The impugned circular restricting excess check-in baggage charges was set aside as it was beyond the powers conferred on DGCA by virtue of Section 5A of the Aircraft Act, 1934 and Rule 135(4) of the Aircraft Rules.

Vibhu Bakhru, J.

1. Federation of Indian Airlines (petitioner no.1) along with its member airlines (hereafter “the petitioner airlines”) have filed the present petition assailing the Air Transport Circular no.02 of 2016, (hereafter “the impugned circular”) issued on 10.06.2016 by respondent no.1 (hereafter “DGCA”). In terms of the impugned circular, the charges for check-in baggage weighing between 15 kg to 20 kg (that is, above the 15 kg free check-in baggage allowance) have been restricted to a maximum of Rs.100 per kg.

2. The impugned circular came in force with effect from 15.06.2016 and superseded the earlier circular no.03 of 2015 dated 08.11.2015, which left it open for the concerned airlines to determine the charges for check-in baggage over and above the free baggage allowance of 15 kg.

3. The petitioners claim that the impugned circular has been issued in contravention of the provisions of the Aircraft Act, 1934 (hereafter “the Act”) and the Aircraft Rules, 1937 (hereafter “the Aircraft Rules”). The impugned circular has also been challenged as being violative of Article 19(1)(g) read with Article 301 of the Constitution of India.

4. Before proceeding to address the aforesaid controversy, it is necessary to notice the relevant context in which the present controversy arises.

5. In order to provide option to the passengers to only pay for the services that are availed, it was decided to unbundle certain services; meaning thereby that the airlines could charge separately for such services. The same was communicated by the Ministry of Civil Aviation (respondent no.2) to DGCA by a letter dated 30.04.2013. The second paragraph of the said letter, which indicates the services to be unbundled, reads as under:-

"2. The issue of unbundling of services and fees by scheduled Airlines has been examined and it has been decided with the approva1 of competent authority that for the time being, the following services only may be included for unbundling:

(i) Preferential Seating.

(ii) Meal/snack/drink charges (Except drinking water)

(iii) Charge for using Airline lounges.

(iv) Check in baggage charges.

(v) Sports equipment charges.

(vi) Musical instrument carriage.

(vii) Fee for special declaration of valuable baggage - (allow for higher unit on carrier liability)."

6. The approval for unbundling of services was given subject to certain conditions as specified in the letter dated 30.04.2013, which included that all unbundled services would be provided on "opt-in basis" and not "opt-out basis"; and the charges for unbundled services/flight products would be fixed amounts and announced by the airlines well in advance. It was further specifically provided that DGCA would not fix the fees for unbundled services but would reserve the right to intervene and stop the airlines from charging for any specific flight product, if the regulatory principles were not followed.

7. Pursuant to the letter dated 30.04.2013, DGCA issued circulars providing for unbundling of services to be charged separately on opt-in basis. On 08.11.2015, DGCA issued circular no.03 of 2015, which inter alia provided for unbundling of the service of check-in baggage, above 15 kg of free check-in baggage allowance. The relevant extract of the circular dated 08.11.2015 is as under:-

“2. The airfares so established by the airlines also include charges for some of the services rendered by them. On the basis of various feedback received, it is felt that many a times these services provided by the airlines may not be required by the passengers while travelling. Considering the fact that unbundling of services and charges thereto has the potential to make basic fare more affordable and provides consumer an option of paying for the services which he/she wishes to avail, it has been decided by the Government to allow following services to be unbundled and charged separately on opt-in basis:

xxxx xxxx xxxx

(iv) Check-in baggage charges (above 15 kgs. of free check-in baggage allowance). H