* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Decision: 1st June, 2011
+ WRIT PETITION (CIVIL) NO. 3889/2011
RESOURCES OF AVIATION REDRESSAL ASSOCIATION..Petitioner
Through Mr. Sandeep Sethi, Sr. Advocate
with Mr. Vinay Hegde, Mr. Rakesh
Sinha and Mr. Pawan Kumar
Bansal, Advocates.
versus
UOI AND ORS ..... Respondent
Through Ms. Anjana Gosain, Advocate for
R-1.
Mr. Naresh Kaushik, Advocate for
R-2.
Dr. A.M. Singhvi, Sr. Advocate
with Mr. Jayant Bhushan, Sr.
Advocate, Mr. Atul Sharma and
Ms. Milanka Chaudhary,
Advocates for R-3.
Mr. Digvijay Rai, Advocate for
AAI.
WRIT PETITION (CIVIL) NO. 3893/2011
CONSUMER ONLINE FOUNDATION ..... Petitioner
Through Mr. Altaf Ahmad, Sr. Advocate
with Mr. Arunabh Chaudhary, Mr.
Anurag Sharma and Mr. Prashant
Kumar, Advocates.
versus
UOI AND ORS ..... Respondent
Through Ms. Anjana Gosain, Advocate for R-1.
WP(C) Nos.3889 & 3893/2011 Page 1 of 18
Mr. Naresh Kaushik, Advocate for
R-2.
Dr. A.M. Singhvi, Sr. Advocate
with Mr. Jayant Bhushan, Sr.
Advocate, Mr. Atul Sharma and
Ms. Milanka Chaudhary,
Advocates for R-3.
Mr. Digvijay Rai, Advocate for
AAI.
CORAM:
HON’BLE THE CHIEF JUSTICE
HON’BLE MR. JUSTICE SANJIV KHANNA
1. Whether Reporters of local papers may be
allowed to see the judgment? Yes.
2. To be referred to the Reporter or not ? Yes.
3. Whether the judgment should be reported
in the Digest ? Yes.
DIPAK MISRA, CJ.
In these two writ petitions the controversy that emerges for
consideration being similar, they were heard together and disposed of by a
singular order.
2. We may not with profit that W.P.(C) No.3889/2011 has been
preferred by Resources of Aviation Redressal Association and W.P.(C)
No.3893/2011 is at the instance of Consumer Online Foundation. It is apt
to note, both the associations have preferred the writ petitions as pro bono
publico basically praying for issue of a writ of certiorari for quashment of
the public notice dated 23rd April, 2010 issued by the Airports Economic
Regulatory Authority of India (for short, ‗the authority’) under the
WP(C) Nos.3889 & 3893/2011 Page 2 of 18
Airports Economic Regulatory Authority of India Act, 2008 (for brevity,
‗the 2008 Act’) on the foundation that such a determination could not
have been made by the said authority without following the procedure
postulated under Section 13 of the Act and that apart the concept of ad-
hoc determination is not contemplated under the purview of the provisions
of the Act.
3. At this juncture, it is apposite to note that all the respondents have
entered appearance and canvassed their oral submissions as the
controversy basically relates to issue of law. Before we proceed to deal
with the contentions raised, it is seemly to refer to the previous history of
this litigation. Certain public interest writ petition was filed before this
Court forming subject matter of W.P.(C) No. 8918/2009 and other
connected matters challenging the levy imposed by the Central
Government under the Airports Authority of India Act, 1994 (for short,
‗the Act’). The validity of the said notices were challenged on the ground
that such imposition would tantamount to tax and without authority of law
the tax could not be imposed. The Division Bench of this Court expressed
the view that it is not in the nature of tax and, in fact, it is a
tariff-arrangement and, therefore, notices and the consequent imposition
were not ultra vires.
WP(C) Nos.3889 & 3893/2011 Page 3 of 18
4. Being dissatisfied with the order passed by this Court, SLP (Civil)
No.23541/2009 was preferred, which after grant of leave formed the
subject matter of Civil Appeal No.3612/2011. The Apex Court after
noting the submissions of the learned counsel for the parties came to hold
as follows:-
“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
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
WP(C) Nos.3889 & 3893/2011 Page 4 of 18
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 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 any other consideration for services
for the facilities provided by the Airports
WP(C) Nos.3889 & 3893/2011 Page 5 of 18
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.
5. Thus, it is manifest the Apex Court has expressed the view that
once the development fee is received under Section 22A of the 1994 Act,
which has the character of cess or tax, it cannot be levied by the executive
fiat and accordingly came to hold as follows:-
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 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.‖WP(C) Nos.3889 & 3893/2011 Page 6 of 18
6. At this juncture, it is imperative to sit in a time machine and note
that the notice dated 23rd April, 2010 that has been impugned before us
was also brought to the notice of the Apex Court and in that context their
Lordships in paragraph 20 have stated as follows:-
―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 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
WP(C) Nos.3889 & 3893/2011 Page 7 of 18
appropriate order under Section 22A of the 1994 Act
as amended by the 2008 Act.‖
7. It is urged by Mr. Altaf Ahmed and Mr. Sandeep Sethi, learned
senior counsel for the petitioner that the impugned notice is a public
notice and by no stretch of imagination it can be construed as an order by
the authority. Per contra, Dr. Singhvi appearing for DIAL has referred to
paragraph 20 of the order passed by the Apex Court, which we have
reproduced hereinabove, to highlight that it is an order. On a perusal of
the order, penned by their Lordships there can be no scintilla of doubt that
it has been treated as an imposition of tax in an ad-hoc manner. In this
context, it is profitable to reproduce paragraph 6 of the conclusions, which
is as follows:-
―(vi) Nothing stated herein shall come in the way
of any aggrieved person challenging the public notice
dated 23.4.2010 issued by the Airports Economic
Regulatory Authority in accordance with law.‖
8. Thus, leave and liberty was granted to challenge the notice in
accordance with law and no opinion was expressed on such imposition.
9. Questioning the legal propriety of the aforesaid notice, learned
senior counsel appearing for the petitioners in both the writ petitions have
contended as follows:-
WP(C) Nos.3889 & 3893/2011 Page 8 of 18
(i) The passing of an ad-hoc order is not within the purview of the Act,
if the stipulations in Section 13 of the 2008 Act are studiedly scrutinized
inasmuch as where certain guidelines have been incorporated for
determination of the functions of the authority and the primary function is
based on the development fee.
(ii) Assuming for the sake of argument, the regulatory authority has the
jurisdiction/power to impose such a cess or tax on ad-hoc basis, there has
been no application of mind and, in fact, what has been placed reliance
upon in the said notice, are two letters dated 9th February, 2009 and 1st
March, 2009, which have been quashed by the Apex Court.
(iii) Once the infrastructure collapses, the super structure, on which the
edifice is built, is bound to collapse and hence, the order passed by the
regulatory authority has to pave the path of extinction.
(iv) Neither cess or tax cannot be imposed in an ad-hoc manner without
prior determination as it is a levy on a citizen and has to be absolutely
guided by the parameters of imposition of cess or tax.
(v) The public notice, which has the characteristic of an order in a way,
has already expired, if the paragraph 2.3 of the said notice is appropriately
understood.
WP(C) Nos.3889 & 3893/2011 Page 9 of 18
10. Learned senior counsel appearing for the respondent raised the
following contentions:-
(a) The petitioner can prefer an appeal before the appellate authority
constituted under Section 17 of the 2008 Act in view of the broad
language used under Section 18 of the 2008 Act.
(b) Solely because liberty was granted by the Apex Court to challenge
the order it cannot be construed that the leave was granted to file a writ
petition seeking relief in the nature of certiorari or mandamus as their
Lordships have not expressed such an opinion. It is obligatory on the part
of the petitioners to take recourse to the statutory remedy not visit this
Court invoking the extraordinary and inherent jurisdiction of this Court.
(c) The regulatory authority when has been conferred the power for
determination of cess or tax finally, it always can be as an interim
measure on the principle that what can be finally done, can also be done at
an interim stage on the basis of the material available today.
(d) As the Apex Court has already interpreted that by the letter there
has been a permission to DIAL to collect the levy, the same should not be
axed by issue of a writ of certiorari as there is no manifest infirmity.
WP(C) Nos.3889 & 3893/2011 Page 10 of 18
(e). The submission that there has been no application of mind and the
notice issued by the regulatory authority is laconic, is totally sans
substance as the letter clearly reveals that there is application of mind.
11. First we shall address to the issue, whether an appeal would lie to
the Appellate Tribunal. Section 17 of the Act, which occurs in chapter IV
deals with Appellate Tribunal and provides that Central Government by
notification in the Official Gazette can establish an appellate tribunal to be
known as the Airports Economic Regulatory Authority Appellate
Tribunal. The Tribunal has been conferred the jurisdiction to adjudicate
any dispute under sub-section (a) and (b) of section 18 and dispose of an
appeal pertaining to any direction, decision or order of the Authority
under the Act.
12. We will be failing in our duty, if we do not take note of a
submission of Dr. Singhvi that the petitioners are stake holder under
Section 20 of the 2008 Act and, therefore, they can raise dispute under
Section 17 of the Act. Whether they can raise a dispute at this stage or not
need not be adverted to by us. What is required to be determined is
whether under Section 18(2), the petitioners can prefer an appeal. Section
18(2) reads as follows:-
―18(2) The Central Government or a State
Government or a local authority or any person
WP(C) Nos.3889 & 3893/2011 Page 11 of 18
aggrieved by any direction, decision or order made
by the Authority may prefer an appeal to the
Appellate Tribunal.‖ (emphasis supplied.)
13. The said provision has to be read in juxtaposition with sub-section
(a) of sub-section 17(i) and (ii). They read as under:-
―17(a) adjudicate any dispute–
(i) between two or more service providers;
(ii) between a service provider and a group of consumer:
Provided that the Appellate Tribunal may, if considers appropriate,
obtain the opinion of the Authority on any matter relating to such
dispute:
Provided further that nothing in this clause shall apply in respect of
matters-
(i) relating to the monopolistic trade practice, restrictive trade
practice and unfair tradepractice which are subject to the
jurisdiction of the Monopolies and Restrictive Trade Practices
Commission established under sub-section (1) of section 5 of the
Monopolies and Restrictive Trade Practices Act, 1969;
(ii) relating to the complaint of an individual consumer
maintainable before a Consumer Disputes Redressal Forum or a
Consumer Disputes Redressal Commission or the National
Consumer Redressal Commission established under section 9 of the
Consumer Protection Act,1986;
(iii) which are within the purview of the Competition Act, 2002;
(iv) relating to an order of eviction which is appealable under
section 28K of the Airports Authority of India Act, 1994.‖
14. The language employed under Section 18(2) is quite broadly
worded. It includes ―any person‖ ―any direction‖ ―decision or order‖. The
legislature, as we are disposed to think has deliberately made the
provision of appeal quite wide. It worth noting, sometimes the legislature
WP(C) Nos.3889 & 3893/2011 Page 12 of 18
uses the terms ―every order‖. The said terms though may not relate to any
procedural order, but if an order affects a party, he has a right to prefer an
appeal. In this context, we may usefully refer to the decision in The
Central Bank of India Ltd., Vs. Gokal Chand AIR 1967 SC 799. In the
said case, a three Judges Bench of the Apex Court was considering the
words ―every order‖ used in Section 38(1) of Delhi Rent Control Act,
1958. In that context their Lordships have held thus:-
3. The object of Section 38(1) is to give a
right of appeal to a party aggrieved by some order
which affects his right or liability. In the context of
Section 38(1), the words ―every order of the
Controller made under this Act‖, though very wide,
do not include interlocutory orders, which are merely
procedural and do not affect the rights or liabilities of
the parties. In a pending proceeding, the Controller
may pass many interlocutory orders under Sections
36 and 37, such as orders regarding the summoning
of witnesses, discovery, production and inspection of
documents, issue of a commission for examination of
witnesses, inspection of premises, fixing a date of
hearing and the admissibility of a document or the
relevancy of a question. All these interlocutory orders
are steps taken towards the final adjudication and for
assisting the parties in the prosecution of their case in
the pending proceeding; they regulate the procedure
only and do not affect any right or liability of the
parties. The legislature could not have intended that
the parties would be harassed with endless expenses
and delay by appeals from such procedural orders. It
is open to any party to set forth the error, defect or
irregularity, if any, in such an order as a ground of
objection in his appeal from the final order in the
main proceeding. Subject to the aforesaid limitation,
WP(C) Nos.3889 & 3893/2011 Page 13 of 18
an appeal lies to the Rent Control Tribunal from
every order passed by the Controller under the Act.
Even an interlocutory order passed under Section
37(2) is an order passed under the Act and is subject
to appeal under Section 38(1) provided it affects
some right or liability of any party. Thus, an order of
the Rent Controller refusing to set aside an ex parte
order is subject to appeal to the Rent Control
Tribunal.
4. Similar considerations have induced the courts
to give a limited construction on the apparently wide
words of other statutes conferring rights of appeal.
Section 202 of the Indian Companies Act, 1913
confers a right of appeal ―from any order or decision
made or given in the matter of the winding up of a
company by the court.‖ In Shankarlal Aggarwal v.
Shankarlal Poddar this court decided that these
words, though wide, would exclude merely
procedural orders or those which did not affect the
rights or liabilities of parties.
15. In this context we may profitably refer to the decision in the case of
Raj Kumar Shivhare Vs. Assistant Director, Directorate of Enforcement
and Anr (2010) 4 SCC772 while interpreting Section 35 of the FEMA,
the Apex Court has opined thus:-
―18. The argument that under Section 35 only appeals
from final order can be filed has been advanced on a
misconception of the clear provision of the Section
itself. The Section clearly says that from ―any
decision or order‖ of the Appellate Tribunal, appeal
can be filed to the High Court on a question of law.
19. The word ―any‖ in this context would mean ―all‖.
We are of this opinion in view of the fact that thisWP(C) Nos.3889 & 3893/2011 Page 14 of 18
Section confers a right of appeal on any person
aggrieved. A right of appeal, it is well settled, is a
creature of statute. It is never an inherent right, like
that of filing a suit. A right of filing a suit, unless it is
barred by statute, as it is barred here under Section 34
of FEMA, is an inherent right (See Section 9 of the
Civil Procedure Code) but a right of appeal is always
conferred by statute. While conferring such right
Statute may impose restrictions, like limitation or
pre-deposit of penalty or it may limit the area of
appeal to questions of law or sometime to substantial
questions of law. Whenever such limitations are
imposed, they are to be strictly followed. But in a
case where there is no limitation on the nature of
order or decision to be appealed against, as in this
case, the right of appeal cannot be further curtailed
by this Court on the basis of an interpretative
exercise.
20. Under Section 35 of FEMA, the legislature
has conferred a right of appeal to a person aggrieved
from ―any‖ ―order‖ or ―decision‖ of the Appellate
Tribunal. Of course such appeal will have to be on a
question of law. In this context the word ―any’ would
mean ―all‖.‖
16. We have no ounce of doubt that an order or direction issued by the
authority even if it is in the ad-hoc nature, can be challenged before the
tribunal.
17. As an appeal would lie, as advised at present, we are not inclined to
deal with the submissions which have been canvassed by the learned
counsel for the parties and grant liberty to the petitioners to file an appeal
before the appellate tribunal.
WP(C) Nos.3889 & 3893/2011 Page 15 of 18
18. At this stage, learned counsel for the petitioners submitted that if
the Court has thought of relegating the petitioners to prefer an appeal for
the purpose of efficacious adjudication regard being had to the lis in
question, there should be an interim direction for not giving effect to the
order dated 23rd April, 2010. Dr. Singhvi, learned senior counsel
submitted that the balance of convenience and irreparable injury are in
favour of the third respondent inasmuch as the amount that is collected
from the passengers does not go to its coffer, but goes to the Airports
Authority of India, which is spent for development and, hence, it will be
advisable and desirable in law not to pass any kind of interdiction while
asking the petitioners to agitate their grievance before the appellant
forum. It is also contended by him that it is obligatory on the part of DIAL
to collect the same as the Supreme Court has also not interdicted in such
collection. Learned senior counsel has also invited our attention to
paragraph 23(v), which pertains to the future collection to highlight that
there is no justification to pass an interim order.
19. Resisting the aforesaid submissions with regard to injunction
during the interregnum period, Mr. Ahmed and Mr. Sethi, learned senior
counsel appearing for the petitioners submitted that there has been illegal
collection on the basis of the two letters dated 9 th February, 2009 and 27th
WP(C) Nos.3889 & 3893/2011 Page 16 of 18
February, 2009, as the same have quashed by the Apex Court and there
could not have been refunds to the passengers. The directions have been
given to deposit the same before the Airports Authority. It is urged by
them that the passengers have suffered for almost a span of two years with
the levy and, therefore, balance of convenience as well as irreparable
injury would tilt in their favour. Further, the learned senior counsel would
canvass that the ad-hoc determination is bereft of reasons, which is the
heart and soul of any kind of determination and, therefore, the same
should not be given effect to as this will lead to price rise which will be
borne by the consumers.
20. Having heard learned counsel for the parties, we dispose of the writ
petitions by recording the following conclusions and directions:-
(a) The public notice dated 23rd April, 2010 is an ad-hoc
order/direction on cess or tax in view of what has been stated in paragraph
20 of the Apex Court’s decision in Civil Appeal No.3612/2011
(b) The aforesaid order is appealable under Section 18(2) to the
Airports Economic Regulatory Authority Appellate Tribunal.
(c) The petitioners may prefer an appeal within a period of two weeks
from today before the Tribunal which shall hear the appeal on merits and
not throw the same overboard on the ground of limitation. Along with
WP(C) Nos.3889 & 3893/2011 Page 17 of 18
memorandum of appeal, if an application for stay is filed, the same shall
be decided by the Tribunal within a span of two weeks from the date of its
presentation. Till the application for stay is dealt with by the Tribunal, the
public notice 23rd April, 2010 shall not be given effect to.
(d) The present order shall not be construed as this Court has
interdicted in the proceedings of the regulatory authority for final
determination of the cess or tax as per law.
(e) The Tribunal shall decide the appeal within a span of 45 days.
21. Before we part with the case, we may hasten to clarify that we have
not expressed opinion on any of the contentions canvassed by the learned
counsel for the parties and the Tribunal shall independently deal with the
matter.
(DIPAK MISRA)
CHIEF JUSTICE
(SANJIV KHANNA)
JUDGE
JUNE 1, 2011
NA
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