1. Appeal under Section 31, AERA Act — Maintainability of appeals filed by a regulatory authority against orders of the Appellate Tribunal challenging tariff determination. (Para 1 )
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2024 Supreme(SC) 946
SUPREME COURT OF INDIA
Dhananjaya Y. Chandrachud, CJI., J.B. Pardiwala, Manoj Misra, JJ.
Airports Economic Regulatory Authority of India – Appellant
Versus
Delhi International Airport Ltd. and Others – Respondents
Civil Appeal Nos. 3098-3099 of 2023 Civil Appeal Nos. 1798-1799 of 2021 With Civil Appeal No. 1806 of 2021 With Civil Appeal Nos. 10668-10670 of 2024 With Civil Appeal Nos. 3697-3698 of 2022 With Civil Appeal No. 8217 of 2023 With Civil Appeal No. 7767 of 2023 With Civil Appeal Nos. 10691-10692 of 2024 With Civil Appeal No. 393 of 2024 With Civil Appeal No. 10678 of 2024 And With Civil Appeal No. 10659 of 2024
Decided On : 18-10-2024
Important Points
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.
Subject
Administrative Law - Regulatory Authority Appeals
Act Referred
ADVOCATES ACT: S.38
AIRCRAFT RULES: R.88
Airport Economic Regulatory Authority of India Act: S.13, S.13(1), S.13(2), S.13(4), S.14, S.15, S.18, S.3, S.31, S.1(3)(b), S.1(3)(c)
AIRPORTS AUTHORITY OF INDIA ACT: S.28(k)
BOMBAY LAND REQUISITION ORDINANCE: S.3
CIVIL PROCEDURE CODE: O.1 R.10, S.100
COMPETITION ACT: S.18, S.26(1), S.52(t), S.53(s)(3)
COMPETITION COMMISSION OF INDIA GENERAL REGULATIONS: Reg.24, Reg.25, Reg.26
CONSTITUTION OF INDIA: Art.136, Art.19, Art.226
CONSUMER PROTECTION ACT: S.9
ELECTRICITY ACT: S.110, S.111, S.61, S.62, S.63, S.64
ESSENTIAL COMMODITIES ACT: S.3(3)(c)
KARNATAKA ELECTRICITY REFORMS ACT: S.41
MONOPOLIES AND RESTRICTIVE TRADE PRACTICES ACT: S.5(1)
TELECOM REGULATORY AUTHORITY OF INDIA ACT: S.14
AIRCRAFT RULES: R.88
Airport Economic Regulatory Authority of India Act: S.13, S.13(1), S.13(2), S.13(4), S.14, S.15, S.18, S.3, S.31, S.1(3)(b), S.1(3)(c)
AIRPORTS AUTHORITY OF INDIA ACT: S.28(k)
BOMBAY LAND REQUISITION ORDINANCE: S.3
CIVIL PROCEDURE CODE: O.1 R.10, S.100
COMPETITION ACT: S.18, S.26(1), S.52(t), S.53(s)(3)
COMPETITION COMMISSION OF INDIA GENERAL REGULATIONS: Reg.24, Reg.25, Reg.26
CONSTITUTION OF INDIA: Art.136, Art.19, Art.226
CONSUMER PROTECTION ACT: S.9
ELECTRICITY ACT: S.110, S.111, S.61, S.62, S.63, S.64
ESSENTIAL COMMODITIES ACT: S.3(3)(c)
KARNATAKA ELECTRICITY REFORMS ACT: S.41
MONOPOLIES AND RESTRICTIVE TRADE PRACTICES ACT: S.5(1)
TELECOM REGULATORY AUTHORITY OF INDIA ACT: S.14
Headnote
(A) Airport Economic Regulatory Authority of India Act, 2008 - Sections 13, 18, and 31 - Appeal maintainability - The court addressed whether the Airports Economic Regulatory Authority (AERA) can appeal against orders of the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) - The court found that AERA, as a regulatory body, has a vital interest in the outcome of appeals regarding tariff determinations, thus allowing its appeals under Section 31 - The court emphasized that AERA's role is regulatory rather than adjudicatory, and it must be considered a necessary party in such appeals. (Paras 1, 15, 67)
(B) Quasi-judicial functions - The court clarified that authorities exercising quasi-judicial functions should not defend their orders in appeals, as it compromises their neutrality - The distinction between regulatory and adjudicatory functions is crucial in determining the authority's role in appeals. (Paras 16, 24)
(C) Judicial principles - The court reiterated that principles of natural justice apply to both administrative and quasi-judicial functions, ensuring fairness in decision-making processes. (Paras 38, 60)
(B) Quasi-judicial functions - The court clarified that authorities exercising quasi-judicial functions should not defend their orders in appeals, as it compromises their neutrality - The distinction between regulatory and adjudicatory functions is crucial in determining the authority's role in appeals. (Paras 16, 24)
(C) Judicial principles - The court reiterated that principles of natural justice apply to both administrative and quasi-judicial functions, ensuring fairness in decision-making processes. (Paras 38, 60)
Legal Category Hierarchy
- administrative law
- practice and procedure
Advocates:
Advocate Appeared:
For the Appellants : Mr. R. Venkataramani, Attorney General for India Mr. Tushar Mehta, Solicitor General Mr. N. Venkataraman, A.S.G. Mr. Ritesh Kumar, AOR Mr. K.P.S. Kohli, Adv. Mr. Kartik Mittal, Adv. Mr. Dheerendra Singh Bisht, Adv. Ms. Yashasvini Chandra, Adv. Ms. Shalini Prasad, Adv. Mr. R. Venkataramani, Attorney General for India Mr. N. Venkataraman, A.S.G. Mr. Prashanto Chandra, Sr. Adv. Mr. Kartikay Agarwal, Adv. Ms. Darshita Sethia, Adv. Mr. Rashi Goswami, Adv. Ms. Yashodhara Burmon Roy, Adv. Mr. Kunal Tandon, Adv. Ms. Shweta Bharti, Adv. Mr. Kr. Shashank Shekhar, Adv. Mr. Sachin Sharma, AOR Mr. Anil Kr Gulati, Adv. Mr. Naman Sharma, Adv. Mr. Abhishek Kumar, Adv. Ms. Nur Tandon, Adv. Mr. Kunal Jindia, Adv. Mr. Nishant Anand, Adv. Mr. Sajan Poovayya, Sr. Adv. Mr. Mahesh Agarwal, Adv. Mr. Ankur Saigal, Adv. Ms. Aanchal Mullick, Adv. Ms. Sanjanthi Sajan Poovayya, Adv. Mr. Manu Kulkarni, Adv. Ms. Srishti Widge, Adv. Ms. Raksha Agarwal, Adv. Mr. Abhishek Kakker, Adv. Mr. Chirag Nayak, Adv. Mr. E. C. Agrawala, AOR Mr. Amit Pawan, AOR Mr. Buddy Ranganadhan, Adv. Ms. Nishtha Kumar, Adv. Mr. Prantar Basu Choudhury, Adv. Mr. Sahil Tagotra, AOR
For the Respondents: Dr. A.M. Singhvi, Sr. Adv. Mr. K.K. Venugopal, Sr. Adv. Mr. Arvind Datar, Sr. Adv. Mr. Sajan Poovayya, Sr. Adv. Mr. Maninder Singh, Sr. Adv. Mr. Ankur Saigal, Adv. Mr. Mahesh Agarwal, Adv. Mr. Manu Kulkarni, Adv. Mr. Hemant Sahai, Adv. Ms. Sanjanthi Sajan Poovayya, Adv. Mr. Rishi Agrawala, Adv. Ms. Amrita Narayan, Adv. Mr. Milanka Chaudhary, Adv. Mr. Manu Krishnan, Adv. Ms. Srishti Widge, Adv. Mr. Ankur Talwar, Adv. Ms. Aanchal Mullick, Adv. Mr. Chirag Nayak, Adv. Ms. Naina Dubey, Adv. Mr. Raksha Agarwal, Adv. Ms. Raksha Agarwal, Adv. Ms. Aanchal Mullick, Adv. Mr. Abhishek Kakker, Adv. Ms. Swet Shikha, Adv. Mr. Ashwin Rakesh, Adv. Mr. Udai Khanna,, Adv. Ms. Shwet Shikha, Adv. Mr. Saurobroto Dutta, Adv. Mr. Udai Khanna, Adv. Mr. Madhav Sharma, Adv. Mr. Rishubh Kapoor, Adv. Mr. E. C. Agrawala, AOR Mr. Raghav Bherwani, Adv. Ms. Anwesha Padhi, Adv. Dr. Abhishek Manu Singhvi, Sr. Adv. Mr. Hemant Sahai, Adv. Ms. Amrita Narayan, Adv. Mr. Mohit D. Ram, AOR Mr. Ashwin Rakesh, Adv. Mr. Saurobroto Dutta, Adv. Mr. Madhav Sharma, Adv. Mr. Amit Pawan, AOR Mr. Buddy Ranganadhan, Adv. Ms. Nishtha Kumar, Adv. Mr. Prantar Basu Choudhury, Adv. Mr. Shrom Sethi, Adv. Mr. Sahil Tagotra, AOR Mr. Ritesh Kumar, AOR Mr. Sarul Jain, Adv. Ms. Aditi Gupta, Adv. Ms. Amita Singh Kalkal, AOR Mr. Nikilesh Ramachandran, AOR Ms. Neelam Rathore, Adv. Mr. Lovekesh Aggarwal, Adv. Mr. Shubham Seth, Adv. Ms. Ayushi Yadav, Adv. Mr. Keshav Thakur, Adv. Mr. Virendra Mehta, Adv. Mr. Aditya Kumar Chaudhary, Adv. Mr. Mahesh Prasad, Adv. Mr. Prithvi Thakur, Adv. Mr. Gaurav Khosla, Adv. Mr. Rajesh Singh Chauhan, AOR Mr. AP Singh, Adv. Ms. Aakanksha Das, Adv. Mr. Tavinder Sidhu, Adv. Ms. Shrinkhla Tiwari, Adv. Mr. Varnit Vashistha, Adv. M/S. M. V. Kini & Associates, AOR
Advocate Appeared:
For the Appellants : Mr. R. Venkataramani, Attorney General for India Mr. Tushar Mehta, Solicitor General Mr. N. Venkataraman, A.S.G. Mr. Ritesh Kumar, AOR Mr. K.P.S. Kohli, Adv. Mr. Kartik Mittal, Adv. Mr. Dheerendra Singh Bisht, Adv. Ms. Yashasvini Chandra, Adv. Ms. Shalini Prasad, Adv. Mr. R. Venkataramani, Attorney General for India Mr. N. Venkataraman, A.S.G. Mr. Prashanto Chandra, Sr. Adv. Mr. Kartikay Agarwal, Adv. Ms. Darshita Sethia, Adv. Mr. Rashi Goswami, Adv. Ms. Yashodhara Burmon Roy, Adv. Mr. Kunal Tandon, Adv. Ms. Shweta Bharti, Adv. Mr. Kr. Shashank Shekhar, Adv. Mr. Sachin Sharma, AOR Mr. Anil Kr Gulati, Adv. Mr. Naman Sharma, Adv. Mr. Abhishek Kumar, Adv. Ms. Nur Tandon, Adv. Mr. Kunal Jindia, Adv. Mr. Nishant Anand, Adv. Mr. Sajan Poovayya, Sr. Adv. Mr. Mahesh Agarwal, Adv. Mr. Ankur Saigal, Adv. Ms. Aanchal Mullick, Adv. Ms. Sanjanthi Sajan Poovayya, Adv. Mr. Manu Kulkarni, Adv. Ms. Srishti Widge, Adv. Ms. Raksha Agarwal, Adv. Mr. Abhishek Kakker, Adv. Mr. Chirag Nayak, Adv. Mr. E. C. Agrawala, AOR Mr. Amit Pawan, AOR Mr. Buddy Ranganadhan, Adv. Ms. Nishtha Kumar, Adv. Mr. Prantar Basu Choudhury, Adv. Mr. Sahil Tagotra, AOR
For the Respondents: Dr. A.M. Singhvi, Sr. Adv. Mr. K.K. Venugopal, Sr. Adv. Mr. Arvind Datar, Sr. Adv. Mr. Sajan Poovayya, Sr. Adv. Mr. Maninder Singh, Sr. Adv. Mr. Ankur Saigal, Adv. Mr. Mahesh Agarwal, Adv. Mr. Manu Kulkarni, Adv. Mr. Hemant Sahai, Adv. Ms. Sanjanthi Sajan Poovayya, Adv. Mr. Rishi Agrawala, Adv. Ms. Amrita Narayan, Adv. Mr. Milanka Chaudhary, Adv. Mr. Manu Krishnan, Adv. Ms. Srishti Widge, Adv. Mr. Ankur Talwar, Adv. Ms. Aanchal Mullick, Adv. Mr. Chirag Nayak, Adv. Ms. Naina Dubey, Adv. Mr. Raksha Agarwal, Adv. Ms. Raksha Agarwal, Adv. Ms. Aanchal Mullick, Adv. Mr. Abhishek Kakker, Adv. Ms. Swet Shikha, Adv. Mr. Ashwin Rakesh, Adv. Mr. Udai Khanna,, Adv. Ms. Shwet Shikha, Adv. Mr. Saurobroto Dutta, Adv. Mr. Udai Khanna, Adv. Mr. Madhav Sharma, Adv. Mr. Rishubh Kapoor, Adv. Mr. E. C. Agrawala, AOR Mr. Raghav Bherwani, Adv. Ms. Anwesha Padhi, Adv. Dr. Abhishek Manu Singhvi, Sr. Adv. Mr. Hemant Sahai, Adv. Ms. Amrita Narayan, Adv. Mr. Mohit D. Ram, AOR Mr. Ashwin Rakesh, Adv. Mr. Saurobroto Dutta, Adv. Mr. Madhav Sharma, Adv. Mr. Amit Pawan, AOR Mr. Buddy Ranganadhan, Adv. Ms. Nishtha Kumar, Adv. Mr. Prantar Basu Choudhury, Adv. Mr. Shrom Sethi, Adv. Mr. Sahil Tagotra, AOR Mr. Ritesh Kumar, AOR Mr. Sarul Jain, Adv. Ms. Aditi Gupta, Adv. Ms. Amita Singh Kalkal, AOR Mr. Nikilesh Ramachandran, AOR Ms. Neelam Rathore, Adv. Mr. Lovekesh Aggarwal, Adv. Mr. Shubham Seth, Adv. Ms. Ayushi Yadav, Adv. Mr. Keshav Thakur, Adv. Mr. Virendra Mehta, Adv. Mr. Aditya Kumar Chaudhary, Adv. Mr. Mahesh Prasad, Adv. Mr. Prithvi Thakur, Adv. Mr. Gaurav Khosla, Adv. Mr. Rajesh Singh Chauhan, AOR Mr. AP Singh, Adv. Ms. Aakanksha Das, Adv. Mr. Tavinder Sidhu, Adv. Ms. Shrinkhla Tiwari, Adv. Mr. Varnit Vashistha, Adv. M/S. M. V. Kini & Associates, AOR
Table of Contents
2. Maintainability of appeal by regulatory authority — Whether a quasi-judicial body can be an aggrieved party or defend its own orders in appeal. (Para 13 , 14 )
3. Distinction between adjudicatory and regulatory functions — Tariff determination by AERA involves policy considerations and public interest, characterizing it as a regulatory rather than purely adjudicatory function. (Para 16 , 17 , 18 , 19 , 20 , 21 , 22 , 23 , 24 , 25 , 26 , 27 , 28 , 29 , 30 , 31 , 32 , 33 , 34 , 35 , 36 , 37 , 38 , 39 , 40 , 41 , 42 , 43 , 44 , 45 , 46 , 47 , 48 , 49 , 50 , 51 , 52 , 53 , 54 , 55 , 56 , 57 , 58 , 59 , 60 , 61 , 62 , 63 , 64 , 65 , 66 )
4. Statutory authorities exercising regulatory functions, as opposed to purely adjudicatory ones, can be impleaded as parties and prefer appeals to protect public interest. (Para 33 , 63 )
5. Appeals filed by AERA against orders of TDSAT under Section 31 of the AERA Act are held maintainable. (Para 67 )
6. Can a statutory authority be a party to an appeal against its own order?
Yes, if the order was issued in its regulatory role to protect public interest or if its presence is necessary for effective adjudication due to domain expertise. However, an authority must not be impleaded if the order was issued solely in the exercise of an adjudicatory function. (Para 33 )
7. What is the test to distinguish between adjudicatory and regulatory functions in tariff determination?
The court examines whether the function is based on general policy considerations and public interest (regulatory) or operates upon individuals in their individual capacity based on legal rights (adjudicatory). Legislative actions can be based on objective criteria but remain regulatory if they serve general public interests. (Para 46 , 47 , 58 )
8. Does the requirement to follow principles of natural justice make a function adjudicatory?
No. The duty to act fairly and comply with natural justice applies to both administrative and quasi-judicial actions. Therefore, the requirement for consultations and reasoned decisions does not automatically render a regulatory function an adjudicatory one. (Para 42 , 43 , 60 )
9. Is a regulatory authority a necessary party in appeals against its tariff orders?
Yes, because it has a statutory duty to ensure economic viability and public interest. In such cases, the authority acts as an interested party seeking to preserve the public interest animating the statute, rather than as a neutral arbitrator. (Para 63 )
JUDGMENT :
Dhananjaya Y. Chandrachud, CJI.
| INDEX | |
| A. | Statutory Background |
| B. | Submissions |
| C. | Issues |
| D. | Analysis |
| i. Authorities exercising ‘adjudicatory functions’ cannot defend their orders in appeal | |
| ii. Necessary and proper parties in regulatory proceedings | |
| iii. The test of quasi-judicial functions: A misnomer | |
| iv. The test for determining an ‘adjudicatory function’: Exploring Sitaram Sugar | |
| v. Whether tariff determination is an adjudicatory function: PTC and GRIDCO | |
| vi. Tariff determination for aeronautical services by AERA is a regulatory function | |
| vii. Interpretation of Sections 18 and 31 of the AERA Act | |
| E. | Conclusion |
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 s
