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2014 Supreme(Bom) 2179
IN THE HIGH COURT OF BOMBAY
S.C. Dharmadhikari and B.P. Colabawalla, JJ.
Mumbai International Airport Private Ltd. – Appellant
Vs.
Union of India – Respondent
Writ Petition No. 584 and 697 of 2013
Decided On : 13.10.2014
Advocate Appeared:
For the Appellants : V. Sridharan, Senior Counsel, Prakash Shah, Jas Sanghavi, Rahul Thakar i/b. PDS Legal
For the Respondents: Pradeep S. Jetly
Regulation 5(2) of the Handling of Cargo in Customs Areas Regulations, 2009 is not ultra vires section 157 and 158 of the Customs Act, 1962, or ultra vires Article 14 and Article 19(1)(g) of the Constitution of India.
Headnote:
CUSTOMS ACT - Regulation 5(2) of the Handling of Cargo in Customs Areas Regulations, 2009 - Applicability to Private Limited Companies operating and managing Chhatrapati Shivaji International Airport, Mumbai, and the Air Cargo Complex, Sahar, Mumbai - Whether ultra vires section 157 and 158 or any other provision of the Customs Act, 1962 - Whether ultra vires Article 14 and Article 19(1)(g) of the Constitution of India.
Fact of the Case:
The Petitioners, Private Limited Companies, were granted an in-principle approval for developing the Chhatrapati Shivaji International Airport, Mumbai, and the adjoining Air Cargo Complex. They entered into an Operation, Development and Maintenance Agreement (OMDA) with the Airports Authority of India (AAI) and a State Support Agreement (SSA) with the President of India acting through the Secretary, Ministry of Civil Aviation of Government of India. The Petitioners were given the exclusive right to operate, develop, manage and maintain CSIA including the Air Cargo Complex (a part thereof) but excluding certain activities such as customs, immigration, security etc. (known and defined as Reserved Activities under OMDA) for a period of 30 years, renewable for a further period of 30 years. The Petitioners were appointed as custodian of the Air Cargo Complex under section 45 of the Customs Act, 1962. The Petitioners were required to bear the cost of Customs staff posted at the Air Cargo Complex on cost recovery basis, as per Regulation 5(2) of the Handling of Cargo in Customs Areas Regulations, 2009. The Petitioners challenged the validity of Regulation 5(2) on the grounds that it was ultra vires section 157 and 158 of the Customs Act, 1962, and ultra vires Article 14 and Article 19(1)(g) of the Constitution of India.
Finding of the Court:
The Court held that Regulation 5(2) of the Handling of Cargo in Customs Areas Regulations, 2009 was not ultra vires section 157 and 158 of the Customs Act, 1962, or ultra vires Article 14 and Article 19(1)(g) of the Constitution of India. The Court found that the Petitioners were custodians within the meaning of section 45 of the Customs Act, 1962, and were therefore liable to comply with the mandate of Regulation 5(2) of the Regulations. The Court also found that the cost recovery charges were not in the nature of a tax or a fee, but were in the nature of reimbursement of the costs incurred on the Customs staff posted at the Air Cargo Complex.
Issues: 1. Whether Regulation 5(2) of the Handling of Cargo in Customs Areas Regulations, 2009 is ultra vires section 157 and 158 of the Customs Act, 1962? 2. Whether Regulation 5(2) of the Handling of Cargo in Customs Areas Regulations, 2009 is ultra vires Article 14 and Article 19(1)(g) of the Constitution of India?
Ratio Decidendi: 1. Regulation 5(2) of the Handling of Cargo in Customs Areas Regulations, 2009 is not ultra vires section 157 and 158 of the Customs Act, 1962, as it is traceable to the legal provision contained in section 141(2) of the Customs Act, 1962, which enables the authorities to frame the regulations so that responsibilities of person engaged in all the activities are fixed. 2. Regulation 5(2) of the Handling of Cargo in Customs Areas Regulations, 2009 is not ultra vires Article 14 and Article 19(1)(g) of the Constitution of India, as the cost recovery charges are not in the nature of a tax or a fee, but are in the nature of reimbursement of the costs incurred on the Customs staff posted at the Air Cargo Complex.
Final Decision: The Court dismissed both the Writ Petitions filed by the Petitioners.
S.C. Dharmadhikari, J.
1. These two Petitions have been placed before us and both sides requested that they be disposed of finally. We have acceded to this request of the parties and their counsel and accordingly heard them extensively. Hence, Rule. Respondents waive service. By consent, Rule made returnable forthwith.
2. The four essential reliefs that are prayed in this Writ Petition are as under:-
"(a) That this Court be pleased to issue a writ of Mandamus or an appropriate writ, order or direction under Article 226 of the Constitution of India declaring that the Regulation 5(2) of the Handling of Cargo in Customs Areas, 2009 is inapplicable to the Petitioner.
(b) That this Court be pleased to issue a writ of Mandamus or an appropriate writ, order or direction under Article 226 of the Constitution of India declaring that the Regulation 5(2) of the Handling of Cargo in Customs Areas, 2009 is ultra vires section 157and 158 or any other provision of the Customs Act, 1962.
(c) That this Court be pleased to issue a writ of Mandamus or a writ in the nature of Mandamus or any other appropriate writ or order or direction under Article 226 of the Constitution of India declaring that the Regulation 5(2) of the Handling of Cargo in Customs Areas Regulations, 2009 is ultra vires Article 14 and Article 19(1)(g) of the Constitution of India.
(d) That this Court be pleased to issue a writ or Mandamus or a writ in the nature of Mandamus or any other appropriate writ or order or direction under Article 226 of the Constitution of India calling for the records pertaining to the Petitioner's case and after going into the validity and legality thereof to quash the demand notices dated 8th June, 2011, 18th July, 2011, 29th March, 2012, 16th April, 2012 and 13th June, 2012.
3. The Petitioners in these two Petitions are Private Limited Companies registered under the provisions of Indian Companies Act, 1956. They are, inter alia, engaged in the operation, management and development of Chhatrapati Shivaji International Airport, Mumbai, (for short "C.S.I.A.") and the Air Cargo Complex, Sahar, Mumbai. The Respondents are the officers and authorities exercising powers under the Customs Act, 1962 and the regulations framed thereunder.
4. The Petitioners submit that as a part of the policy to encourage private sector participation in the development of Airport infrastructure, the Government of India granted an in-principle approval for developing the C.S.I.A. and the adjoining Air Cargo Complex. The Petitioner company was selected as a successful bidder through the bidding process for the purposes of implementation of this policy. In terms of this decision, the necessary legislations, namely, the Airport Authority of India Act, 1994 were amended. The Petitioner herein entered into an Operation, Development and Maintenance Agreement dated 4th April, 2006 with the Airports Authority of India (hereinafter referred to as 'OMDA') and a State Support Agreement dated 26th April, 2006 (hereinafter referred to as 'SSA') with the Hon'ble President of India acting through the Secretary, Ministry of Civil Aviation of Government of India. In terms of these agreements, in particular, the OMDA, the Petitioner was given the exclusive right to operate, develop, manage and maintain CSIA including the Air Cargo Complex (a part thereof) but excluding certain activities such as customs, immigration, security etc. (known and defined as Reserved Activities under OMDA) for a period of 30 years, renewable for a further period of 30 years.
5. The Petitioners further submit that pursuant to the OMDA and in view of section 12A of the Airports Authority of India Act, 1994, the Airports Authority of India entered into a Lease Deed dated 26th April, 2006 with the Petitioner by means of which all the lands (along with any buildings, constructions or immovable assets, if any thereon) of CSIA, as stated therein, were leased to the Petitioner for a period of 30 years.
6. The Petitioners s
