The Airports Economic Regulatory Authority can appeal against TDSAT orders as it has a vital interest in tariff determinations, establishing its role as a necessary party in such appeals.

JUDGMENT :

Dhananjaya Y. Chandrachud, CJI.

1. Airports Economic Regulatory Authority¹ [“AERA”] has instituted proceedings under Section 31 of the Airport Economic Regulatory Authority of India Act 2008² [“AERA Act”] for challenging the judgments of the Telecom Disputes Settlement and Appellate Tribunal.³ [“TDSAT”] TDSAT is the Appellate Tribunal for the purposes of the AERA Act and it has the competence to hear appeals against orders of AERA. The respondents have raised a preliminary objection to the maintainability of the appeals on the ground that AERA, which is a quasi-judicial body, cannot file an appeal against the judgment of TDSAT. This judgment disposes of the preliminary issue of whether the appeals filed by AERA under Section 31 of the AERA Act are maintainable.

A. Statutory Background

2. The long title of the AERA Act provides that it is an Act to establish AERA and to a) regulate tariff and other charges for aeronautical services rendered at airports; (b) monitor performance standards of airports and (c) for other incidental and connected matters.⁴ [“An Act to provide for the establishment of an Airports Economic Regulatory Authority to regulate tariff and other charges for the aeronautical services rendered at airports and to monitor performance standards of airports and for matters connected therewith or incidental thereto”] The Act applies to all airports where air transport services are operated or are intended to be operated, other than airports in the control of the Armed Forces or paramilitary forces of the Union.⁵ [AERA Act; Section 1(3)(a)]

The Act also applies to all private and leased airports⁶ [AERA Act; Section 1(3)(b)], all civil enclaves⁷ [AERA Act; Section 1(3)(c)] and all major airports.⁸ [AERA Act; Section 1(3)(d)]

3. Section 3 of the AERA Act stipulates that the Central Government must, by a notification, establish AERA within three months from the date of commencement of the Act. By a notification dated 12 May 2009, the Central Government established AERA. Section 13 of the AERA Act prescribes the functions of AERA. AERA must perform the following functions in respect of major airports:

a. Determine tariff for aeronautical services [Section 13(1)(a)].

b. Determine the amount of development fees [Section 13(1)(b)].

c. Determine the passengers service fee levied under Rule 88 of the Aircraft Rules 1937 notified under the Aircraft Act 1934 [Section 13(1)(c)].

d. Monitor the performance standards relating to quality, continuity and reliability of service as specified by the Central Government or any other authority authorised by it [Section 13(1)(d)].

e. Call for information necessary to determine the tariff [Section 13(1)(e)].

f. Perform such other functions relating to tariff which may be entrusted to it by the Central Government or which may be necessary to carry out the provisions of the Act [Section 13(1)(f)].

4. Section 13(1)(a) also prescribes the factors which AERA must take into consideration to “determine” tariff. The following are the seven factors provided by the provision:

a. The capital expenditure incurred and timely investment in improvement of airport facilities.

b. The service provided, its quality and other relevant factors.

c. The cost of improving efficiency.

d. Economic and viable operation of major airports.

e. Revenue received from services other