitioners have recovered
the aforesaid amounts paid to the first or second respondents, from the
companies or airlines which employed the third petitioner. Only if the
petitioners satisfy the competent officer that the amounts have not been
recovered from third parties, the petitioners will be entitled to refund.
Even, the computation of the amount of refund with interest will have to
be made by the said officer. The refund will carry interest at the rate of
6% per annum from the respective dates of payment.
39. Accordingly, the petition must succeed in part and we pass
the following order:
(I) We declare that demand for licence fee at the rate of
2% from the petitioner for the period prior to 4 th
October 1995 is illegal. We declare that the demand
of licence fee at the rate of 10% with effect from 3 rd
September 1984 is lawful. However, there is no legal
basis for demanding the Licence fee at the rate of
11% till 26th December 2001. The second respondent
SKN 54/55 2430.96-wp (1)
is justified in demanding the licence fee at the rate of
15% from 1st July 2007. The first respondent was not
competent to demand licence fee at the rate of 2% for
the period prior to 4th October 1995. The first
respondent was entitled to recover licence fee at the
rate of 10% of the annual turnover from 3rd
September 1984 till 26th December 2001. From 26th
December 2001, the recovery at the rate of 11% was
lawful. From 1st July 2007, the levy at the rate of
15% is justified.
(II) We direct the Director of Civil Aviation to appoint a
competent officer of the appropriate rank to make an
adjudication on the question of quantum of amounts
paid by the petitioners which were not payable by
them as per the findings recorded above. He will
ascertain whether any amount in excess of what is
payable in terms of what is held in clause (I) above
was paid by the petitioners. The officer so appointed
will decide whether the petitioners have recovered the
said excess amount, if any, from the companies or
airlines which employed them. Only if the
petitioners satisfy the competent officer that the
excess amount has not been recovered by the
petitioners from third parties, to that extent, the
petitioners will be entitled to refund. Even, the
SKN 55/55 2430.96-wp (1)
computation of the amount of refund with interest
will have to be made by the said officer. The refund
will carry simple interest at the rate of 6% per annum
from the respective dates of payment. He shall fix the
liability of the first and second respondent;
(III) The appointment of such officer shall be made within
a period of one month from today. He shall pass a
reasoned order after giving an opportunity of being
heard to the Petitioners and the first and second
respondents and after examining the record. The
order shall be passed within a period of three months
from today;
(IV) The amounts as determined as above shall be paid by
the first/second respondents to the petitioners within
a period of one month from the date of the said order;
(V) Rule is made partly absolute on above terms. No
costs.
(RIYAZ I. CHAGLA, J.) (A.S.OKA, J.)
