IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 25^TH DAY OF JANUARY, 2025 BEFORE THE HON'BLE MR. JUSTICE K. V. ARAVIND WRIT PETITION No.12799/2014 (GM-RES)

BETWEEN:

1 . BANGALORE INTERNATIONAL AIRPORT LIMITED, A COMPANY INCORPORATED UNDER THE INDIAN COMPANIES ACT, 1956, HAVING ITS REGISTERED OFFICE AT ADMINISTRATION BLOCK, KEMPEGOWDA INTERNATIONAL AIRPORT, BANGALORE, BANGALORE-560 300.

REPRESENTED BY ITS SENIOR MANAGER-LEGAL MR. AKSHAY RAM APTE, ...PETITIONER (BY SRI MANU PRABHAKAR KULKARNI, ADVOCATE)

AND:

1 . UNION OF INDIA, MINISTRY OF CIVIL AVIATION, 'B' BLOCK, RAJIV GANDHI BHAVAN, SAFDARJUNG AIRPORT, NEW DELHI-110003, REP. BY ITS SECRETARY.

2 . UNDER SECRETARY TO THE GOVT. OF INDIA, MINISTRY OF CIVIL AVIATION, B-BLOCK, RAJIV GANDHI BHAVAN, SAFDARJUNG AIRPORT, NEW DELHI-110003.

…RESPONDENTS (BY SRI SHANTHI BHUSHAN, DSGI FOR R1 & R2)

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE IMPUGNED ORDER DATED 18.2.2014, ISSUED BY R-1 AS ILLEGAL, ARBITRARY & UNCONSTITUTIONAL & SET ASIDE THE SAME (ANNEXURE-K).

THIS WRIT PETITION HAVING BEEN HEARD AND RESERVED FOR ORDERS, COMING ON FOR PRONOUNCEMENT THIS DAY, THE COURT PRONOUNCED THE FOLLOWING:

CORAM: HON'BLE MR. JUSTICE K. V. ARAVIND C.A.V. ORDER Heard learned counsel Sri. Manu Prabhakar Kulkarni for the petitioner and Sri. Shanthi Bhushan, learned Deputy Solicitor General of India for respondents.

2. The present petition is filed seeking to quash the order dated February 18, 2014, passed by Respondent No.1, which directs that the Passenger Service Fee (Security Component) (PSF(SC)) collected by the petitioner for the purpose of providing security equipment and services, after being debited for such expenses, be reimbursed into the respective Escrow account.

3. The brief facts leading to this petition are that, the petitioner is a Company incorporated under the Companies Act, 1956 engaged in the business of development, design, financing, construction, commissioning, maintenance, operation and Management of Kempegowda International Airport, Bengaluru (KIAB). The petitioner and respondent No.1 entered into a Concession Agreement dated 05.07.2004. As per the Concession Agreement, certain services are to be provided by respondent No.1 and remaining by the petitioner. The Concession Agreement also stipulates security equipment and personnel for the security and operation of the Airport.

4. The petitioner is authorized to collect a Passenger Service Fee of Rs.200/- per passenger, of which Rs.70/- shall be retained by the petitioner for passenger facilitation and Rs.130/- shall be deposited into an Escrow account to be utilized for payments to the Central Industrial Security Force (hereinafter referred to as 'CISF'). The Concession Agreement stipulates the obligations of the Government of India and the petitioner relating to providing and maintaining security equipment.

5. The petitioner has utilized the amount deposited in the Escrow account for the purchase of security equipment, which constitutes capital expenditure. However, the respondents, as per the impugned order, contend that the Passenger Service Fee (Security Component) [PSF(SC)] is intended solely for revenue expenditure, including the deployment of CISF and other security forces at the Airport. The order further asserts that Airport Operators hold and maintain the Escrow account in a fiduciary capacity and must utilize the funds as directed by respondent No. 1. It concludes that the use of PSF(SC) for capital expenditure is improper and directs that such amounts be reimbursed.

6. The impugned order applied to all private operators and Joint Venture Companies (JVCs) managing Airports. In response, the companies operating Airports filed writ petitions before the respective High Courts. A transfer petition was subsequently filed before the Hon'ble Supreme Court, seeking the transfer of these cases. The Hon'ble Supreme Court, on various dates, allowed the pending writ petitions