Consumer Online Foundtion vs Union Of India & Ors

Union of India & Ors., etc. ... Respondents

WITH

CIVIL APPEAL NO.3612 OF 2011

[Arising out of S.L.P. [C] No.23541 of 2009],

CIVIL APPEAL NO.3613 OF 2011

[Arising out of S.L.P. [C] No.29471 of 2009]

AND

CIVIL APPEAL NO.3614 OF 2011

[Arising out of S.L.P. [C] No. 11799 of 2011]

[CC No.1066/2010]

J U D G M E N T

A. K. PATNAIK, J.

Application for permission to file SLP in SLP [C]

No.11799/2011 [CC No.1066/2010] is allowed and delay

condoned.

2. Leave granted.

2 3. These are appeals against the judgment and order

dated 26.08.2009 of the Division Bench of the Delhi High

Court in public interest litigations upholding the validity of

levy of development fees on the embarking passengers by

the lessees of the Airports Authority of India at the Indira

Gandhi International Airport, New Delhi and the

Chhatrapati Shivaji International Airport, Mumbai.

Relevant Facts:

4. The Airports Authority of India Act, 1994 (for short `the

1994 Act') came into force on 01.04.1995 and under Section

3 of the 1994 Act, the Central Government constituted the

Airports Authority of India (for short `the Airports

Authority'). Section 12 of the 1994 Act enumerates the

various functions of the Airports Authority. By the Airports

Authority of India (Amendment) Act, 2003 (for short `the

Amendment Act of 2003'), Sections 12A and 22A were

inserted in the 1994 Act with effect from 01.07.2004. The

newly inserted Section 12A provides that the Airports

Authority may make a lease of the premises of an airport to

carry out some of its functions under Section 12 as the

Airports Authority may deem fit. The newly inserted Section

3

22A of the 1994 Act provides that with the approval of the

Central Government, the Airports Authority may levy on,

and collect from, the embarking passengers at an airport,

the development fees at the rate as may be prescribed. On

04.04.2006, the Airports Authority leased out the Indira

Gandhi International Airport, New Delhi (for short `the Delhi

Airport') to the Delhi International Airport Private Limited

(for short `DIAL') and also leased out the Chhatrapati Shivaji

International Airport, Mumbai (for short `the Mumbai

Airport') to Mumbai International Airport Private Limited (for

short `MIAL'). Section 22A of the 1994 Act was amended by

the Airports Economic Regulatory Authority of India Act,

2008 (for short `the 2008 Act') and the amended Section 22A

provided for determination of the rate of development fees

for the major airports under clause (b) of sub-section (1) of

Section 13 of the 2008 Act by the Airports Economic

Regulatory Authority (for short `the Regulatory Authority').

The amended Section 22A was to take effect on and from

the date of the establishment of the Regulatory Authority.

The Government of India, Ministry of Civil Aviation, sent a

letter dated 09.02.2009 to DIAL conveying the approval of

4

the Central Government under Section 22A of the 1994 Act

for levy of development fees by DIAL at the Delhi Airport at

the rate of Rs.200/- per departing domestic passenger and

at the rate of Rs.1300/- per departing international

passenger inclusive of all applicable taxes, purely on ad hoc

basis, for a period of 36 months with effect from

01.03.2009. Similarly, the Government of India, Ministry of

Civil Aviation, sent another letter dated 27.02.2009 to MIAL

conveying the approval of the Central Government under

Section 22A of the 1994 Act for levy of development fees by

MIAL at the Mumbai Airport at the rate of Rs.100/- per

departing domestic passenger and at the rate of Rs.600/-

per departing international passenger inclusive of all

applicable taxes, purely on ad hoc basis, for a period of 48

months with effect from 01.04.2009. The levy of

development fees by DIAL as the lessee of the Delhi Airport

was challenged in Writ Petition No. 8918/2009 by

Resources of Aviation Redressal Association. The levy of

development fees by DIAL and MIAL as lessees of the Delhi

and Mumbai Airports were challenged in Writ Petition No.

9316 of 2009 and Writ Petition No. 9307 of 2009 by

5

Consumer Online Foundation. The Writ petitioners

contended inter alia that such levy of development fees

under Section 22A of the 1994 Act can only be made by the

Airports Authority and not by the lessee and that until the

rate of such levy is either prescribed by the Rules made

under the 1994 Act or determined by the Regulatory

Authority under the 2008 Act as provided in Section 22A of

the Act before and after its amendment by the 2008 Act, the

levy and collection of development fees are ultra vires the

1994 Act. The Division Bench of the High Court, after

hearing, held that there was no illegality attached to the

imposition of development fees by the two lessees with the

prior approval of the Central Government and dismissed the

writ petitions by the impugned judgment and order.

Conclusions of the High Court:

5. In the impugned judgment and order, the High Court

held that under sub-section (1) of Section 12A of the 1994

Act, the Airports Authority is empowered to lease an airport

for the performance of its functions under Section 12 and

such a lease is a statutory lease which enables the lessee to

perform the functions of the Airports Authority enumerated

6

in Section 12. The High Court further held that sub-section

(4) of Section 12A provides that the lessee who has been

assigned some functions of the Airports Authority under

sub-section (1) shall have "all" the powers of the Airports

Authority necessary for the performance of such functions

in terms of the lease and use of the word "all" indicates that

the lessee would have each and every power of the Airports

Authority for the purpose of discharging such functions

including the power under Section 22A to levy and collect

development fees from the embarking passengers. The High

Court took the view that development fee though described

as fee in Section 22A is more akin to a charge or tariff for

the facilities provided by the Airports Authority to the

airlines and passengers. The High Court came to the

conclusion that the exercise of the power to levy and collect

development fees under Section 22A was not dependent on

the existence of the rules and, therefore, this power can be

exercised even if the rules have not framed prescribing the

rate of development fees under Section 22A (before its

amendment by the 2008 Act). In coming to this conclusion,

the High Court relied on the decisions of this Court in U.P.

7

State Electricity Board, Lucknow v. City Board, Mussorie &

Ors. [(1985) 2 SCC 16], Mysore Road Transport Corporation

v. Gopinath Gundachar Char [AIR 1968 SC 464] and Sudhir

Chandra Nawn v. Wealth- Tax Officer, Calcutta & Ors. [1969

(1) SCR 108].

Contentions on behalf of the appellants:

6. Mr. Fali S. Nariman, learned senior counsel, leading

the arguments on behalf of the appellants, made these

submissions:

(i) The conclusion of the High Court that the power under

Section 22A to levy and collect the development fees from

the embarking passengers can be exercised without the

rules is erroneous because the language of Section 22A of

the 1994 Act prior to its amendment by the 2008 Act makes

it clear that development fees could be levied and collected

from the embarking passengers at the airport "at the rate as

may be prescribed" and the fees so collected are to be

credited to the Airports Authority and are to be regulated

and utilized "in the prescribed manner". Unless, therefore,

the statutory rules are made prescribing the rate at which

8

such fees are to be collected and prescribing the regulation

and manner of the utilization of development fees, the power

under Section 22A cannot be exercised. After the

amendment by the 2008 Act, Section 22A(ii) provides that

the development fee to be levied on and collected from the

embarking passengers at major airports, such as the Delhi

Airport and the Mumbai Airport, would be at the rate as

may be determined under Clause (b) of sub-section (1) of

Section 13 of the 2008 Act. The Regulatory Authority has

been established by notification dated 12.05.2009 and

unless the rate of development fees is determined by the

Regulatory Authority under Clause (b) of sub-section (1) of

Section 13 of the 2008 Act, the same cannot be levied and

collected from the embarking passengers at the two major

airports. The determination of the rate of development fees

to be levied at the two major airports under Clause (b) of

sub-section (1) of Section 13 of the 2008 Act by the

Regulatory Authority of India is still pending and the

impugned levy of development fees by DIAL and MIAL are,

therefore, ultra vires.

9 (ii) The purposes for which the development fees are to be

levied and collected are indicated in clauses (a), (b) and (c) of

Section 22A of the 1994 Act and these are:

(a) funding or financing the costs of upgradation,

expansion or development of the airports at which the

fees is collected, or

(b) establishment or development of a new airport in lieu

of the existing airport, or

(c) investment in the equity in respect of shares to be

subscribed by the Airports Authority in companies

engaged in establishing, owning, developing, operating

or maintaining a private airport in lieu of the existing

airport or advancement of loans to such companies or

other persons engaged in such activities.

Under the 1994 Act, it is only the Airports Authority which

can carry out these three purposes and not the lessee of the

Airports Authority under Section 12A of the 1994 Act and,

therefore, the lessee can have no power to levy and collect

the development fees from the embarking passengers. He

argued that the conclusion of the High Court in the

impugned judgment and order, that under sub-section (4) of

1

Section 12A of the 1994 Act, the lessee having been

assigned some of the functions of the Airports Authority has

all the powers of the Airports Authority necessary for the

performance of such functions in terms of the lease

including the power to levy development fees under Section

22A of the 1994 Act, is therefore not correct. He referred to

the various provisions of the Operation, Management and

Development Agreement (for short `OMDA') and the State

Support Agreement executed between the Airports Authority

and DIAL/MIAL to show that the power to levy development

fees from the embarking passengers have in fact not been

assigned by the Airports Authority to DIAL/MIAL.

Reply on behalf of the Union of India:

7. Mr. Gopal Subramanium, learned Solicitor General

appearing for the Union of India, made these submissions:

(i) Section 12A of the 1994 Act begins with a non-

obstante clause and it empowers the Airports Authority to

lease the premises of an airport to a third party to carry out

some of its functions under Section 12 of the 1994 Act and

in exercise of this power the Airports Authority and the

1

DIAL and the Airports Authority and MIAL have entered into

agreements in respect of the leases and the Airports

Authority has delegated some of its functions to DIAL and

MIAL in respect of the Delhi Airport and Mumbai Airport

respectively. A reading of the lease agreements (OMDA)

would show that the functions of operation, maintenance,

development, design, construction, up-gradation,

modernization, finance and management of the airports are

to be carried out by the two lessees. If DIAL and MIAL have

to carry out these functions under the lease agreement to

develop, finance, design, construct, modernize, operate,

maintain, use and regulate the use of the airports by the

third party, they must have power to determine, demand,

collect and retain appropriate charges from the users of the

airports.

(ii) Section 22A of the 1994 Act permits the Airports

Authority after previous approval of the Central Government

to levy on and collect from embarking passengers at an

airport development fees. Accordingly, after the lease of the

two airports by the Airports Authority to DIAL and MIAL,

the Central Government has conveyed its approval in the

1

two letters dated 09.02.2009 and 27.02.2009 to DIAL and

MIAL for levy of development fees by DIAL and MIAL

respectively from the two airports. Such approval conveyed

by the Central Government is entirely in accordance with

Section 12A of the 1994 Act. In view of sub-section (4) of

Section 12A of the 1994 Act providing that a lessee who has

been assigned any of the functions of the Airports Authority

would have all the powers of the Airports Authority

necessary for the performance of such function in terms of

the lease, the power of the Airports Authority to levy the

development fees has also been rightly assigned to DIAL and

MIAL. A reading of the two approval letters would show that

various conditions and safeguards have been incorporated

in the approval letters to protect the interest of the public

and to provide rigorous checks with regard to the manner in

which DIAL and MIAL can deal with the fees collected by

them and it will be clear from the approval letters that the

fees can be utilized only for the purpose mentioned in

Section 22A of the 1994 Act.

(iii) The purposes mentioned in clauses (b) and (c), namely,

"development of a new airport" and "a private airport"

1 respectively relate to the very airport in respect of which the

lease is executed and fees are collected, as it would be clear

from the expression "in lieu of the airport referred to in

clause (a)". It is significant that Section 12A and Section

22A of the 1994 Act were both introduced by the same

Amendment Act of 2003.

(iv) Though Section 22A of the 1994 Act, before its

amendment by the 2008 Act provided that for levy of

development fees "at the rate as may be prescribed" and for

regulation and utilization of the development fees "in the

prescribed manner", the absence of the rules prescribing the

rate of development fees or the manner of regulation and

utilization of development fees will not render Section 22A

ineffective. The legal proposition that absence of rules and

regulations cannot negate the power conferred on an

authority by the legislature is settled by decisions of this

Court in Orissa State (Prevention & Control of Pollution)

Board v. Orient Paperdd Mills & Anr. [(2003) 10 SCC 421],

U.P. State Electricity Board, Lucknow v. City Board, Mussorie

& Ors. (supra), Kerala State Electricity Board v. M/ s S.N.

Govinda Prabhu & Bros. & Ors. [(1986) 4 SCC 198], Surinder

1

Singh v. Central Government & Ors. [(1986) 4 SCC 667] and

Mysore Road Transport Corporation v. Gop inath Gund achar

Char (supra).

(v) The arguments advanced by Mr. Nariman on behalf of

the appellant regarding the amendment of Section 22A of

the 1994 Act by the 2008 Act were not raised before the

High Court and the foundation for such a plea has also not

been laid in the special leave petition. In any case the

approval granted by the Central Government to DIAL and

MIAL to levy the development fees for a period of three years

would not be rendered automatically inoperative on the

enactment of the 2008 Act amending Section 22A of the

1994 Act and therefore DIAL and MIAL continue to have the

right to collect the development fees by virtue of the

approvals granted by the Central Government which are

saved by Section 6 (c) of the General Clauses Act, 1897

despite the amendment of Section 22A by the 2008 Act.

The decisions of this Court in Jayantilal Amrathlal v. Union

of India [(1972) 4 SCC 174], S.L. Srinivasa Jute Twine Mills

(P) Ltd. v. Union of India & Anr. [(2006) 2 SCC 740] and M/s.

1 Gurcharan Singh Baldev Singh v. Yashwant Singh & Ors.

[(1992) 1 SCC 428] support this contention.

(vi) Section 2 (n) of the 2008 Act defines "service provider"

as any person who provides aeronautical services "and is

eligible to levy and charge user development fees from the

embarking passengers at any airport and includes the

authority which manages the airport". This provision

expressly indicates that under the 2008 Act also the entity

managing the airport is eligible to levy and collect the

development fees. The 1994 Act and the 2008 Act provide a

statutory framework for the modernization and

improvement of the aviation infrastructure of the country

and should be interpreted in a harmonious manner so that

they complement each other rather than conflict with each

other. The Regulatory Authority constituted under the 2008

Act has already issued a public notice dated 23.04.2010

which would show that it has permitted DIAL to continue to

levy the development fees at the rate of Rs.200/- per

departing domestic passenger and at the rate of Rs.1,300/-

per departing international passenger with effect from

01.03.2009 on an ad hoc basis pending final determination.

1 The Court should not therefore interfere with the levy and

collection of the development fees by DIAL and MIAL at this

stage.

Reply on behalf of MIAL and DIAL:

8. Mr. Harish N. Salve, learned senior counsel, and Dr.

Abhishek Singhvi, learned senior counsel, appeared for

MIAL and DIAL and made these submissions:

(i) The challenge of the appellant to the levy and

collection of airport development fees by the lessees of the

two airports is based on a misconception that development

fees is in the nature of a tax and can be levied strictly in

accordance with Section 22A of the 1994 Act, only by the

Airports Authority and not by the lessee. Development fees

is not really a tax but charges levied and collected by the

lessee for development of facilities for the use of the airport.

The lessees, which are non-government companies, have

established the utility in a public-private partnership, and

do not require a statutory authorization or permission to

recover such charges by way of development fee, from the

passengers using the airport and the lessees do not require

1

the support of the statutory provision of Section 22A for levy

and collection of development fees. Section 11 of the 1994

Act mandates that the Airports Authority would discharge

its functions on business principles and Section 12 of the

1994 Act enumerates the functions of the Airports Authority

and as the Airports Authority in the discharge of its

functions provides different facilities, it is entitled to collect

charges for such facilities as per contractual arrangements

with those who use the facilities. These charges are really

in the nature of consideration from persons using the

facilities provided by the Airports Authority. The nature of

these charges for the facilities provided by an authority has

been clarified by this Court in The Trustees of the Port of

Madras v. M/s Aminchand Pyarelal & Ors. [(1976) 3 SCC

167], Mumbai Agricultural Produce Market Committee & Anr.

v. Hindus tan Lever Limited & Ors.

[(2008) 5 SCC 575], Union

of India v. S. Narayana Iyer [(1970) 1 MLJ 19] and Union of

India & Ors. v. Mot ion Picture Association & Ors.

[(1999) 6

SCC 150]. As the facilities are in the nature of monopolies,

the statute imposes regulations for the charges to prevent

an abuse of monopolistic position and Sections 22 and 22A

1

of the 1994 Act reflect such statutory curtailments of the

rights of the owners of the facilities to recover sums from

airlines and passengers. Hence, the right to recover charges

is not based on Sections 22 and 22A but flows from the

ownership of the facilities. What is determined, therefore, is

the charges that would be contractually recovered from the

users of the facilities as was held in M/s Aminchand

Pyarelal & Ors. (supra).

(ii) Section 22 of the 1994 Act identified the heads on which

charges could be recovered. Section 22A, therefore, merely

adds three more heads for which funds could be raised and

this is akin to adding components of a tariff. Section 22A

does not change the quality and character of the recovery of

charges by the owners of the facilities from the users

thereof. Section 22A does not also change the nature and

character of what is recovered by an airport operator from

its customers. The High Court was, therefore, right in

coming to the conclusion in the impugned judgment that

development fees under Section 22A of the 1994 Act was in

the nature of a tariff.

1 (iii) Section 12A of the 1994 Act (a) recognizes statutorily

the power of the Airports Authority to make a lease of the

premises of an airport for the purpose of carrying out some

of its functions under Section 12 and (b) transfers as it were

to the lessee all the powers of the Authority. As will be clear

from sub-section (4) of Section 12A of the Act, the lessee

who has been assigned some functions of the Airports

Authority under Section 12 of the 1994 Act has the power of

the Airports Authority "necessary for the performance of

such functions". The power to recover charges for the

facilities at the airport in respect of which a lease is made,

whether they be the charges under Section 22 or the

charges under Section 22A are necessary for discharging of

the functions of maintaining and upgrading the airports.

Since sub-section (4) of Section 12A itself states that the

lessee shall have "all" the powers of the Airports Authority,

there is no warrant to take the view that the lessee shall not

have the power of the Airports Authority under Section 22A

to levy and collect development fees.

(iv) The functions which have been entrusted to the two

lessees, DIAL and MIAL, include the up-gradation and

2

modernization of the airport including construction of new

terminals and this will be clear from clause 2.1 titled "Grant

of Function" and clause 8.3 titled "Master plan" of the

OMDA. The relevant provisions of the State Support

Agreement between the Airports Authority and the two

lessees and in particular clauses 3.1 and 3.1A also deal

with the recovery of such charges in the performance of the

functions. It is for the discharge of these functions that

development fees is levied and collected and the power to

collect development fee has been passed on to the lessee

under sub-section (4) of Section 12A of the 1994 Act.

(v) Rules prescribing the rate of development fees and

regulation and the manner in which the development fees

will be utilized as provided in Section 22A of the 1994 Act

cannot curtail the power to levy and collect development

fees under Section 22A of the 1994 Act. This proposition is

settled by the decisions of this Court in Orissa State

(Prevention & Control of Pollution) Board v. Orient Paperdd

Mills & Anr. (supra), T. Cajee v. U. Jormanik Siem & Anr.

(AIR 1961 SC 276), The Madras and Southern Maharatta

Railway Company Limited v. The Municipal Council Bezwada 2

[(1941) 2 MLJ 189] as approved by the Privy Council in its

decision reported in AIR 1944 PC 71, Jantia Hill Truck

Owners Association, etc. v. Shailang Area Coal Dealer and

Truck Owner Association & Ors. [(2009) 8 SCC 492],

Surinder Singh v. Central Government & Ors. (supra),

Meghalaya State Electricity Board & Anr. v. Jagadindra

Arjun [(2001) 6 SCC 446] and U.P. State Electricity Board,

Lucknow v. City Board, Mussorie & Ors. (supra). Since the

power to collect the development fee is already available to

the Airports Authority or its lessees as part of its power to

collect charges for the facilities, absence of a rule does not

negate the power. The rule under Section 22A was to be

made not for purposes of conferring the power but to

regulate the rate of development fees and manner of

utilization of development fee as a check on such power.

(vi) After the 2008 Act and after the notification dated

31.08.2009 bringing the provisions of 2008 Act in Chapters

III and VI into force w.e.f. 01.09.2009, the Regulatory

Authority has jurisdiction under Section 13(1)(b) of the 2008

Act to determine the amount of development fees in respect

of major airports, such as, Delhi and Mumbai Airports. The

2

Regulatory Authority has already commenced its functions

and has undertaken the process of final determination of

development fee. Till the Regulatory Authority modifies the

levy of development fees, the two lessees are entitled to

collect development fees as per the two letters dated

09.02.2009 and 27.02.2009 of the Central Government

conveying the approval to the lessees of the two airports.

The contention of the appellant that the development fees

cannot be recovered till such time as the Regulatory

Authority determines the rate of development fees is

misconceived. The contention of the appellant that the

development fees can be utilized only for the purposes

mentioned in Section 22A of the 1994 Act is also

misconceived. The approval letters of the Central

Government show that the development fees can be utilized

for the development of Aeronautical Assets which are

Transfer Assets in terms of OMDA; and under the OMDA,

these Transfer Assets shall revert to the Airports Authority

on the expiry or early termination of OMDA. On a perusal

of the three clauses enumerated in Section 22A of the 1994

Act, it is clear that depending on the functions assigned to

2

the lessee, the corresponding powers to collect development

fees for discharging the function also is passed on to the

lessee under sub-section (4) of Section 12A of the 1994 Act.

In other words, there is a clear nexus established between

the function so assigned and the power to collect the

development fees.

Rejoinder on behalf of the appellants:

9. In rejoinder, Mr. Nariman made these submissions:

(i) Under Clause 13(i) of OMDA the lessee has undertaken

to arrange for financing and/or meeting of all financial

requirements through suitable debt and equity the

contribution in order to comply with its obligation including

development of the airport pursuant to the Master Plan and

the Major Development Plans. Hence, there was no

question of levy of development fees by the lessee for the

purposes of development of the airport which has been

leased out to the lessee. The airports belong to the Central

Government and the Airports Authority has leased out the

airport premises to the lessee to manage the airport.

Section 38 of the 1994 Act empowers the Central

Government to temporarily divest the Airports Authority of

2

the management of the airport and Section 39 of the 1994

Act empowers the Central Government to supersede the

Airports Authority. The lessee, therefore, is not the owner of

the airport and is consequently not empowered to charge

development fess for the development of the airport. Only a

limited right has been conferred on the private lessee under

Section 12A of the 1994 Act to undertake some of the

functions of the Airports Authority enumerated in Clause

2.1.1 of the OMDA read with Schedule 5 and Schedule 6

which enumerate the aeronautical services and non-

aeronautical services respectively.

(ii) The levy under Section 22A of the 1994 Act is for the

specific purposes mentioned in Clauses (a), (b) or (c) thereof

and though termed as fees, it is really in the nature of a

cess and therefore there need not be any direct co-relation

between the levy of fees and the services rendered as has

been held by the High Court in the impugned judgment. In

Vijayalashmi Rice Mills & Ors. v. Commercial Tax Officers,

Palakot & Ors. [(2006) 6 SCC 763], this Court has also held

that ordinarily a cess means a tax which raises revenue

which is applied to a specific purpose. This Court has held

2

in Commissioner of Income Tax, Udaipur, Rajasthan v.

Mcdowell and Company Ltd. [(2009)10 SCC 755] that the

power to levy tax, duty, cess or fee can be exercised only

under law authorizing the levy. Thus, cess is ultimately a

compulsory exaction of money and must satisfy the test of

Article 265 of the Constitution which declares that no tax

shall be levied or collected without authority of law. This

Court has also held in Ahmedabad Urban Development

Authority v. Sharadkumar Jayantikumar Pasawalla & Ors.

[(1992) 3 SCC 285] that the power of imposition of tax

and/or fee must be very specific and there is no scope of

implied authority for imposition of such tax or fee. This

position of law has been reiterated by this Court in State of

West Bengal v. Kesor am Industries Ltd. & Ors.

[(2004) 10

SCC 201]. Section 22A of the 1994 Act was, therefore,

enacted by the Amendment Act of 2003 to specifically

empower the Development Authority to impose levy and

collect development fees which is to be used for the specific

purposes indicated in clauses (a), (b) and (c) of Section 22A

of the 1994 Act and this power cannot be usurped by the

lessee of the airport by treating it as charges for facilities.

2 (iii) The judgments relied on by the respondents in support

of their contention that non-framing of rules do not negate

the power to levy development fees under Section 22A of the

1994 Act have been rendered by this Court in the context of

enactments which are not pari materia with Section 22A of

the 1994 Act. In Bangalore Water Supply & Sewerage

Bo ard v. A. Rajappa & Ors. [(1978) 2 SCC 213], this Court

has cautioned that the same words may mean one thing in

one context and another in different context. This position

of law has also been stated in Justice G.P. Singh's Treatise

on Interpretation of Statutes, 12th Edition 2010 at pages

298-299. Hence, the judgments cited on behalf of the

respondents are of no aid to interpret Section 22A of the

1994 Act which clearly provides that the development fees

can be levied and collected at the rate prescribed by the

rules and are to be regulated and utilized in the manner

prescribed by the rules. In Mohammad Hussain Gulam

Mohammad & Anr. v. The State of Bombay & Anr. [1962 (2)

SCR 659], a Constitution Bench of this Court has held that

since Section 11 of the Bombay Agricultural Produce

Markets Act, 1939 provides that rules will prescribe the

2

maxima and the fees fixed must be within the maxima, till

such maxima are fixed by the rules, it would not be possible

for the Market Committee to levy fees. Similarly, in

Dhrangadhra Chemical Works Ltd. v. State of Gujarat & Ors.

[(1973) 2 SCC 345], this Court has held that the framing of

rules was a mandatory requirement enjoined by Section

60(a)(ii) of the Bombay Municipalities Act, 1901 before

imposing a tax by a resolution passed at a general meeting.

(iv) The two letters dated 09.02.2009 and 27.02.2009 of

the Government of India, Ministry of Civil Aviation, to DIAL

and MIAL respectively can convey only the approvals of the

Central Government under Section 22A of the 1994 Act for

levy of development fees by DIAL and MIAL respectively but

cannot authorize DIAL and MIAL to levy and collect

development fees under Section 22A of the 1994 Act

because under this provision the Airports Authority only

has the power to levy and collect development fees and DIAL

and MIAL have no such authority. The two letters dated

09.02.2009 and 27.02.2009 are not saved by Section 6 of

the General Clauses Act, 1897 because this provision does

2

not protect any action taken under the authority of the

letter.

(v) The public notice dated 23.04.2010 issued by the

Regulatory Authority pertaining to levy of development fees

by DIAL regarding the fees of Rs.200/- per departing

domestic passenger and Rs.1300/- per departing

international passenger on ad hoc basis is without

jurisdiction as under the 2008 Act, the Regulatory Authority

alone has the power to determine the rate of development

fees in respect of major airports after following the

procedure laid down in Section 13 of the 2008 Act. There is

no public notice issued by the Regulatory Authority so far in

respect of the Mumbai Airport. The levy and collection of

development fees by DIAL and MIAL at the two airports are,

therefore ultra vires and may be restrained by the Court.

Relevant Provisions of Law:

10. Section 12 of the 1994 Act as amended by the

Amendment Act of 2003, Section 22 of the 1994 Act,

Sections 12A and 22A inserted by the Amendment Act of

2003 with effect from 01.07.2004 and Section 22A as

amended by the 2008 Act, which are relevant for deciding

2

the questions raised before us by the parties, are extracted

hereinbelow:-

"12. Functions of the Authority.-- (1)

Subject to the rules, if any, made by the

Central Government in this behalf, it shall be

the function of the Authority to manage the

airports, the civil enclaves and the

aeronautical communication stations

efficiently.

(2) It shall be the duty of the Authority to

provide air traffic service and air transport

service at any airport and civil enclaves.

(3) Without prejudice to the generality of the

provisions contained in sub-sections (1) and

(2), the Authority may--

(a) plan, develop, construct and maintain

runways, taxiways, aprons and terminals and

ancillary buildings at the airports and civil

enclaves;

(aa) establish airports, or assist in the

establishment of private airports by rendering

such technical, financial or other assistance

which the Central Government may consider

necessary for such purpose. (Inserted by the

Amendment Act of 2003)

(b) plan, procure, install and maintain

navigational aids, communication equipment,

beacons and ground aids at the airports and

at such locations as may be considered

necessary for safe navigation and operation of

aircrafts;

3 (c) provide air safety services and search and

rescue, facilities in co-ordination with other

agencies;

(d) establish schools or institutions or centers

for the training of its officers and employees

in regard to any matter connected with the

purposes of this Act;

(e) construct residential buildings for its

employees;

(f) establish and maintain hotels, restaurants

and restrooms at or near the airports;

(g) establish warehouses and cargo complexes

at the airports for the storage or processing of

goods;

(h) arrange for postal, money exchange,

insurance and telephone facilities for the use

of passengers and other persons at the

airports and civil enclaves;

(i) make appropriate arrangements for watch

and ward at the airports and civil enclaves;

(j) regulate and control the plying of vehicles,

and the entry and exit of passengers and

visitors, in the airports and civil enclaves

with due regard to the security and protocol

functions of the Government of India;

(k) develop and provide consultancy,

construction or management services, and

undertake operations in India and abroad in

relation to airports, air-navigation services,

ground aids and safety services or any

facilities thereat;

(l) establish and manage heliports and

airstrips;

3 (m) provide such transport facility as are, in

the opinion of the Authority, necessary to the

passengers traveling by air;

(n) form one or more companies under the

Companies Act, 1956 or under any other law

relating to companies to further the efficient

discharge of the functions imposed on it by

this Act;

(o) take all such steps as may be necessary or

convenient for, or may be incidental to, the

exercise of any power or the discharge of any

function conferred or imposed on it by this

Act;

(p) perform any other function considered

necessary or desirable by the Central

Government for ensuring the safe and

efficient operation of aircraft to, from and

across the air space of India;

(q) establish training institutes and

workshops;

(r) any other activity at the airports and the

civil enclaves in the best commercial interests

of the Authority including cargo handling,

setting up of joint ventures for the discharge

of any function assigned to the Authority.

(4) In the discharge of its functions under

this section, the Authority shall have due

regard to the development of air transport

service and to the efficiency, economy and

safety of such service.

(5) Nothing contained in this section shall be

construed as-

3 (a) authorizing the disregard by the Authority

of any law for the time being in force; or

(b) authorizing any person to institute any

proceeding in respect of duty or liability to

which the Authority or its officers or other

employees would not otherwise be subject.

22. Power of the Authority to charge fees,

rent, etc.- The Authority may,-

(i) With the previous approval of the Central

Government, charge fees or rent -

(a) for the landing, housing or parking of

aircraft or for any other service or facility

offered in connection with aircraft operations

at any airport, heliport or airstrip;

Explanation. - In this sub-clause "aircraft"

does not include an aircraft belonging to any

armed force of the Union and "aircraft

operations" does not include operations of

any aircraft belonging to the said force;

(b) for providing air traffic services, ground

safety services, aeronautical communications

and navigational aids and meteorological

services at any airports and at any

aeronautical communication station;

(c) for the amenities given to the passengers

and visitors at any airport, civil enclave,

heliport or airstrip;

(d) for the use and employment by persons of

facilities and other services provided by the

Authority at any airport, civil enclave heliport

or airstrip;

(ii) with due regard to the instructions that

the Central Government may give to the

3

Authority, from time to time, charge fees or

rent from persons who are given by the

Authority any facility for carrying on any

trade or business at any airport, heliport or

airstrip.

Inserted by the Amendment Act of 2003

12A. Lease by the authority.--(1)

Notwithstanding anything contained in this

Act, the Authority may, in the public interest

or in the interest of better management of

airports, make a lease of the premises of an

airport (including buildings and structures

thereon and appertaining thereto) to carry

out some of its functions under section 12 as

the Authority may deem fit:

Provided that such lease shall not affect the

functions of the Authority under section 12

which relates to air traffic service or watch

and ward at airports and civil enclaves.

(2) No lease under sub-section (1) shall be

made without the previous approval of the

Central Government.

(3) Any money, payable by the lessee in terms

of the lease made under sub- section (1),

shall form part of the fund of the Authority

and shall be credited thereto as if such

money is the receipt of the Authority for all

purposes of section 24.

(4) The lessee, who has been assigned any

function of the Authority under sub-section

(1), shall have all the powers of the Authority

necessary for the performance of such

function in terms of the lease.

3 Inserted by the Amendment Act of 2003

22A. Power of Authority to levy

development fees at airports.-- The

Authority may, after the previous approval of

the Central Government in this behalf, levy

on, and collect from, the embarking

passengers at an airport, the development

fees at the rate as may be prescribed and

such fees shall be credited to the Authority

and shall be regulated and utilized in the

prescribed manner, for the purposes of-

(a) funding or financing the costs of

upgradation, expansion or development of the

airport at which the fees is collected; or

(b) establishment or development of a new

airport in lieu of the airport referred to in

clause (a); or

(c) investment in the equity in respect of

shares to be subscribed by the Authority in

companies engaged in establishing, owning,

developing, operating or maintaining a

private airport in lieu of the airport referred

to in clause (a) or advancement of loans to

such companies or other persons engaged in

such activities.

As amended by the 2008 Act

22A. Power of Authority to levy

development fees at airports.-- The

Authority may,--

(i) after the previous approval of the Central

Government in this behalf, levy on, and

collect from, the embarking passengers at an

airport other than the major airports referred

to in clause (h) of section 2 of the Airports

Economic Regulatory Authority of India Act,

3

2008 the development fees at the rate as may

be prescribed;

(ii) levy on, and collect from, the embarking

passengers at major airports referred to in

clause (h) of section 2 of the Airports

Economic Regulatory Authority of India Act,

2008 the development fees at the rate as may

be determined under clause (b) of sub-section

(1) of Section 13 of the Airports Economic

Regulatory Authority of India Act, 2008,

and such fees shall be credited to the

Authority and shall be regulated and utilized

in the prescribed manner, for the purposes

of--

(a) funding or financing the costs of

upgradation, expansion or development of the

airport at which the fees is collected; or

(b) establishment or development of a new

airport in lieu of the airport referred to in

clause (a); or

(c) investment in the equity in respect of

shares to be subscribed by the Authority in

companies engaged in establishing, owning,

developing, operating or maintaining a

private airport in lieu of the airport referred

to in clause (a) or advancement of loans to

such companies or other persons engaged in

such activities.

Our conclusions with reasons:

11. The conclusion of the High Court in the impugned

judgment that the lessee of the airport has the power of the

Airports Authority under Section 22A to levy and collect

3

development fees from the embarking passengers by virtue

of sub-section (4) of Section 12A of the Act is contrary to the

legislative intent of the Amendment Act of 2003. On a

perusal of Section 22A of the 1994 Act inserted by the

Amendment Act of 2003, we find that the purposes for

which the development fees are to be levied and collected

from the embarking passengers at an airport are:

(a) funding or financing the costs of up-gradation,

expansion or development of the airports at which

the fees is collected, or

(b) establishment or development of a new airport in

lieu of the airport referred to in clause (a), or

(c) investment in the equity in respect of shares to be

subscribed by the Airports Authority in companies

engaged in establishing, owning, developing,

operating or maintaining a private airport in lieu of

the airport referred to in clause (a) or advancement

of loans to such companies or other persons

engaged in such activities.

Though Airports Authority can utilize the fees levied by it,

for all or any of these purposes mentioned in clauses (a), (b)

3

and (c) of Section 22A, what can be assigned by the Airports

Authority to a lessee under a lease entered into under

Section 12A of the 1994 Act is the power to levy fees for the

purposes mentioned in clause (a) of Section 22 A of the

1994 Act.

12. The functions of the Airports Authority under clause

(aa) of sub-section (3) of Section 12 also inserted by the

Amendment Act of 2003 to establish airports, or assist in

the establishment of private airports by rendering such

technical, financial or other assistance which the Central

Government may consider necessary for such purposes

cannot be assigned to the lessee under Section 12A of the

1994 Act. The Amendment Act of 2003 which also inserted

Section 12A therefore provides in sub-section (1) of Section

12A that the Airports Authority can make a lease of the

premises of an airport (including buildings and structures

thereon and appertaining thereto) to carry out "some" of its

functions under section 12 as the Airports Authority may,

in the public interest or in the interest of better

management of airports, deem fit. Obviously, "a lease of

premises of an airport" as contemplated in sub-section (1) of

3

Section 12A cannot include establishing an airport or

assisting in establishment of private airports as

contemplated in clause (aa) of sub-section (3) of Section 12

of the Act.

13. To enable the Airports Authority to perform its

statutory function of establishing a new airport or to assist

in the establishment of private airports, the legislature has

thought it fit to empower the Airports Authority to levy and

collect development fees as will be clear from clauses (b) and

(c) of Section 22A of the 1994 Act. Such development fees

levied and collected under Section 22A can also be utilized

for funding or financing the costs of up-gradation,

expansion and development of an existing airport at which

the fees is collected as provided in clause (a) of Section 22A

of the Act and in case the lease of the premises of an

existing airport (including buildings and structures thereon

and appertaining thereto) has been made to a lessee under

Section 12A of the Act, the Airports Authority may meet the

costs of up-gradation, expansion and development of such

leased out airport to a lessee, but this can be done only if

the rules provide for such payment to the lessee of an

3

airport because Section 22A says that the development fees

are to be regulated and utilized in the manner prescribed by

the Rules. Since the lessee of an airport cannot be assigned

the function of the Airports Authority to establish airports

or assist in establishing private airports in lieu of the

existing airports at which the development fees is being

collected, the lessee cannot under sub-section (4) of Section

12A have the power of the Airports Authority under Section

22A of the 1994 Act to levy and collect development fees.

This is because sub-section (4) of Section 12A provides that

the lessee can have all those powers of the Airports

Authority which are necessary for performance of such

functions as assigned to it under sub-section (1) of Section

12A in terms of the lease. Moreover, since we have held

that the function of establishment and development of a

new airport in lieu of an existing airport and the function of

establishing a private airport are exclusive functions of the

Airports Authority under the 2004 Act, and these statutory

functions cannot be assigned by the Airports Authority

under lease to a lessee under Section 12A of the Act, the

lease agreements, namely, the OMDA and the State Support

4

agreement could not make a provision conferring the right

on the lessee to levy and collect development fees for the

purpose of discharging these statutory functions of the

Airports Authority. We, therefore, do not think it necessary

to refer to the clauses of the OMDA and the State Support

Agreements executed in favour of the two lessees to find out

whether the right of levying and collecting the development

fees has been assigned to the lessees or not.

14. The High Court was not correct in coming to the

conclusion in the impugned judgment that the development

fees to be levied and collected under Section 22A of the

1994 Act is in the nature of tariff or charges collected by the

Airports Authority for the facilities provided to the

passengers and the airlines. It will be clear from a bare

reading of Sections 22 and 22A that there is a distinction

between the charges, fees and rent collected under Section

22 and the development fees levied and collected under

Section 22A of the 1994 Act. The charges, fees and rent

collected by the Airports Authority under Section 22 are for

the services and facilities provided by the Airports Authority

to the airlines, passengers, visitors and traders doing

4

business at the airport. Therefore, when the Airports

Authority makes a lease of the premises of an airport

(including buildings and structures thereon and

appertaining thereto) in favour of a lessee to carry out some

of its functions under Section 12, the lessee, who has been

assigned such functions, will have the powers of the

Airports Authority under Section 22 of the Act to collect

charges, fees or rent from the third parties for the different

facilities and services provided to them in terms of the lease

agreement. The legal basis of such charges, fees or rent

enumerated in Section 22 of the 2008 Act is the contract

between the Airports Authority or the lessee to whom the

airport has been leased out and the third party, such as the

airlines, passengers, visitors and traders doing business at

the airport. But there can be no such contractual

relationship between the passengers embarking at an

airport and the Airports Authority with regard to the up-

gradation, expansion or development of the airport which is

to be funded or financed by development fees as provided in

clause (a) of Section 22A. Those passengers who embark at

the airport after the airport is upgraded, expanded or

4

developed will only avail the facilities and services of the

upgraded, expanded and developed airport. Similarly, there

can be no contractual relationship between the Airports

Authority and passengers embarking at an airport for

establishment of a new airport in lieu of the existing airport

or establishment of a private airport in lieu of the existing

airport as mentioned in Clauses (b) and (c) of Section 22A of

the 1994 Act. In the absence of such contractual

relationship, the liability of the embarking passengers to

pay development fees has to be based on a statutory

provision and for this reason Section 22A has been enacted

empowering the Airports Authority to levy and collect from

the embarking passengers the development fees for the

purposes mentioned in clauses (a), (b) and (c) of Section 22A

of the Act. In other words, the object of Parliament in

inserting Section 22A in the 2004 Act by the Amendment

Act of 2003 is to authorize by law the levy and collection of

development fees from every embarking passenger de hors

the facilities that the embarking passengers get at the

existing airports. The nature of the levy under Section 22A

of the 2004 Act, in our considered opinion, is not charges or

4

any other consideration for services for the facilities

provided by the Airports Authority. This Court has held in

Vijayalashmi Rice Mills & Ors. v. Commercial Tax Officers,

Palakot & Ors. (supra) that a cess is a tax which generates

revenue which is utilized for a specific purpose. The levy

under Section 22A though described as fees is really in the

nature of a cess or a tax for generating revenue for the

specific purposes mentioned in clauses (a), (b) and (c) of

Section 22A.

15. Once we hold that the development fees levied under

Section 22A is really a cess or a tax for a special purpose,

Article 265 of the Constitution which provides that no tax

can be levied or collected except by authority of law gets

attracted and the decisions of this Court starting from The

Trustees of the Port of Madras v. M/s Aminchand Pyarelal &

Ors . (supra), cited on behalf of the Union of India and DIAL

and MIAL on the charges or tariff levied by a service or

facility provided are of no assistance in interpreting Section

22A. It is a settled principle of statutory interpretation that

any compulsory exaction of money by the Government such

as a tax or a cess has to be strictly in accordance with law

4

and for these reasons a taxing statute has to be strictly

construed. As observed by this Court in Ahmedabad Urban

Development Authority v. Sharadkumar Jayantikumar

Pasawalla & Ors. (supra), it has been consistently held by

this Court that whenever there is compulsory exaction of

money, there should be specific provision for the same and

there is no room for intendment and nothing is to be read or

nothing is to be implied and one should look fairly to the

language used. Looking strictly at the plain language of

Section 22A of 1994 Act before its amendment by the 2008

Act, the development fees were to be levied on and collected

from the embarking passengers "at the rate as may be

prescribed". Since the rules have not prescribed the rate at

which the development fees could be levied and collected

from the embarking passengers, levy and collection of

development fees from the embarking passengers was

without the authority of law. For this conclusion, we are

supported by the Constitution Bench judgment of this Court

in Mohammad Hussain Gulam Mohammad & Anr. v. The

State of Bombay & Anr. (supra). In that case, the Court

found that Section 11 of the Bombay Agricultural Produce

4 Markets Act, 1939 provided that the market committee may

levy market fees subject to the maxima as prescribed and

the Court held that unless the State Government fixes the

maxima by rule, it is not open to the committee to fix any

fees at all. We are also supported by the decision of a three

judges Bench of this Court which held in Dhrangadhra

Chemical Works Ltd. v. State of Gujarat & Ors. (supra) that

the mandatory provision in Section 60(a)(ii) of the Bombay

Municipalities Act, 1901 requiring framing of rule for

imposition of tax not having been complied with, the

imposition of tax was illegal. In Principles of Statutory

Interpretation, 12th Edition, at Page 813, Justice G.P. Singh

states:

"There are three components of a taxing statute,

viz., subject of the tax, person liable to pay the

tax and the rate at which the tax is levied. If

there be any real ambiguity in respect of any of

these components which is not removable by

reasonable construction, there would be no tax in

law till the defect is removed by the legislature."

Thus, the rate at which the tax is to be levied is an essential

component of a taxing provision and no tax can be levied

until the rate is fixed in accordance with the taxing

4

provision. We have, therefore, no doubt in our mind that

until the rate of development fees was prescribed by the

Rules, as provided in Section 22A of the 1994 Act,

development fees could not be levied on the embarking

passengers at the two major airports.

16. The High Court, in our considered opinion, was not

correct in coming to the conclusion in the impugned

judgment that the exercise of the power to levy and collect

development fees under Section 22A was not dependent on

the existence of the rules and, therefore, this power could be

exercised even if the rules have not been framed prescribing

the rate of development fees under Section 22A of the 1994

Act. The High Court has relied upon the decision of this

Court in U.P. State Electricity Board, Lucknow v. City Board,

Mussorie & Ors. (supra). In that case, the High Court was

called upon to interpret Section 46(1) of the Electricity

(Supply) Act, 1948, which provided that a tariff to be known

as the Grid Tariff shall, in accordance with any regulations

made in this behalf, be fixed from time to time by the Board.

The High Court held that it only provides that the Grid Tariff

shall be in accordance with any regulations made in this

4

behalf and that means that if there were any regulations,

the Grid Tariff should be fixed in such regulations and

nothing more and, therefore, the framing of regulations

under Section 70(h) of the Act cannot be a condition

precedent for fixing the Grid Tariff. The language of Section

22A of the 1994 Act is different. It clearly states that the

Airports Authority may levy on and collect from the

embarking passengers at the airport the development fees at

the rate as may be prescribed. Hence, unless the rate is

prescribed by the rules, the Airports Authority cannot

collect the development fees.

17. The High Court has also relied on the decision of this

Court in Mysore Road Transport Corporation v. Gopinath

Gundachar Char (supra). In that case, the Court was called

upon to interpret the provisions of the Road Transport

Corporations Act, 1950. Section 45(1) of that Act provided

that a Corporation may, with the previous sanction of the

State Government, make regulations, not inconsistent with

the Act and the rules made thereunder, for the

administration of the affairs of the Corporation and in

particular, providing for the conditions of appointment and

4

service. The Court has held that in the absence of

regulations framed under Section 45 laying down the

conditions of service, the Corporation can still appoint

officers or servants as may be necessary for the efficient

performance of its duties on such terms and conditions as it

thinks fit and it cannot be held that unless such regulations

are framed under Section 45, the Corporation would have

no power to appoint officers and servants and fix the

conditions of service of its officers and servants. From the

language of Section 22A of the 1994 Act, on the other hand,

we find that there is no room whatsoever for the Airports

Authority to levy and collect any development fees except at

the rate prescribed by the Rules.

18. The High Court has also relied on the decision of this

Court in Sudhir Chandra Nawn v. Wealth-Tax Officer,

Calcutta & Ors. (supra). In that case, Section 7(1) of the

Wealth Tax Act, 1957 was challenged as ultra vires the

Parliament on inter alia the ground that no rules were

framed in respect of the valuation of lands and buildings

and this Court repelled the challenge and held that Section

7 only directs that the valuation of any asset other than

4

cash has to be made subject to the rules and does not

contemplate that there shall be rules before an asset can be

valued and failure to make rules for valuation of a type of

asset cannot therefore affect the vires of Section 7. In

Section 22A of the 1994 Act, on the other hand, the levy or

development fees was to be at the rate as prescribed by the

Rules and hence could not be made without the rules. All

other decisions starting from T. Cajee v. U. Jormanik Siem &

Anr. cited on behalf of the Union of India, DIAL and MIAL on

this point are cases where the statutory power could be

exercised without the rules or the regulations, whereas the

power under Section 22A of the 1994 Act to levy

development fees could not be exercised without the rules

prescribing the rate at which development fees was to be

levied.

19. Section 22A of the 1994 Act before its amendment by

the 2008 Act specifically provided that the development fees

may be levied and collected at the rate as may be prescribed

by the rules. Hence, the rate of development fees could not

be determined by the Central Government in the two letters

dated 09.02.2009 and 27.02.2009 communicated to DIAL

5

and MIAL respectively. Under section 22A of the 1994 Act,

the Central Government has only the power to grant its

previous approval to the levy and collection of the

development fees but has no power to fix the rate at which

the development fees is to be levied and collected from the

embarking passengers. Hence, the levy and collection of

development fees by DIAL and MIAL at the rates fixed by the

Central Government in the two letters dated 09.02.2009

and 27.02.2009 are ultra vires the 1994 Act and the two

letters being ultra vires the 1994 Act are not saved by

Section 6 of the General Clauses Act, 1897.

20. After the amendment of Section 22A by the 2008 Act

with effect from 01.01.2009, the rate of development fees to

be levied and collected at the major airports such as Delhi

and Mumbai is to be determined by the Regulatory

Authority under clause (b) of sub-section (1) of Section 13 of

the 2008 Act and not by the Central Government. The

Regulatory Authority constituted under the 2008 Act has

already issued a public notice dated 23.04.2010 permitting

DIAL to continue to levy the development fees at the rate of

Rs.200/- per departing domestic passenger and at the rate

5

of Rs.1,300/- per departing international passenger with

effect from 01.03.2009 on an ad hoc basis pending final

determination under Section 13 of the 2008 Act. This

public notice dated 23.04.2010 has been issued by the

Regulatory Authority under the 2008 Act long after the

impugned decision of the High Court upholding the levy and

it has not been challenged by the appellants. Hence, the

question of examining the validity of the said public notice

dated 23.04.2010 issued by the Regulatory Authority

pertaining to levy and collection of development fees by

DIAL does not arise. But no such public notice has been

issued by the Regulatory Authority under the 2008 Act

pertaining to levy and collection of development fees by

MIAL. Hence, MIAL could not continue to levy and collect

development fees at the major airport at Mumbai and

cannot do so in future until the Regulatory Authority passes

an appropriate order under Section 22A of the 1994 Act as

amended by the 2008 Act.

21. Having held that the levy and collection of

development fees by DIAL and MIAL at the rates fixed by the

Central Government in the two letters dated 09.02.2009

5

and 27.02.2009 are ultra vires the 1994 Act and that MIAL

could not continue to levy and collect of development fees at

the major airport at Mumbai without an appropriate order

passed by the Regulatory Authority, the question is whether

there is need to pass any consequential direction for refund

of the development fees collected by DIAL and MIAL

pursuant to the two letters dated 09.02.2009 and

27.02.2009 of the Central Government and the development

fees levied and collected by MIAL after the amendment of

Section 22A by the 2008 Act.

22. This Court has held in M/s Orissa Cement Ltd. v. State

of Orissa (AIR 1991 SC 1676) that a finding regarding the

invalidity of a levy need not automatically result in a

direction for a refund of all collections thereof made earlier

and that the Court has, and must be held to have, a certain

amount of discretion to grant, mould or restrict the relief in

a manner most appropriate to the situation before it in such

a way as to advance the interests of justice. In the facts of

this case, the development fees have been collected by DIAL

and MIAL on the basis of the two letters dated 09.02.2009

and 27.02.2009 of the Central Government from the

5

embarking passengers at Delhi and Mumbai and these

embarking passengers, from whom the development fees

have been collected, cannot now be identified nor can they

be traced for making the refund to them. Further there is

significantly no prayer for refund in any of the three writ

petitions. However, it is necessary to ensure that the

development fees levied and collected are utilized only for

the specific purposes mentioned in Section 22A of the 1994

Act. In our considered opinion, interests of justice would be

met if DIAL and MIAL are directed to account to the Airport

Authority that the development fees so far levied and

collected by them have been utilized for the purposes

mentioned in clause (a) of Section 22A of the 1994 Act.

5 Reliefs:

23. In view of the foregoing, we allow these appeals as

follows:

(i) We hold that development fees could not be levied and

collected by the lessees of the two major airports,

namely, DIAL and MIAL, on the authority of the two

letters dated 09.02.2009 and 27.02.2009 of the

Central Government from the embarking passengers

under the provisions of Section 22A of the 1994 Act.

(ii) We declare that with effect from 01.01.2009, no

development fee could be levied or collected from the

embarking passengers at major airports under Section

22A of the 1994 Act, unless the Airports Economic

Regulatory Authority determines the rates of such

development fee.

(iii) We direct that MIAL will henceforth not levy and collect

any development fee at the major airport at Mumbai

until an appropriate order is passed by the Airports

Economic Regulatory Authority under Section 22A of

the 1994 Act as amended by the 2008 Act.

5 (iv) We direct that DIAL and MIAL will account to the

Airports Authority the development fees collected

pursuant to the two letters dated 09.02.2009 and

27.02.2009 of the Central Government and the

Airports Authority will ensure that the development

fees levied and collected by DIAL and MIAL have been

utilized for the purposes mentioned in clause (a) of

Section 22A of the 1994 Act.

(v) We further direct that henceforth, any development

fees that may be levied and collected by DIAL and

MIAL under the authority of the orders passed by the

Airports Economic Regulatory Authority under Section

22A of the 1994 Act as amended by the 2008 Act shall

be credited to the Airports Authority and will be

utilized for the purposes mentioned in clauses (a), (b)

or (c) of Section 22A of the 1994 Act in the manner to

be prescribed by the rules which may be made as early

as possible.

(vi) Nothing stated herein shall come in the way of any

aggrieved person challenging the public notice dated

5

23.04.2010 issued by the Airports Economic

Regulatory Authority in accordance with law.

(vii) The impugned judgment of the High Court is set aside

and the Writ Petitions filed by the appellants are

allowed with these directions.

(viii) There shall be no order as to costs.

(ix) I.A. No.3 in Civil Appeal arising out of S.L.P. (C)

No.23541 of 2009 for impleadment stands rejected.

.............................J.

(R. V.

Raveendran)

.............................J.

(A. K. Patnaik)

New Delhi,

April 26, 2011.