Delhi High Court
Aero Club Of India & Anr vs Union Of India & Ors on 7 July, 2016
*IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 7th July, 2016
+ W.P.(C) 8183/2015 & CMs No.17117/2015 (for stay) & 28923/2015
(for directions)
AERO CLUB OF INDIA & ANR ..... Petitioners
Through: Mr. Kapil Sibal & Mr. Ravi Sikri, Sr.
Advs. with Mr. Saket Sikri, Mr.
Vikalp Mudgal, Ms. Divyangana
Singh and Ms. Adwaita Sharma,
Advs.
Versus
UNION OF INDIA & ORS ..... Respondents
Through: Ms. Anjana Gosain, Ms. Nidhi Mohan
Parashar and Mr. Vishu Agrawal,
Advs. for UOI.
Mr. Sanjay Jain, ASG with Mr.
Digvijay Rai, Ms. Pallavi Shali, Mr.
Syed Hassan Bin Taher and Mr.
Sumit Misra, Advs. for AAI.
AND
+ W.P.(C) 11160/2015 & CM No.28998/2015 (for stay)
AERO CLUB OF INDIA & ANR ..... Petitioners
Through: Mr. Kapil Sibal & Mr. Ravi Sikri, Sr.
Advs. with Mr. Saket Sikri, Mr.
Vikalp Mudgal, Ms. Divyangana
Singh and Ms. Adwaita Sharma,
Advs.
Versus
W.P.(C) Nos.8183/2015 & 11160/2015 Page 1 of 35
UNION OF INDIA & ORS. ..... Respondents
Through: Mr. Rajesh Gogna, Adv. for UOI.
Mr. Sanjay Jain, ASG with Mr.
Digvijay Rai, Ms. Pallavi Shali and
Mr. Sumit Misra, Advs. for AAI.
CORAM:-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
1. W.P.(C) No.8183/2015 was filed i) impugning the directives dated
17th July, 2015 of the respondent no.2 Airport Authority of India (AAI) to its
Northern, Western, Southern and North-Eastern Regional Executive
Director a) that pending finalization / approval of Flying Club Policy by the
competent authority, raise bills on Flying Clubs and Flying Training
Institutes of Category-I as per decision contained in the letter dated 11th
January, 2010, b) that all Flying Clubs under Category-I to clear all
outstanding dues by 31st August, 2015, and, c) advising all Category-I
Flying Clubs that upon non-clearing of dues by 31st August, 2015, their
continued occupation from 31st August, 2015 will be treated as unauthorized
and necessary action under the Airport Authority of India Act, 1994 (AAI
Act) for eviction as unauthorized occupant will be initiated; ii) impugning
the consequent demand dated 5th August, 2015 on the petitioner no.2 Delhi
Flying Club Pvt. Ltd. (DFC) for Rs.8,30,31,076/- towards arrears of licence
W.P.(C) Nos.8183/2015 & 11160/2015 Page 2 of 35
fee till 31st August, 2015; iii) impugning the notice dated 26th May, 2015
under Section 28G(4) of the AAI Act issued by the respondent no.3 Office
of Eviction Officer, AAI (EO) to the petitioner no.2 DFC to show cause; iv)
seeking to restrain the respondent no.2 AAI from recovering any amounts
pending the finalization of the Policy for flying clubs, and; v) seeking a
mandamous to the respondent no.1 Union of India to frame and / or finalize
the Policy with regard to the petitioners.
2. Notice of W.P.(C) No.8183/2015 was issued vide order dated 27th
August, 2015 but the interim stay of proceedings before the respondent no.3
EO sought denied. The petitioners preferred LPA No.588/2015 and vide
order dated 1st September, 2015 wherein status quo as existing on that date
was directed to be maintained with respect to the orders impugned in the
writ petition subject to deposit of Rs.2 crores (which deposit was made
subject to outcome of the petition) with the respondent no.2 AAI. Counter
affidavits were filed by the respondent no.1 UOI and the respondent no.2
AAI and to which rejoinders were filed by the petitioners.
W.P.(C) Nos.8183/2015 & 11160/2015 Page 3 of 35
3. During the hearing of W.P.(C) No.8183/2015, W.P.(C)
No.11160/2015 was also filed i) impugning the notice dated 20th November,
2015 of the respondent no.3 EO to the respondent no.2 DFC under Section
28C(2)(b)(i) of the AAI Act to show cause as to why it should not be evicted
from the area of 8352.01 sq. mtrs. of paved, unpaved structures etc.
occupied by respondent no.2 DFC; ii) impugning the notice dated 10th
November, 2015 of the respondent no.2 AAI refusing renewal of licence to
the respondent no.2 DFC and asking the respondent no.2 DFC to handover
vacant, peaceful, physical possession of the premises; and, iii) seeking to
restrain the eviction of the petitioner no.2 DFC pending finalization of the
Policy for flying clubs by the respondent no.1 UOI.
4. Notice of W.P.(C) No.11160/2015 also was issued and counter
affidavit thereto has been filed by the respondent no.1 UOI and to which a
rejoinder has been filed by the petitioners.
5. Both petitions were thereafter heard together and judgments reserved
on 4th February, 2016.
W.P.(C) Nos.8183/2015 & 11160/2015 Page 4 of 35
6. It is the case of the petitioner no.1 Aero Club of India Pvt. Ltd.
(ACIPL) and the petitioner No.2 DFC:
(i) that the petitioner no.1 ACIPL is a company incorporated under
Section 25 of the Companies Act, 1956 to promote flying and
aerosports in India and with the said objective established
various light aeroplane clubs and the petitioner no.2 DFC was
established in the year 1928;
(ii) that till the year 1949, the petitioner no.1 ACIPL was the only
authority to issue licenses to potential pilots;
(iii) that the petitioner no.1 ACIPL has received governmental
support since its inception and is still the apex body for flying
and gliding clubs and aerosports organizations in India and has
28 member flying clubs and till the year 2012 was receiving
grants from Government of India;
iv) that the petitioner no.2 DFC is a member of the petitioner no.1
ACIPL and / was also funded and established by Government
of India with the main aim and objective of aviation and
aviation related engineering activities in the country and
promotion of aviation and aviation related courses on purely no
profits no loss basis;
v) that the petitioner no.2 DFC is also a company limited with
guarantee having no share capital and is being run only for the
W.P.(C) Nos.8183/2015 & 11160/2015 Page 5 of 35
benefit of its members and does not carry on any business of
commercial nature and all monies generated are utilized for
promotion of aviation related activities in India;
vi) that the School of Aviation Science and Technology under the
aegis of the petitioner no.2 DFC is providing professional
courses which are approved by the Director General of Civil
Aviation (DGCA), Government of India vide letter dated 12 th
September, 1988 and the petitioner no.2 DFC is accorded
exemption from payment of taxes;
vii) that in view of the security scenario of the capital of the
country, Government of India since January, 2002 imposed
flying restrictions at Safdarjung Airport and stopped subsidy to
the petitioner no.2 DFC resulting in severe financial crunch but
the petitioner no.2 DFC continues to play a pivotal role for
promotion of aviation related activities by imparting aviation
related training by charging nominal fees;
viii) that on 17th May, 1982 various licence agreements were
executed by and between President of India on behalf of DGCA
and the petitioner no.2 DFC and in pursuance of which the
petitioner no.2 DFC was granted permission to use the Hanger,
Annexes, Garages, Flying Club Building, Bar Counter, Trainees
and Instructors Barracks, Servant Quarters, M.I. Room and
Kitchen for a nominal charge of Rs.1/- per annum for the
hanger and Rs.555/- per month for other buildings;
W.P.(C) Nos.8183/2015 & 11160/2015 Page 6 of 35
ix) that the licence fee was fixed at a nominal basis having regard
to the social and / or public duty performed by the petitioner
no.2 DFC and which function the petitioner no.2 DFC
continues to perform till date;
x) that in or about the year 1986, the National Airport Authority
(NAA) which had come into existence sought to revise and / or
increase the rates of licence fee charged from various flying
clubs;
xi) that the petitioner no.2 DFC represented thereagainst and seeing
merit in which representation, status quo regarding licence fee
was directed to be maintained;
xii) that in or about the years 1990-1996 various litigations ensued
between the petitioner no.2 DFC and the respondent no.2 AAI
or its predecessor NAA with respect to the attempt of AAI /
NAA to demolish or to remove the structures occupied by the
petitioner no.2 DFC at Safdarjung Airport but which litigations
were also disposed of as settled;
xiii) that again on 2nd January, 1996, the respondent no.2 AAI
arbitrarily and unilaterally increased the licence fee with effect
from 1st April, 1995 and against which also representations
were made and the licence fee at the old rate continued to be
paid;
W.P.(C) Nos.8183/2015 & 11160/2015 Page 7 of 35
xiv) that the respondent no.2 AAI under cover of its letter dated 12 th
April, 2007 enclosed a list containing particulars of 28 clubs in
Category-I and 13 clubs in Category-II and also informed that
guidelines for levy of nominal charges in respect of Category-I
flying clubs had since been issued vide letter dated 13 th March,
2007; while the Category-I flying clubs were mentioned in the
said list as subsidized, Category-II flying clubs were mentioned
as private flying clubs and commercial; the petitioner no.2 DFC
was shown in the Category-I as subsidized;
xv) that notwithstanding the above, the respondent no.2 AAI vide
its letter dated 27th June, 2008 revised the rate of licence fee
with effect from 1st April, 2008 to 31st March, 2011 and against
which the petitioner again represented;
xvi) that however the respondent no.2 AAI vide its letter dated 15 th
June, 2012 advised its Regional Directors to enhance the
licence fee at 10% every year;
xvii) that the respondent no.1 UOI vide its letter dated 9 th October,
2012 advised the respondent no.2 AAI to consider the request
of the flying clubs to keep the order of recovery of charges in
terms of resolution of the year 2007 of the respondent no.2 AAI
in abeyance till finalization of the policy of the Ministry
regarding prescribing the eligibility criteria for flying clubs for
availing the facility of nominal rates for various charges
payable to respondent no.2 AAI;
W.P.(C) Nos.8183/2015 & 11160/2015 Page 8 of 35
xviii) that in pursuance of the letter dated 9th October, 2012 of the
respondent no.1 UOI the respondent no.2 AAI vide its letter
dated 19th November, 2012 to all General Managers directed
that recovery of outstanding dues be kept in abeyance; and,
xix) that though the policy pursuant to the letter dated 9 th October,
2012 had not been finalized but the respondent no.2 AAI and its
EO (respondent no.3) have been issuing impugned notices /
initiating impugned proceedings in violation thereof.
7. The respondent no.1 UOI in its counter affidavit in W.P.(C)
No.8183/2015 pleaded:
(i) that the land in occupation of the petitioner no.2 DFC and
subject matter of these petitions had been allotted to the
petitioner no.2 DFC by the respondent no.2 AAI and the
agreement with respect thereto also is between the respondent
no.2 AAI and the petitioner no.2 DFC;
(ii) that the petitioners have available to them remedy of appeal
before the Airport Appellate Tribunal established under Section
28-I of the AAI Act;
(iii) that though vide letter dated 9th October, 2012, the respondent
no.1 UOI had requested the respondent no.2 AAI to consider
the representations of the Flying Clubs and to keep the order of
W.P.(C) Nos.8183/2015 & 11160/2015 Page 9 of 35
recovery of charges in abeyance till finalization of a policy,
"however , no direction was given in the matter"; and,
(iv) that the respondent no.2 AAI is a mini ratna company under
the Government of India and is competent to make policy in the
matter as per its commercial judgments and business principles.
8. The respondent no.2 AAI in its counter affidavit in W.P.(C)
No.8183/2015 has pleaded:
(i) that the petitioner no.1 ACIPL was given land measuring 17400
sq. ft. by way of License Agreement dated 27 th December, 1984
by the DGCA; the said Licence Agreement has expired on 18 th
September, 2013;
(ii) that the writ petition is not maintainable as the grievance if any
of the petitioner has to be against the order if any passed by the
respondent no.3 EO of recovery, for which only the
proceedings have been initiated;
(iii) that since alternative remedy as provided under the AAI Act is
available, the writ is not maintainable;
(iv) that the Board of the respondent no.2 AAI in its 107 th Meeting
held on 21st February, 2007 decided to charge nominal rate i.e.
10% of the normal rates for service availed by Flying Clubs by
various airports placed under Category-1 i.e. those clubs which
W.P.(C) Nos.8183/2015 & 11160/2015 Page 10 of 35
are Educational Societies and operate on no profit no loss basis
and received grant-in-aid from Central / State Governments;
(v) that the Flying Clubs made representation for charging nominal
licence fee of Rs.1/- per month for land and hanger space
occupied by these clubs but the same was not agreed to;
(vi) that hence vide letter dated 13th March, 2012, it was directed
that action be taken and the flying clubs be asked to clear the
outstanding dues by 31st March, 2012 failing which their
activities may be stopped;
(vii) that the letter dated 9th October, 2012 issued by the Ministry of
Civil Aviation shows that the Secretary, Ministry of Civil
Aviation had desired that the matter should be placed before the
Board of the respondent no.2 AAI and be got resolved;
(viii) that the policies with regard to flying clubs are formulated by
the respondent no.2 AAI and not by the Ministry of Civil
Aviation;
(ix) that the letter dated 9th October, 2012 merely expresses the
desire of the Ministry and does not contain any binding
directive;
(x) that there is no bias against the petitioner no.2 DFC;
W.P.(C) Nos.8183/2015 & 11160/2015 Page 11 of 35
(xi) that as per the spot audit conducted on 3rd September, 2015, the
petitioner no.2 DFC is occupying 5000 sq. mtrs. in addition to
space allotted to it;
(xii) that the respondent no.2 AAI and not the Ministry of Civil
Aviation frames the policy with regard to fixation of licence fee
and respondent no.2 AAI having fixed a licence fee which was
revised with effect from 1st April, 1995 and 1st April, 2008 and
on the said basis 10% of the commercial rates have been
demanded from the petitioner no.2 DFC since the year 2007;
(xiii) that the demand/recovery is with the approval of the Competent
Authority of the respondent no.2 AAI, pending finalization of
the policy;
(xiv) that the flying activities of the petitioner no.2 DFC have been
stopped by the Government of India vide letter dated 23 rd / 26th
November, 2001 conveyed to the petitioner no.2 DFC vide
letter dated 11th January, 2002 and the petitioner no.2 DFC is
involved in commercial activities and the demand at 10% of the
commercial value of the land occupied by the petitioner no.2
DFC is fair;
(xv) that there is no policy of the respondent no.1 UOI contrary to
the demand;
W.P.(C) Nos.8183/2015 & 11160/2015 Page 12 of 35
(xvi) that the respondent no.3 EO issued the show cause notice dated
26th May, 2015 impugned in the petition upon the failure of the
petitioner no.2 DFC to comply with the demand;
(xvii) that the validity of the demand is to be adjudicated by the
respondent no.3 EO and the writ petition is not maintainable;
(xviii) that the petitioner no.1 ACIPL was also given land vide a
separate licence agreement by the DGCA on 27th December,
1984 which expired on 18th September, 2013; however no
proceedings have been initiated against the petitioner no.1 and
hence no cause of action has arisen to the petitioner no.1 to
challenge the impugned letters;
(xix) that the petitioner no.2 DFC is presently not being funded by
the Government of India after the flying activities were stopped
in the year 2001;
(xx) that the petitioner no.2 DFC is only doing commercial activities
on the site including parties, marriages and giving space for
examination and study centre of Indira Gandhi National Open
University (IGNOU) etc.;
(xxi) that the letter dated 9th October, 2012 of the respondent no.1
UOI merely proposes that Chairman of the respondent no.2
AAI may consider the request of flying clubs to keep the order
for recovery of charges in terms of the resolution of the year
2007 of the Board of respondent no.2 AAI in abeyance till
W.P.(C) Nos.8183/2015 & 11160/2015 Page 13 of 35
finalization of the policy of the Ministry regarding prescribing
the eligibility criteria for flying clubs for availing the facility of
nominal rates; however Competent Authority on 13th March,
2007 took a decision to demand 10% of licence fee as per
Board Resolution of 2007;
(xxii) that the letter dated 19th November, 2012 of the General
Manager stands overridden by the decision dated 26th May,
2015 of the respondent no.2 AAI;
(xxiii) that the letter dated 19th November, 2012 is not an order /
directive under Section 40 of the AAI Act; and,
(xxiv) that the letter dated 9th October, 2012 cannot be termed as
order of the respondent no.1 UOI to the respondent no.2;
9. Need to refer to the rejoinders filed is not felt.
10. Similarly, need to refer to the pleadings in W.P.(C) No.11160/2015 is
not felt as the same are found to be the same as in the earlier petition with
only difference being that while the challenge in the first petition is inter
alia to the proceedings initiated before the respondent no.3 EO for recovery
of arrears of licence fee, the challenge in the subsequent petition is to the
action of the respondent no.3 EO of eviction of the petitioner no.2 DFC from
the premises in its occupation.
W.P.(C) Nos.8183/2015 & 11160/2015 Page 14 of 35
11. The senior counsel for the petitioners has argued:
(i) that the petitioners enjoyed income tax exemption and work on
„no profit no loss‟ basis;
(ii) that all earnings of the petitioners are utilised for the purposes
of training;
(iii) that the respondent No.2 AAI is vide Section 40 of the AAI
Act, by which it is established, is bound by the directives of the
Central Government;
(iv) that the respondent No.2 has not taken any action qua other
similarly situated Clubs;
(v) that the proceedings under Section 28G of the AAI Act
impugned in W.P.(C) No.8183/2015 could be only against
unauthorised occupants; the petitioners at the time of institution of the
said proceedings were not unauthorised occupants, their licence had
not been determined;
(vi) that the letter dated 9th October, 2012 of the Ministry of Civil
Aviation (MCA), Govt. of India to the Chairman of the AAI is a
decision of the Govt. of India within the meaning of Section 40(2) of
the AAI Act;
(vii) that though the respondents in the counter affidavit controvert
but do not show that in pursuance to the letter dated 9th October, 2012
what decision has been taken by the MCA till date;
W.P.(C) Nos.8183/2015 & 11160/2015 Page 15 of 35
(viii) that the respondent No.2 AAI had also treated the letter dated
9th October, 2012 so, as evident from its letter dated 19 th November,
2012;
(ix) that from the counter affidavit of respondent No.2 AAI, it is
evident that the policy decision regarding the flying clubs has not
been taken by the MCA till now;
(x) that no further action has been taken against any other flying
club;
(xi) that till the policy is formulated by the MCA, no action can be
taken against the petitioners;
(xii) that even after the MCA has finalised the policy, the petitioners
will have a right to challenge the same; attention was invited to the
file notings at pages 808 to 810 of W.P.(C) No.8183/2015 to contend
that as late as in June, 2015, the view was that since the policy of
MCA was still being formulated, the matter should be kept in
abeyance but thereafter the petitioner No.2 DFC has been targeted;
(xiii) that even the UOI in its counter affidavit has not stated that it is
no longer formulating the policy;
(xiv) that similarly UOI in its counter affidavit has not taken a stand
that AAI is free to take any decision, notwithstanding the formulation
of policy pending before it;
W.P.(C) Nos.8183/2015 & 11160/2015 Page 16 of 35
(xv) attention was invited to an additional affidavit dated 31st
October, 2015 of the petitioners pleading that charging of licence fee
of 10% of the normal rates to flying clubs where flying activities have
stopped was completely arbitrary as compared to flying clubs where
flying activities were continuing and that the petitioner No.2 DFC is
only one of the six clubs which have been issued such notices; in the
said additional affidavit it is further pleaded that under a subsidiary
agreement dated 17th June, 1966, the petitioner No.2 DFC was
permitted to carry on various other activities on its land and the
Government was fully aware of the same; it is further pleaded in the
said affidavit that the title of the respondent No.2 AAI in respect of
the subject land is under dispute with the Ministry of Urban
Development;
(xvi) that the petitioner No.2 DFC is holding training activities and is
charging very minimal fee thereof and it is for such training activities
that earning from other activities, of holding marriage parties on the
land is having done; and,
(xvii) that even the Taxation Authorities do not treat the earnings of
the petitioner No.2 DFC as from commercial activities.
W.P.(C) Nos.8183/2015 & 11160/2015 Page 17 of 35
12. Per contra, the learned ASG appearing for the respondent No.1 UOI
and respondent No.2 AAI argued:
(a) that the notices of the respondent No.3 EO impugned in these
petitions are akin to the notices under the Public Premises (Eviction of
Unauthorised Occupants) Act, 1971 (PP Act);
(b) letter dated 30th October, 2006 of the MCA to the AAI
categorising the flying clubs was handed over and it was argued that
as per the said letter the petitioner No.2 DFC is a Category I flying
club; and,
(c) that it is a settled principle of law that there is to be no
interference under Article 226 of the Constitution of India at the show
cause notice stage; the communication dated 9th October, 2012 is not a
policy decision; reliance was placed on Delhi International Airport
Ltd. Vs. International Lease Finance Corpn. AIR 2015 SC 1903 in
this regard.
13. The senior counsel for the petitioners in rejoinder has argued:
(I) that the action of eviction against the petitioner No.2 DFC
impugned in W.P.(C) No.11160/2015 has been initiated against the
petitioner No.2 DFC also for the reason of failure to pay the enhanced
licence fee and which is under challenge in W.P.(C) No.8183/2015;
(II) that the argument of alternative remedy is not available as the
EO cannot decide the questions raised; and,
W.P.(C) Nos.8183/2015 & 11160/2015 Page 18 of 35
(III) that the respondents till date have not disclosed what decision
they have taken qua other similarly situated clubs.
14. The counsel for the petitioners, after the judgment was reserved, has
also handed over written submission in which reliance has been placed on
paras 21 and 23 of judgment dated 19 th March, 2013 of this Court in
RFA(OS) No.104/2012 titled DCM Limited Vs. Delhi Development
Authority and on para 6 of State of Rajasthan Vs. Padmavati Devi 1995
Supp. (2) SCC 290 to contend that an Estate Officer cannot adjudicate upon
the disputes as raised in the present petitions and on para 8 of Mohindar
Singh Gill Vs. Chief Election Commissioner, New Delhi (1978) 1 SCC 405
to contend that MCA, Govt. of India cannot change its stand as taken in the
letter dated 9th October, 2012 in the counter affidavit filed in these petitions.
15. As would be evident from the aforesaid narrative,
(A) It is not in dispute that the rights of the petitioner No.2 DFC
with respect to the land / property, challenge to the actions of recovery
of charges with respect whereto and of eviction wherefrom these
petitions pertain, is as of a licencee only;
(B) that the term of the licence originally granted in favour of the
petitioners has expired;
W.P.(C) Nos.8183/2015 & 11160/2015 Page 19 of 35
(C) that the said licence of the petitioner No.2 DFC is under the
respondent No.2 AAI;
(D) the only ground on which the petitioners defend the demand for
licence fee and the eviction for non-compliance therewith is, that the
MCA having directed AAI to keep the enhancement in licence fee in
abeyance and AAI under Section 40 of AAI being bound by the said
direction, the demand for licence fee on enhanced rates and eviction
for non-compliance therewith is bad;
And the only questions to be adjudicated in these petitions are--
(I) Whether the demand of licence fee impugned in W.P.(C)
No.8183/2015 is in contravention of Section 40 of the AAI Act and
the resultant eviction proceedings bad for the said reason; and,
(II) Whether the proceedings against the petitioner No.2 DFC are
bad for the reason of the respondent No.2 AAI having not taken such
proceedings against other flying clubs similarly situated as the
petitioner No.2 DFC.
16. I say so because it is also not in dispute that the respondent No.2 AAI
as licensor is otherwise entitled to fix the licence fee with respect to its
properties / lands and the respondent No.2 AAI as licensor is otherwise
entitled to terminate the licence at any time.
W.P.(C) Nos.8183/2015 & 11160/2015 Page 20 of 35
17. The decision of the first of the aforesaid questions hinges inter alia on
the interpretation and effect of (i) Section 40 of the AAI Act; (ii) the letter
dated 9th October, 2012 of the MCA; and, (iii) the letter dated 19th
November, 2012 of the AAI.
18. The three are reproduced herein below:
Section 40 of AAI Act
40. Power of the Central Government to issue directions--
(1) Without prejudice to the foregoing provisions of this Act,
the Authority shall, in the discharge of its functions and duties
under this Act, be bound by such directions on questions of
policy as the Central Government may give in writing to it from
time to time:
Provided that the Authority shall, as far as practicable,
be given opportunity to express its views before any direction is
given under this sub-section.
(2) The decision of the Central Government whether a
question is one of policy or not shall be final.
(3) The Central Government may, from time to time,
issue directions to the Authority regarding the discharge of any
functions to it under clause (e) of sub-section (3) of section 12
and the Authority shall be bound to comply with such
directions.
Letter dated 9th October, 2012 of MCA
F.No.AV.22011/01/2012-AAI
Ministry of Civil Aviation
Govt. of India
**********
'B' Block, R.G. Bhawan
S.J. Airport, New Delhi.
Date: 09.10.2012
To,
The Chairman,
Airports Authority of India,
'A' Block, R.G. Bhawan,
S.J. Airport, New Delhi.
Subject: Lease Charges from Flying
Training Institutes / Flying Clubs.
Sir,
I am directed to forward herewith a copy of this
Ministry's D.O. letter No.A.V.29011/20/2012-DG dated
01.10.2012 on the above subject and to say that AAI in
its Board meeting held in 2007 had passed a resolution
to charge 10% of commercial rates as lease charges
from the Flying Training Institutes / Flying Clubs
registered as education societies and operation on no-
profit-no-loss basis and usual commercial rates from the
Flying Training Institutes / Flying Clubs which are
running as private companies and operating on
commercial basis.
2. In the context, AERO Club of India and its
members clubs have represented to the Ministry that,
they were in the past exempted from payment of license
fee, landing, housing, parking and route navigation
facility charge (RNFC) and the affiliated flying clubs
were on a Re.1/- lease for the land provided to them,
being non-commercial and non-profit making
institutions.
3. The request of the AERO Club of India and its
member clubs was considered by SECY. (CA) keeping in
view the requirement of Flying Clubs for training
purposes and it has been proposed to request the
Chairman, AAI to consider the request of the Flying
Clubs to keep order of recovery of charges in terms of
the AAI Board resolution of 2007 in abeyance till
finalization of the policy of the Ministry regarding
prescribing the eligibility criteria for Flying Clubs for
availing the facility of nominal rates for various charges
payable to AAI.
4. Secy. (CA) has desired that, the matter should get
placed before AAI Board and get resolved.
Yours faithfully,
Sd.
(Syed Imran Ahmed)
Under Secretary to the Govt. of India
Tele: 24616025
Enclosures: as above.
For Information: PPS to JS (A)
Letter dated 19th November, 2012 of AAI
AIRPORTS AUTHORITY OF INDIA
NO.: - AV.21012/56/2007-LM/PE-III/779
November 19, 2012
Regional Executive Director
Airports Authority of India
Northern/Eastern/Western/Southern/North-Eastern Region
DELHI/KOLKATA/MUMBAI/CHENNAI/GUWAHATI
Airport Director
Airports Authority of India
Chennai / Trivandrum Airport
CHENNAI / TRIVANDRUM
Sub: Levy of charges by AAI on Flying Clubs / Flying
Training Institute.
Sir,
Reference may please be made to this office letter of even
number dated 13.03.2012 and 29.05.2012 on the above
subject.
In this regard it has been decided to keep the order of
recovery of outstanding dues from Category-I Flying Club
in abeyance till further orders.
This issues with the approval of Competent Authority.
Yours faithfully,
Sd.
(B.C. DAS)
GENERAL MANAGER(LM)
1. Shri Syed Imran Ahmed, Under Secretary,
MCA, R.G. Bhawan, New Delhi.
2. Director General Civil Aviation, Opp Safdarjung
Airport, New Delhi.
3. President Aero Club of India, Sardarjung Airport,
New Delhi.
With respect to Ministry's letter no.AV.22011/01/2012-
AAI dated 09.10.2012.
19. Having bestowed my consideration to the aforesaid aspects, I am
unable to read the letter dated 9th October, 2012 of the MCA as a direction of
the Govt. of India to the AAI on a question of policy within the meaning of
Section 40(1) of the AAI Act. All that the letter dated 9 th October, 2012 of
the MCA, Govt. of India does is (i) to inform AAI that the petitioner No.1
ACIPL and its members represented to the Ministry against the decision
taken by the Board of AAI in 2007 to charge 10% of commercial rates as
lease charges from Flying Training Institutes / Flying Clubs registered as
educational societies and operating on no-profit-no-loss basis; (ii) inform
AAI that the said representation was considered by the Secretary, MCA
keeping in view the requirement of Flying Clubs for training purposes; (iii)
inform AAI that it was proposed to request AAI to "consider" the request of
the Flying Clubs for keeping the decision of the year 2007 in abeyance till
finalization of the policy of the Ministry regarding prescribing the eligibility
criteria for Flying Clubs for availing the facility of nominal rates; and, (iv)
conveys to AAI that the UOI "desired" that the matter be placed before the
AAI Board and be got resolved.
20. It is not in dispute that the respondent No.2 AAI considered the
request of the Flying Clubs and reiterated its decision of the year 2007.
21. As far as the letter dated 19th November, 2012 of AAI is concerned,
the same was issued immediately after the receipt of letter dated 9 th October,
2012 from UOI and in terms thereof. If it were to be held that the letter
dated 9th October, 2012 only required AAI to "consider", leaving the AAI
free to, post "consideration", proceed with its decision, then the letter dated
19th November, 2012 cannot advance the case of the petitioners any further.
The purport of the letter dated 19th November, 2012 was only to keep the
demand in terms of decision of 2007 in abeyance till AAI so considered the
representations of Flying Clubs. The letter dated 19 th November, 2012
cannot be read as preventing AAI from enforcing its demand in terms of
decision of the year 2007, if were to, after "consideration" in terms of letter
dated 9th October, 2012, reiterate the same. A direction of the Govt. of India
to consider or „re-consider‟ a demand cannot in my opinion be read as a
direction nullifying the demand or to not enforce the demand. If the
authority so directed, after "consideration" / „re-consideration‟ reiterates the
demand, a direction to "consider" cannot come in the way thereof.
22. I am also of the opinion that the letter dated 9th October, 2012 of the
UOI to the AAI is not a direction within the meaning of Section 40 of the
AAI Act. The proviso to sub-section (1) of Section 40 of the AAI Act
requires the UOI to, as far as practicable, give an opportunity to the AAI to
express its views before any such direction is given. Neither does the letter
dated 9th October, 2012 so disclose nor is it the case of the petitioners or
otherwise borne out that any such opportunity was given to the AAI before
issuance of the direction contained in the letter dated 9 th October, 2012. It is
also not the case that it was not practicable to give any such opportunity of
hearing to the AAI. The only inference can be that the direction as
contained in the letter dated 9th October, 2012 is not a direction within the
meaning of Section 40(1) of the AAI Act. Similar view is found to have
been taken by the Division Bench of the Bombay High Court in S. Mangala
Vs. Airports Authority of India 2014 SCC OnLine Bom 909. Moreover, for
a direction of the Central Government to qualify as a direction within the
meaning of Section 40(1), it has to be on a question of policy. I fail to see
any question of policy in a direction, as contained in letter dated 9 th October,
2012, to consider. Supreme Court, in Pancham Chand Vs. State of
Himachal Pradesh (2008) 7 SCC 117 held statutory authorities under the
Motor Vehicles Act, 1988 to be bound only by directions of the Government
laying down policy and which policy is to be laid down by Council of
Ministers and not the Chief Minister alone. Here, the letter dated 9th
October, 2012 conveys „desire‟ of the Secretary (Civil Aviation) of the
Government of India and which can by no stretch of imagination be
considered as policy laid down by the Government of India.
23. Even otherwise, the Govt. of India is often approached by various
persons / entities for redressal of their grievances against bodies / authorities
perceived as under the Govt. of India and over which the Govt. of India
exercises control. The Govt. of India also upon being so approached, often
forwards such representations to the bodies / authorities concerned and while
doing so may also express its views. However, merely because the Govt. of
India does so, would not entitle the person / entity aggrieved to claim that
the body / authority complained against is not entitled to enforce the
impugned action. Before it can be so contended, it has to be established that
the body / authority concerned was under the law bound to act in terms of
such direction. The sovereignty of the Govt. of India does not, if I may
state, entitle it to interfere in the functioning of the statutory bodies /
authorities, unless permitted so by law. Even a higher authority cannot
interfere with the independence which is the basic feature of any statutory
scheme. Reference in this regard, besides on Pancham Chand supra, can be
made to C.I.T., Shimla Vs. Greenworld Corporation (2009) 7 SCC 69. In
Jt. Action Committee of Airline Pilots' Association of India Vs. Director
General of Civil Aviation (2011) 5 SCC 435 also though it was held that
even a Senior Official is not entitled to interfere with the decision of a
statutory authority but the direction in that case was found to be falling
within the power of DGCA.
24. Seen in this light, AAI Act was enacted to provide for the constitution
of AAI and for the transfer and vesting of the undertakings of the
International Airports Authority of India and the National Airports Authority
in AAI for the better administration and cohesive management of airports
and civil enclaves whereat air transport services are operated or are intended
to be operated and of all aeronautical communication stations and for
matters connected therewith or incidental thereto. Prior to 1971, all such
activities were controlled by the DGCA, an arm of the Govt. of India.
However, the said set up was found to be inadequate resulting in the
constitution under the National Airports Authority Act, 1985 of International
Airports Authority of India and National Airports Authority. However,
finding the same also to have not achieved the desired result, the AAI Act
was enacted. The said history of the constitution of AAI cannot be lost sight
of in gauging the extent of power exercised by MCA over AAI. The senior
counsel for the petitioners himself drew attention to Section 12 of the AAI
Act prescribing the functions of AAI and which includes establishment of
training institutes and workshops and to Section 12A empowering and
authorising AAI to enter into any agreements with respect to its properties
and to Section 15 deeming the licences granted by the MCA or by the
International Airports Authority of India or National Airports Authority to
be the licences granted by AAI. In such a scenario, I have wondered as to
what policy with respect to Flying Clubs, the MCA is competent to frame.
As far as I can see, such policy is also to be framed by AAI. It is perhaps for
this reason only that the letter dated 9th October, 2012 tentatively uses the
words „consider‟ and „desire‟, without appreciating whether at all it is in the
domain of the MCA to, after coming into force of the AAI Act, frame any
policy with respect to Flying Clubs. Again, the direction contained in letter
dated 9th October, 2012, is expressly stated to be of Secretary, MCA and not
of Council of Ministers, as a policy direction, according to Pancham Chand
supra should be. As observed therein, we are governed by rule of law and
not rule of men. Licences of the Flying Clubs operating over AAI land
would certainly be within the domain of AAI and cannot be in the domain of
MCA.
25. The sole ground on which the challenge in these petitions is based
also disappears from the representation by the ASG in these petitions, not
only on behalf of the UOI but also on behalf of AAI. Even though the
counter affidavit of the UOI states that the formulation of the policy
regarding Flying Clubs is still pending (in my opinion again without
considering the entitlement of UOI to frame such a policy) but it is today not
the stand of the UOI that for the said reason AAI is not entitled to enforce its
decision of the year 2007 or to take consequential actions in pursuance
thereto. Sub-section (1) of Section 40 makes only such directions of Central
Government binding on AAI as relate to questions of policy and sub-section
(2) thereof makes the decision of the Central Government, whether a
question is one of policy or not, final. The fact that the stand of UOI in
these petitions is not that AAI is not entitled to enforce its demand of the
year 2007 or take consequential action, is indicative of UOI itself not
considering the letter dated 9th October, 2012 to be a direction within the
meaning of Section 40 of the AAI Act and not considering the said action of
AAI to be in violation of its letter dated 9th October, 2012. I have already
observed that the decision of the Central Government in this regard is to be
final and neither is there any challenge thereto in these petitions nor do the
petitioners have any locus to challenge the same.
26. There is yet another aspect. Even under Section 40(1) of the AAI Act,
it is not as if a direction of Central Government has any permanency. The
Central Government is entitled to give directions "from time to time". Even
if it were to be held that the Central Government in the letter dated 9 th
October, 2012 had asked AAI not to enforce its decision of the year 2007,
the Central Government is entitled to recall, vary or alter the said direction
and has, by not taking a stand in its counter affidavit that AAI is not entitled
to enforce the demand, changed the said direction.
27. Mention in this regard may be made of Section 49 of the AAI Act
empowering the Central Government to supersede AAI inter alia upon
persistent default by AAI in complying with the directions issued by the
Central Government. The same not only shows the extent of autonomy
which AAI enjoys but also that if Central Government were of the view that
AAI vide the impugned action was acting in contravention of its direction, it
was open to UOI to take further steps. On the contrary, UOI has supported
the action of AAI.
28. Section 40 of the AAI Act is also found to be akin to Section 21 of the
Life Insurance Corporation Act, 1956 and qua which it has been held in
Banatwala and Company Vs. Life Insurance Corporation of India (2011)
13 SCC 446 that even the guidelines dated 30th May, 2002 notified by the
Central Government qua occupancies in respect whereof action under PP
Act could be taken were not within the ambit thereof.
29. As far as the only other ground urged by the petitioner No.2 DFC of
having been targeted is concerned, it is a settled principle of law that once
the action of the State / State Authority is found to be in accordance with
law, challenge thereto cannot be on the ground of such action having not
been taken against others. Some judgments have described the same as
negative equality and held that the same is not prescribed by Article 14 of
the Constitution of India. Once the petitioner No.2 DFC is found to be not
having any right to continue and / or the action of the respondent No.2 AAI
is not found to be contrary to law, the same cannot be restrained, merely
because against others similarly placed no such action has been taken.
30. I am otherwise also of the view that no injustice is being meted out to
the petitioner No.2 DFC. The senior counsel for the petitioners during the
hearing, on enquiry informed that only training on simulator is being
imparted by the petitioner No.2 DFC. The petitioner No.2 DFC, for
imparting the said training certainly does not need such kind of valuable
land and property in its occupation and qua which I as a resident of the city
can say is known more now for the last at least ten years as a marriage /
party venue than for its aeronautical activities.
31. There is another aspect of the matter. The petitioner No.2 DFC is
stated to be a company without any share capital; a direction to the
respondent No.2 AAI to keep in abeyance the increase proposed as far back
as in 2007 in the licence fee for any further time would result in, even if the
said increase were to be ultimately upheld, being not recoverable from the
petitioners. This Court while adjudicating matters under Article 226 of the
Constitution has to weigh equities and balance the rights of both the parties.
Here it is found that if the arguments of the petitioners were to be accepted
and it was to be held that the increased licence fees is required to be kept in
abeyance any further, the same would amount to writing off the said licence
fee, even if ultimately decided to be recoverable, as AAI would have no
means to recover the same.
32. There is thus no merit in the petitions, which are dismissed.
No costs.
RAJIV SAHAI ENDLAW, J.
JULY 07, 2016
„gsr/bs‟
