2025 Supreme(Online)(TDSAT) 33

TELECOM DISPUTES SETTLEMENT AND APPELLATE TRIBUNAL
Dhirubhai Naranbhai Patel, Chairperson, Subodh Kumar Gupta, Member
GMR Goa International Airport Ltd. – Appellant
Versus
Airport Economic Regulatory Authority of India – Respondent
AERA APPEAL/1/2024|With M.A. No. 99 of 2025

Regulator must use actual costs/revenues from competitive processes, adhere to binding precedents without stay, respect concessions, and ensure economic viability via true-up; cannot impose normative caps, minimum thresholds, or unilateral rates in PPP airports.

Headnote:(A) Airport Economic Regulatory Authority Act, 2008 - Sections 13(1)(a), 18(2) - Tariff determination for aeronautical services - Mandatory consideration of actual capital expenditure incurred (Section 13(1)(a)(i)), economic viability (Section 13(1)(a)(iv)), non-aeronautical revenues received (Section 13(1)(a)(v)), and concessions offered (Section 13(1)(a)(vi)) - Regulator cannot substitute normative figures for actuals derived from competitive bidding, impose arbitrary caps on financing costs, prescribe minimum revenue thresholds, or disregard binding appellate precedents absent stay - Actual project management consultancy expenses, measured terminal building ratios, weighted-average cost of debt with true-up, operation & maintenance contractor fees (subject to approval), license fees from independent service providers and airlines as non-aeronautical, interest/treasury income as other income excluded from cross-subsidy, 30% non-aeronautical revenue in tax base, and consistent interest cost methodology upheld - Unilateral rate card finalization without hearing in competitive dual-airport scenario set aside. (Paras 91-140, 157-252, 260)

(B) Regulatory Precedent - Binding effect of appellate rulings - Mere pendency of appeal does not suspend operation of ratio decidendi; non-compliance despite knowledge constitutes jurisdictional error, judicial indiscipline, and prejudice to certainty in capital-intensive PPP concessions - True-up mechanism reconciles supervening changes. (Paras 178-205)

Facts of the case:
Appeal under Section 18(2) challenging tariff order for first control period of greenfield PPP airport - Operator contested ten determinations including PMC expense reduction, terminal ratio, cost of debt cap, O&M fees disallowance, revenue classifications, minimum non-aeronautical threshold, tax base exclusion, interest inconsistency, and rate card - Regulator defended normative approach per hybrid-till, consultations; intervener supported aeronautical treatment of certain fees.

Findings of Court:
Impugned order quashed on all ten grounds; regulator directed to recompute aggregate revenue requirement and tariff incorporating actuals, true-up provisions, concession entitlements; opportunity mandated for rate card representations considering nearby competition.

Issues: Whether regulator exceeded jurisdiction by normativising actual costs/revenues, disregarding concession, flouting precedents on debt/interest/tax, imposing minimum revenue thresholds, inconsistently treating components, and finalising rates sans hearing.

Ratio Decidendi: Section 13(1)(a) mandates actuals over hypotheticals; precedents bind unless stayed; concessions circumscribe regulatory prudence; viability demands market-linked parameters with true-up; revenue classification turns on service rendition; tax base includes cross-subsidy quantum.

Result: Appeal allowed.

Table of Content
1. appeal challenges aera's tariff order overreach. (Para 1 , 2 , 3 , 4 , 5 , 6)
2. timeline of airport concession and tariff proposals. (Para 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14)
3. pmc expenses reduction violates actual capex mandate. (Para 15 , 16 , 17 , 18 , 19 , 20)
4. actual terminal ratio over img norms for ppp airports. (Para 21 , 22 , 23 , 24 , 108 , 109 , 110 , 111)
5. actual floating cod required, not normative cap. (Para 25 , 26 , 27 , 28 , 29 , 30 , 31 , 121 , 122 , 123)
6. o&m contractor fees allowable per concession. (Para 32 , 33 , 34 , 141 , 142)
7. license fees from isps as non-aeronautical revenue. (Para 35 , 36 , 37 , 158 , 159 , 160)
8. interest income excluded from nar as other income. (Para 38 , 39 , 169 , 170)
9. no minimum nar threshold; true-up on actuals. (Para 40 , 41 , 42 , 206 , 207)
10. 30% nar included in aeronautical tax base. (Para 43 , 44 , 45 , 232)
11. actual cod for aeronautical interest cost computation. (Para 47 , 48 , 49 , 242 , 243)
12. hearing required for competitive tariff rate card. (Para 50 , 51 , 253 , 254)
13. aera defends tariff per statutory factors and guidelines. (Para 52 , 53 , 54 , 55 , 56 , 57 , 58)
14. fia supports aeronautical classification of license fees. (Para 74 , 75 , 76 , 77 , 78 , 79 , 80 , 81)
15. pmc via competitive bidding is actual capex. (Para 83 , 84 , 85 , 86 , 87 , 88 , 89 , 90)
16. section 13(1)(a)(i) mandates actual capex consideration. (Para 91 , 92 , 93 , 94 , 95)
17. actual tbr for greenfield ppp airport. (Para 112 , 113 , 114 , 115 , 116)
18. tribunal precedents require actual cod. (Para 124 , 125 , 126)
19. concession terms bind aera on o&m. (Para 144 , 145 , 146)
20. exhaustive aeronautical services definition excludes land fees. (Para 161 , 162 , 163 , 164)
21. interest not from service rendition; other income. (Para 172 , 173 , 174)
22. 30% nar cross-subsidy partakes aeronautical character for tax. (Para 234 , 235 , 236)
23. aera must follow binding tdsat precedents. (Para 261 , 262 , 271)

JUDGEMENT

Per Justice D.N. PATEL, Chairperson SUMMARIUM

1. This appeal has been preferred under Section 18 (2) of the Airport Economic Regulatory Authority of India Act, 2008 (“AERA Act”) challenging an Order No. 27/2023-24 dated 07.12.2023 issued by Airports Economic Regulatory Authority of India (“AERA” “the Authority”) in the matter of determination of Aeronautical Tariff for First Control Period i.e. 01.04.2023- 31.03.2028. The order passed by AERA is under Section 13 (1) (a) of the AERA Act, 2008 for Manohar International Airport Ltd. (MOPA), Goa (MI Airport) operated by the appellant.

2. The gravamen of the controversy centres upon AERA's alleged overreach beyond its statutory remit under Section 13 (1) (a) of the AERA Act,2008, the Tariff Guidelines of 2011, and the DBFOT & Concession Agreement, in adjudicating the tariff matrix. The appellant assails ten discrete determinations in the impugned order, including: (i) a 0.5% reduction in PMC expenses; (ii) application of a 90:10 terminal building aero:non- aero ratio instead of actual measurements; (iii) adoption of a normative 9% Cost of Debt rather than actual, floating Rate CoD; (iv) non-recognition of proposed O&M contractor fees as O&M expense; (v) classification of license fees from cargo/ground handling/fuel farm ISPs and airline space rentals as aeronautical revenue; (vi) treatment of interest income as non-aeronautical at true-up; (vii) prescription of a minimum NAR threshold (₹509.47 cr) with limited true-up; (viii) exclusion of 30% NAR from the aeronautical tax base; (ix) interest-cost methodology and consistency; and (x) finalization of the tariff rate card, including concerns over parity with the nearby Dabolim airport.

3. Meanwhile, AERA maintains that its order faithfully applies Section 13(1)(a) factors and the hybrid-till framework, after consultation and expert review. It has defended the PMC rationalization, the 90:10 terminal allocation as standardized and replicable, the 9% CoD as market-linked,

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