IMPORTANT POINT
The letters dated 09.02.2009 and 27.02.2009 declared ultra vires the Act.

Headnote:(a) Airports Authority of India Act, 1994 – Section 22A(a) – Only the power to levy fees for funding or financing the costs of up-gradation, expansion or development of the airports at which the fees is collected can be assigned to a lessee. (Para 11)
        (b) Airports Authority of India Act, 1994 – Section 12A(1) – Only the premises of airport can be leased to a lessee – It cannot include establishing an airport or assisting in establishing of private airports in terms of section 12(3)(aa). (Para 12)
        (c) Airports Authority of India Act, 1994 – Section 22A(b) and (c) and section 12A(4) – Airport Authority authorised to levy fees for its statutory function of establishing a new airport or to assist in the establishment of private airports – It is also authorised to levy fees for up-gradation, expansion and development of leased out airport and this can be assigned to the lessee if provided in the Rules – Since the lessee of an airport cannot be assigned the function of the Airports Authority to establish airports or assist in establishing private airports in lieu of the existing airports at which the development fees is being collected, the lessee cannot have the power of the Airports to levy and collect development fees – Lease agreements like OMDA and State Support Agreement could not have made a provision conferring the right on the lessee to levy and collect development fees which are meant for discharge of statutory functions of the Airports Authority. (Para 13)
        (d) Airports Authority of India Act, 1994 – Section 22 – Charges, fees and rent collected by the Airports Authority under section 22 are for the services and facilities provided by it to the airlines, passengers, visitors and traders doing business at the airport – Therefore the lessee of the premises u/s 12 will have the powers of the Airports Authority u/s 22 to collect such charges, fees or rent from the third parties for the different facilities and services provided to them in terms of the lease agreement. (Para 14)
        (2003) 10 SCC 421; (1986) 4 SCC 198; (1986) 4 SCC 667; (1972) 4 SCC 174; (2006) 2 SCC 740; (1992) 1 SCC 428 – Distinguished
        (e) Airports Authority of India Act, 1994 – Section 22A – There is a distinction between the charges, fees and rent collected u/s 22 and the development fees levied and collected u/s 22A – The levy u/s 22A though described as fees is really in the nature of a cess or a tax for generating revenue for the specific purposes mentioned in section 22A (a), (b) and (c). (Para 14)
        (2006) 6 SCC 763 – Relied upon
        (f) Airports Authority of India Act, 1994 – Section 22A – The development fees were to be levied on and collected from the embarking passengers “at the rate as may be prescribed” – Since no rate has been prescribed, levy and collection of development fees from the embarking passengers was without the authority of law. (Para 15)
        (1992) 3 SCC 285; (1962) 2 SCR 659; (1973) 2 SCC 345 – Relied upon
        (1976) 3 SCC 167; (1985) 2 SCC 16; AIR 1968 SC 464; (1969) 1 SCR 108; AIR 1961 SC 276; (2008) 5 SCC 575; (1970) 1 MLJ 19; (1999) 6 SCC 150; AIR 1944 PC 71; (2009) 8 SCC 492; (2001) 6 SCC 446 – Distinguished
        (g) Airports Authority of India Act, 1994 – Section 22A – Development fee could be levied only at the rates prescribed by the rules – In absence of the rules Central Government could not fix the rates by executive instruction – The letters dated 09.02.2009 and 27.02.2009 declared ultra vires the Act – Not saved by section 6, General Clauses Act, 1897. (Para 19)
        (h) Airports Authority of India Act, 1994 – Section 13(1)(a) – Development fee to be fixed by Regulator Authority – The Authority issuing notice and rate for DIAL and not MIAL – In absence of any challenge validity of the Notice not considered – MIAL not authorised to collect the fee. (Para 20)
       Facts of the case:
        1. The validity of levy of development fees on the embarking passengers by the lessees of the Airports Authority of India at the Indira Gandhi International Airport, New Delhi and the Chhatrapati Shivaji International Airport, Mumbai was challenged in theses appeals by way of PIL.
        2. The Delhi High Court upheld the validity.
       Finding of the Court:
        Impugned judgment cannot be sustained.
       Result : Appeals allowed.

JUDGMENT

A. K. Patnaik, J. —

Application for permission to file SLP in SLP [C] No.11799/2011 [CC No.1066/2010] is allowed and delay condoned.

2. Leave granted.

3. These are appeals against the judgment and order dated 26.08.2009 of the Division Bench of the Delhi High Court in public interest litigations upholding the validity of levy of development fees on the embarking passengers by the lessees of the Airports Authority of India at the Indira Gandhi International Airport, New Delhi and the Chhatrapati Shivaji International Airport, Mumbai.

Relevant Facts:

4. The Airports Authority of India Act, 1994 (for short ‘the 1994 Act’) came into force on 01.04.1995 and under Section 3 of the 1994 Act, the Central Government constituted the Airports Authority of India (for short ‘the Airports Authority’). Section 12 of the 1994 Act enumerates the various functions of the Airports Authority. By the Airports Authority of India (Amendment) Act, 2003 (for short ‘the Amendment Act of 2003’), Sections 12A and 22A were inserted in the 1994 Act with effect from 01.07.2004. The newly inserted Section 12A provides that the Airports Authority may make a lease of the premises of an airport to carry out some of its functions under Section 12 as the Airports Authority may deem fit. The newly inserted Section 22A of the 1994 Act provides that with the approval of the Central Government, the Airports Authority may levy on, and collect from, the embarking passengers at an airport, the development fees at the rate as may be prescribed. On 04.04.2006, the Airports Authority leased out the Indira Gandhi International Airport, New Delhi (for short ‘the Delhi Airport’) to the Delhi International Airport Private Limited (for short ‘DIAL’) and also leased out the Chhatrapati Shivaji International Airport, Mumbai (for short ‘the Mumbai Airport’) to Mumbai International Airport Private Limited (for short ‘MIAL’). Section 22A of the 1994 Act was amended by the Airports Economic Regulatory Authority of India Act, 2008 (for short ‘the 2008 Act’) and the amended Section 22A provided for determination of the rate of development fees for the major airports under clause (b) of sub-section (1) of Section 13 of the 2008 Act by the Airports Economic Regulatory Authority (for short ‘the Regulatory Authority’). The amended Section 22A was to take effect on and from the date of the establishment of the Regulatory Authority. The Government of India, Ministry of Civil Aviation, sent a letter dated 09.02.2009 to DIAL conveying the approval of the Central Government under Section 22A of the 1994 Act for levy of development fees by DIAL at the Delhi Airport at the rate of Rs.200/- per departing domestic passenger and at the rate of Rs.1300/- per departing international passenger inclusive of all applicable taxes, purely on ad hoc basis, for a period of 36 months with effect from 01.03.2009. Similarly, the Government of India, Ministry of Civil Aviation, sent another letter dated 27.02.2009 to MIAL conveying the approval of the Central Government under Section 22A of the 1994 Act for levy of development fees by MIAL at the Mumbai Airport at the rate of Rs.100/- per departing domestic passenger and at the rate of Rs.600/- per departing international passenger inclusive of all applicable taxes, purely on ad hoc basis, for a period of 48 months with effect from 01.04.2009. The levy of development fees by DIAL as the lessee of the Delhi Airport was challenged in Writ Petition No. 8918/2009 by Resources of Aviation Redressal Association. The levy of development fees by DIAL and MIAL as lessees of the Delhi and Mumbai Airports were challenged in Writ Petition No. 9316 of 2009 and Writ Petition No. 9307 of 2009 by Consumer Online Foundation. The Writ petitioners contended inter alia that such levy of development fees under Section 22A of the 1994 Act can only be made by the Airports Authority and not by the lessee and that until the rate of such levy is either prescribed by the Rules m

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2011 Supreme(SC) 449

IMPORTANT POINT The letters dated 09.02.2009 and 27.02.2009 declared ultra vires the Act.

Cases Referred (24)

IMPORTANT POINT
The letters dated 09.02.2009 and 27.02.2009 declared ultra vires the Act.