# CONSUMER ONLINE FOUNDATION v. UNION OF INDIA & ORS

- **Citation:** [2011] 5 S.C.R. 911
- **Court:** Supreme Court of India
- **Decided:** 2011-04-26
- **Case number:** Civil Appeal No. 3611 of 2011
- **Bench:** R.V. Raveendran, A.K. Patnaik
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/consumer-online-foundation-v-union-of-india-ors-27700
- **Pages:** 47

## Headnote

AIRPORTS AUTHORITY OF /NOIA ACT, 1994:
A
B
s.22A read with ss. 12(3)(aa) and 12A -
Levy of c
development fees at airports - Letters dated 9.2.2009 and
27.2.2009 sent by Government of India approving levy of
development fees by Delhi International Airport (P) Ltd. (DIAL)
and Mumbai International Airport (P) Ltd. (MIAL) from
embarking domestic and international passengers - HELD:
0
Since the lessee of an airport cannot be assigned the
statutory 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-s. (4) of s. 12A have the power of E
the Airports Authority to levy and collect development fees u/
s. 22A of the 1994 Act -
Thus, levy and collection of
development fees by DAIL and MIAL as fixed by Central
Government in the letters dated 9.2.2009 and 27.2.2009 is
ultra virus the 1994 Act and, as such, the said two letters are
not save d by s. 6 of the General Clauses Act, 1897 -
F
Interpretation of Statutes - General Clauses Act, 1897 - s. 6.
s.22-A (as amended by 2003 Act) - Levy of development
fee - Nature of - HELD: Levy of development fee is not
..
charges or any other consideration for services for the G
facilities provided by the Airports Authority - The levy uls 22A though described as fee is really in the nature of cess or a
tax for generating revenue for the specific purposes
mentioned in clauses (a), (b) and (c) of s.22-A - Article 265
911
H
912
SUPREME COURT REPORTS
[2011] 5 S.C.R.
A of the Constitution of India is, therefore, attracted which
provides that no tax can be levied or collected except by the
authority of Jaw - Section 22-A before its amendment by the
Amendment Act, 2008 stipulated that the development fees
were to be levied on and collected from the embarking
B
passengers "at the rate as may be prescribed" - Therefore,
until the rate of development fees was prescribed by the rules,
levy and collection thereof was without the authority of Jaw -
Constitution of India, 1950 - Article 265.
s.22A (as amended by Amendment Act, 2008) and
C
s.13(1) of Airports Econo11Jic Regulatory Authority Act, 2008
- Levy and collection of development fee to be determined
by Regulatory Authority - HELD: After the amendment of s.
22A with effect from 01.01.2009, the rate of development fees
to be levied and collected at the major airports such as Delhi
D and Mumbai is to be determined by the Regulatory Authority
under clause (b} of sub-s. (1) of s. 13 of the 2008 Act and not
by the Central Government - The Regulatory Authority has
already issued a public notice dated 23.04.2010 permitting
DIAL to continue to levy the development fees from
E
embarking domestic and international passengers with effect
from 01.03.2009 on an ad hoc basis pending final
determination uls. 13 of the 2008 Act - But no such public
notice has been issued by the Regulatory Authority pertaining
to levy and collection of development fees by MIAL -
F
Therefore, 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 u/s 22A of the 1994 Act as amended by the
Amendment Act, 2008 - Airports Economic Regulatory
G Authority Act, 2008 - s.13(1).
H
' ---
.
s.22A - Levy and collection of development fee at
airports - Appropriation of - It is directed that DIAL and MIAL
wi/I account to the Airports Authority the development fee
CONSUMER ONLINE FOUNDATION v. UNION OF
913
JNDIA & ORS.
collected pursuant to the letters dated 9.2.2009 and 27.2.2009 A
-Central Government and the Airports Authority will ensure
that the amount so collected has been utilized for the purposes
mentioned in clause (a) of s.22A - It is further directed that
any development fees that may be levied and collected by
DIAL and MIAL under the authority of the orders passed by B
the Airports Economic Regulatory Authority u/s 22A of t

## Text

_Characters 0–39,989 of 91,527. This is a partial read: ask again with offset=39989 for what follows._

[2011] 5 S.C.R. 911
CONSUMER ONLINE FOUNDATION
v.
UNION OF INDIA & ORS.
(Civil Appeal No. 3611 of 2011 etc.)
APRIL 26, 2011
[R.V. RAVEENDRAN AND A.K. PATNAIK, JJ.]
AIRPORTS AUTHORITY OF /NOIA ACT, 1994:
A
B
s.22A read with ss. 12(3)(aa) and 12A -
Levy of c
development fees at airports - Letters dated 9.2.2009 and
27.2.2009 sent by Government of India approving levy of
development fees by Delhi International Airport (P) Ltd. (DIAL)
and Mumbai International Airport (P) Ltd. (MIAL) from
embarking domestic and international passengers - HELD:
0
Since the lessee of an airport cannot be assigned the
statutory 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-s. (4) of s. 12A have the power of E
the Airports Authority to levy and collect development fees u/
s. 22A of the 1994 Act -
Thus, levy and collection of
development fees by DAIL and MIAL as fixed by Central
Government in the letters dated 9.2.2009 and 27.2.2009 is
ultra virus the 1994 Act and, as such, the said two letters are
not save d by s. 6 of the General Clauses Act, 1897 -
F
Interpretation of Statutes - General Clauses Act, 1897 - s. 6.
s.22-A (as amended by 2003 Act) - Levy of development
fee - Nature of - HELD: Levy of development fee is not
..
charges or any other consideration for services for the G
facilities provided by the Airports Authority - The levy uls 22A though described as fee is really in the nature of cess or a
tax for generating revenue for the specific purposes
mentioned in clauses (a), (b) and (c) of s.22-A - Article 265
911
H
912
SUPREME COURT REPORTS
[2011] 5 S.C.R.
A of the Constitution of India is, therefore, attracted which
provides that no tax can be levied or collected except by the
authority of Jaw - Section 22-A before its amendment by the
Amendment Act, 2008 stipulated that the development fees
were to be levied on and collected from the embarking
B
passengers "at the rate as may be prescribed" - Therefore,
until the rate of development fees was prescribed by the rules,
levy and collection thereof was without the authority of Jaw -
Constitution of India, 1950 - Article 265.
s.22A (as amended by Amendment Act, 2008) and
C
s.13(1) of Airports Econo11Jic Regulatory Authority Act, 2008
- Levy and collection of development fee to be determined
by Regulatory Authority - HELD: After the amendment of s.
22A with effect from 01.01.2009, the rate of development fees
to be levied and collected at the major airports such as Delhi
D and Mumbai is to be determined by the Regulatory Authority
under clause (b} of sub-s. (1) of s. 13 of the 2008 Act and not
by the Central Government - The Regulatory Authority has
already issued a public notice dated 23.04.2010 permitting
DIAL to continue to levy the development fees from
E
embarking domestic and international passengers with effect
from 01.03.2009 on an ad hoc basis pending final
determination uls. 13 of the 2008 Act - But no such public
notice has been issued by the Regulatory Authority pertaining
to levy and collection of development fees by MIAL -
F
Therefore, 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 u/s 22A of the 1994 Act as amended by the
Amendment Act, 2008 - Airports Economic Regulatory
G Authority Act, 2008 - s.13(1).
H
' ---
.
s.22A - Levy and collection of development fee at
airports - Appropriation of - It is directed that DIAL and MIAL
wi/I account to the Airports Authority the development fee
CONSUMER ONLINE FOUNDATION v. UNION OF
913
JNDIA & ORS.
collected pursuant to the letters dated 9.2.2009 and 27.2.2009 A
-Central Government and the Airports Authority will ensure
that the amount so collected has been utilized for the purposes
mentioned in clause (a) of s.22A - It is further directed that
any development fees that may be levied and collected by
DIAL and MIAL under the authority of the orders passed by B
the Airports Economic Regulatory Authority u/s 22A of the
1994 Act as amended by the Amendment Act, 2008 shall be
credited to the Airports Authority and will be utilized for the
purposes mentioned in clauses (a), (b) or (c) of s. 22A in the
manner to be prescribed by the rules which may be made as c
early as possible.
Ministry of Civil Aviation, Government of India, sent
a letter dated 9.2.2009, to the Delhi International Airport
(Pvt.) Limited (DIAL), the lessee of the Indira Gandhi
International Airport, New Delhi conveying the approval D
of the Central Government uls. 22A of the Airports
Authority of India Act, 1994 for levy of development fees
by DIAL at the Delhi Airport at the Rate of Rs. 200/- per
embarking domestic passenger and Rs. 1300/- per
embarking International passenger purely on ad-hoc E
basis, for a period of 36 months from 1.3.2009. A similar
letter dated 27.2.2009 was sent to the Mumbai
International Airport (Pvt.) Limited (MIAL) conveying the
approval of the Central Government for levy of
development fees by MIAL at the Mumbai Airport at the F
rate of Rs. 100/- per embarking domestic passenger and
Rs. 600/- per embarking international passenger purely on
ad-hoc basis for a period of 48 months w.e.f. 1.4.2009. Writ
petitions challenging the levy of development fees at the
two Airports were dismissed by the High court. The G
instant appeals were filed challenging the judgment of the
High Court.
Allowing the appeals, the Court
H
914
SUPREME COURT REPORTS
[2011] 5 S.C.R.
A
HELD: 1.1 The conclusion of the High Court that the
lessee of the airport has the power of the Airports
Authority u/s. 22A of the Airports Authority of India Act,
1994 to levy and collect development fees from th·e
embarking passengers by virtue of sub-s. (4) of s. 12A of
B the Act is contrary to the legislative intent of the
Amendment Act of 2003. A perusal of s. 22A of the 1994
Act inserted by the Amendment Act of 2003, indicates that
the purposes for which the development fees are to be·
levied and collected from the embarking passengers at
C an airport 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 airport referred
to in clause (a), or (c) investment in the equity in respect
0
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
E levied by it, for all or any of these purposes mentioned
in clauses (a), (b) and (c) of s. 22A, what can be assigned
by the Airports Authority to a lessee under a lease
entered into u/s. 12A of the 1994 Act is the power to levy
fees for the purposes mentioned in clause (a) of s. 22 A
F of the 1994 Act. [Para 11] [946-C-H; 947-A-B]
1.2 The functions of the Airports Authority under
clause (aa) of sub-s. (3) of s. 12 also inserted by the
Amendment Act of 2003 to establish airports, or assist in
G 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 u/s. 12A of the 1994 Act.
The Amendment Act of 2003 which also inserted s. 12A,
H
CONSUMER ONLINE FOUNDATION v. UNION OF
915
INDIA & ORS.
therefore, provides in sub-s. (1) of s. 12A that the Airports A
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
u/s. 12 as the Airports Authority may, in the public interest
or in the interest of better management of airports, deem B
fit. Obviously, "a lease of premises of an airport" as
contemplated in sub-s. (1) of s.12A cannot inc_lude
establishing an airport or assisting in establishment of
private airports as contemplated in clause (aa) of sub-s.
(3) of s.12 of the Act. [Para 12] [947·C-E]
c
1.3 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 D
clear from clauses (b) and (c) of s. 22A of the 1994 Act.
Such development fees levied and collected u/s. 22A can
also be utilized for funding or financing the costs of upgradation, expansion and development of an existing
airport at which the fees is collected as provided in clause E
(a) of s. 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 u/s. 12A of the Act, the Airports
Authority may meet the costs of up-gradation, expansion
r=
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 airport because s. 22A says
that the development fees are to be regulated and utilized
in the manner prescribed by the Rules. [Para 13] [947-FG
H; 948-A-B]
1.4 Since the lessee of an airport cannot be assign~d
the statutory function of the Airports Authority to establish
airports or assist in establishing private airports in lieu
.
,
.
. .
H
916
SUPREME COURT REPORTS
[2011] 5 S.C.R.
A of the existing airports at which the development fees is
B
· being .collected, the lessee cannot under sub-s. (4) of s.
12A have the power of the Airports Authority to levy and
collect development fees u/s. 22A of the 1994 Act. [Para
13) [948-B-C]
2.1 The High Court was not correct in coming to the
conclusion that the development fees to be levied and
collected u/s. 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
C will be clear from a bare reading of ss. 22 and 22A that
there is a distinction between the charges, fees and rent
collected u/s. 22 and the development fees levied and
collected u/s. 22A of the 1994 Act. The charges, fees and
rent collected by the Airports Authority u/s. 22 are for the
D 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
E appertaining thereto) in favour of a lessee to carry out
some of its functions u/s. 12, the lessee, who has been
assigned such functions, will have the powers of the
Airports Authority u/s. 22 of the Act to collect charges,
fees or rent from the third parties for the different facilities
F
and services provided to them in terms of the lease
agreement. [Para 14) [948-H; 949-A-D]
2.2 The legal basis of such charges, fees or rent
enumerated in s. 22 of the 1994 Act is the contract
G 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
H
..
CONSUMER ONLINE FOUNDATION v. UNION OF
917
INDIA & ORS.
regard to the up-gradation, expansion or development of A
the airport which is to be funded or .financed by
development fees as provided in clause (a) of s. 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 , B
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, i
airport or establishment of a private airport in lieu of the·~ c
existing airport as mentioned in Clauses (b) and (c) ~f s. ·
..
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 s. 22A has been enacted
0
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 s.
22A of the Act. [Para 14] [949-D-H; 950-A-B]
2.3 The object of Parliament in inserting s. 22A in the
E .
1994 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 u/s. 22A is not charges or any other
F
consideration for services for the facilities provided by
the Airports Authority. The levy u/s. 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 s. 22A. [Para 14] G
[950-B-D]
Vijayalashmi Rice Mills & Ors. v. Commercial Tax
Officers, Palakot & Ors. 2006 (4) Suppl. SCR 279 = (2006)
6 sec 763 - relied on.
H
918
SUPREME COURT REPORTS
[2011] 5 S.C.R.
A
The Trustees of the Port of Madras v. Mis Aminchand
Pyarelal & Ors. 1976 (1) SCR 721 = (1976) 3 SCC 167 - held
inapplicable .
. 2.4 Once it is held that the development fees levied
B u/s. 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. It is a settled principle of statutory interpretation
that any compulsory exaction of money by the
C Government such as a tax or a cess has to be strictly in
accordance with law and for these reasons a taxing
statute has to be strictly construed. (Para 15] (950-F-G]
3.1 Looking strictly at the plain language of s. 22A of
1994 Act before its amendment by the Amendment Act,
D 2008, 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
E collection of development fees from the embarking
passengers was without the authority of law. [Para 15]
(951-B-C]
.
Ahmedabad Urban
Development Authority v.
F Sharadkumar Jayantikumar Pasawa/la & Ors. 1992 (3)
SC!i 328 = (1.992) 3 SCC 285; Mohammad Hussain Gu/am
Mohammad & Anr. v. The State of Bombay & Anr. 1962 (2)
SCR 659; and Dhrangadhra Chemical Works Ltd. v. State
of Gujarat & Ors. (1973) 2 sec 345 - relied on
G
Principles of Staturory Interpretation (12th Edn. P.813)
by G.P. Singh - referred to.
3.2 The rate at which the tax is to be levied is an
essential component of a taxing provision and no tax can
H be levied until the rate is fixed in accordance with the
CONSUMER ONLINE.FOUNDATION v. UNION OF
919
INDIA & ORS.
taxing provision. Therefore, until the rate of development A
fees was prescribed by the Rules, as provided in s. 22A
of the 1994 Act, development fees could not be levied on
the embarking passengers at the two major airports.
[Para 15) [951-H; 951-A-B]
3.3 The High Court was not correct in holding that
the exercise of the power to levy and collect development
fees u/s. 22A was not dependent on the existence of the
rules and, therefore, this power could be exercised even
B
if the rules have not been framed prescribing the rate of C
development fees u/s. 22A of the 1994 Act. From the
language of s. 22A, there is no room whatsoever for the
Airports Authority to levy and collect any development
fees except at the rate prescribed by the Rules. Therefore,
the power u/s. 22A of the 1994 Act to levy development
fees could not be exercised without the rules prescribing D
the rate at which development fees was to be levied. [Para
16-18) (952-C; 953-0-H; 954-A]
U. P. State Electricity Board, Lucknow v. City Board,
Mussorie & Ors 1985 (2) SCR 815 = (1985) 2 SCC 16; and E
Mysore Road Transport Corporation v. Gopinath Gundachar
Char 1968 SCR 767 = AIR 1968 SC 464; Sudhir Chandra
Nawn v. Wealth-Tax Officer, Calcutta & Ors.1969 (1) SCR
108; T. Cajee v. U. Jormanik Siem & Anr. 1961 SCR 750 =
Al~ 1961 SC 276; The Madras and Southern Maharatta
F
Railway Company Limited v. The Municipal Council Bezwada
(1941) 2 MLJ 189; Jantia Hill Truck Owners Association, etc.
v. Shailang Area Coal Dealer and Truck Owner Association
& Ors. 2009 (10) SCR 536 = (2009) 8 SCC 492; Meghalaya
State Electricity Board & Anr. v. Jagadindra Arjun 2001 (1) G
Suppl. SCR 233 (2001) 6 SCC 446 - held inapplicable.
Madras and Southern Maharatta Ry. Co. vs. Bezwada
Municipality AIR 1944 Penal Code, 71 - referred to.
3.4 Therefore, the rate of development fees could not H ,
920
SUPREME COURT REPORTS
[2011] 5 S.C.R.
A
be determined by the Central Government in the two
lett~rs dated 09.02.2009 and 27.02.2009 communicated to
DIAL and MIAL respectively. Under s. 22A of the 1994 Act,
the Central Government has only the power to grant its
previous approval to the levy a!ld collection of the
B'
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. Therefore, the levy and
collection of development fees by DIAL and MIAL at the
rates fixed by the Central Government in the two letters
c dated 09.02.2009 and 27.02.2009 is ultra vires the 1994 Act
and the two letters being ultra vires the 1994 Act are not
saved bys. 6 of the General Clauses Act, 1897. [Para 19]
[954-B-D]
4.1 After the amendment of s. 22A by the Amendment
D Act, 2008 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-s. (1)
of s. 13 of the Airports Economic Regulatory Authority
E Act, 2008 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 embarking domestic passenger
F
and at the rate of Rs.1,300/- per embarking international
passenger with effect from 01.03.2009 on an ad hoc basis
pending final determination u/s. 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
G impugned decision of the High Court upholding the levy
and it has not been challenged by the appellants.
Therefore, 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
H development fees by DIAL does not arise. But no such
CONSUMER ONLINE FOUNDATION v. UNION OF
921
INDIA & ORS.
public notice has been issued by the Regulatory A
Authority under the 2008 Act pertaining to levy and
collection of development fees by MIAL. Therefore, 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 B
order u/s. 22A of the 1994 Act as amended by the
Amendment Act, 2008. [Para 20] [954-E-H; 955-A-B]
D .
5.1. In the facts of the case, th·e 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 C
Central Government from the 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 s. 22A of the 1994 Act. Interests of justice
would be met if DIAL and MIAL are directed to account E
to the Airports Authority the development fees so far
levied and collected by them and utilized for the purposes
mentioned in clause (a) of s. 22A of the 1994 Act. [Para
22] [9~5-G-H; 956-A-B]
Mis Orissa Cement Ltd. Vs. State of Orissa AIR 1991 SC
1676 • relied on.
F
5.2 (i) It is, therefore held that development fees could
not be levied and collected by the lessees of the two
major airports, namely, DIAL and MIAL, on the authority G
of the two letters dated 09.02.2009 and 27.02.2009 of the
Central Government from the embarking passengers
under the provisions of s. 22A of the 1994 Act.
(ii) It is declared that with effect from 01.01.2009, no H
922
SUPREME COURT REPORTS
[2011) 5 S.C.R.
A
development fee could be levied or collected from the
embarking passengers at major airports u/s. 22A of the
1994 Act, unless the Airports Economic Regulatory
Authority determines the rates of such development fee.
8
(iii) It is directed that MIAL will 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 u/s. 22A of the 1994 Act as amended
by the Amendment Act, 2008.
C
(iv) It is directed 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
D and collected by .DIAL and MIAL have been utilized for the
purposes mentioned in clause (a) of s. 22A of the 1994
Act.
(v) It is further directed that any development fees
E
that may be levied and collected by DIAL and MIAL under
the authority of the orders passed by the Airports
Economic Regulatory Authority u/s. 22A of the 1994 Act
as amended by the Amendment Act, 2008 shall be
credited to the Airports Authority and will be utilized for
F
the purposes mentioned in clauses (a), (b) or (c) of s. 22A
of the 1994 Act in the manner to be prescribed by the
rules which may be made as early as possible. [Para 23]
[956-C-H; 957-A-D]
Orissa State (Prevention & Control of Pollution) Board v.
G Orient Paperdd Mills & Anr. (2003) 10 SCC 421, Kera/a State
Electricity Board v. Mis S.N. Govinda Prabhu & Bros. & Ors.
(1986) 4 SCC 198, Surinder Singh v. Central Government &
Ors. 1986 (3) SCR 946 = 1986 (1986) 4 SCC 667; Jayantilal
Amrath/al v. Union of India [(1972) 4 SCC 174; S.L. Srinivasa
H Jute Twine Mills (P) Ltd. v. Union of India & Anr. 1991 (2)
CONSUMER ONLINE FOUNDATION v. UNION OF
923
INDIA & ORS.
Suppl. SCR 305 = (2006) 2 SCC 740; Mumbai Agricultural
Produce ·Market Committee & Anr. v. Hindustan Lever
Limited & Ors. 2008 (4) SCR 471; (2008) 5 SCC 575; Union
of India v. S. Narayana Iyer (1970) 1 MLJ 19; and Union of
India & Ors. v. Motion Picture Association & Ors. (1999) 6
SCC 150; Commissioner of Income Tax, Udaipur, Rajasthan
v. Mcdowell and Company Ltd. 2009 (8) SCR 983 = (2009)10
SCC 755; State of West Bengal v. Kesoram Industries Ltd.
& Ors. (2004) 10 SCC 201; and Bangalore Water Supply &
Sewerage Board v. A. Rajappa & Ors. 1979 (3) SCR 545 =
(1978) 2 sec 213 - cited.
Case Law Reference:
1985 (2) SCR 815
held inapplicable para 5
1968 SCR 767
held inapplicable para 5
1969 (1) SCR 108
. held inapplicable para 5
(2003) 10 sec 421
cited
para 7
(1986) 4 sec 198
cited
para 7
1986 (3) SCR 946
cited
para 7
(1972) 4 sec 114
cited
para 7
1991 (2) Suppl. SCR 305 cited
para 7
1976 (1) SCR 721
held inapplicable para 8
1961 SCR 750
held inapplicable para 8
2008 (4) SCR 471
cited
para 8
(1970) 1 MLJ 19
cited
para 8
(1999) s sec 150
cited
para 8
(1941) 2 MLJ 189
held inapplicable para 8
2009 (10) SCR 536
_held inapplicable para 8
A
B
c
-D
E
F
G
H
A
B
c
924
SUPREME COURT REPORTS
[2011] 5 S.C.R.
2001 (1) Suppl. SCR 233 held inapplicable para 8
2006 (4) Suppl. SCR 279 relied on
para 8
2009 (8) SCR 983
cited
para 8
(2004) 1 o sec 201
cited
para 8
1979 (3) SCR 545
cited
para 8
1962 (2) SCR 659
relied on
para 8
(1973) 2 sec 345
relied on
para 8
AIR 1991 SC 1676
relied on
para 22
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
3611 of 2011 etc.
D
From the Judgment & Order dated 26.08.2009 of the High
Court of Delhi at New Delhi in Writ Petition (D) No. 9316 of
2009.
WITH
E
C.A. Nos. 3612, 3613 & 3614 of 2011.
F.S. Nariman, Arunabh Chodhury, Anurag Sharma,
Prashant Kumar, Raktim Gogoi, Anupam Lal Das (for AP & J
Chambers), Meenakshi Arora, Joseph Pookkatt, Sanjib Sen
F
(for AP & J Chambers), Sumita Hazarika, Partha Sil for the
Appellant.
Indira Jaisingh, ASG, Dr. AM. Singvi, Harish N. Salve,
Milanka Chaudhary, Sarojanand Jha, Abhishek Sharma, Rook
Ray, Dharmendra Kumar Sinha, Prateek Jain, Balaji
G Subramanian, Sushma Suri, Atul Nanda, Rameeza Hakeem
(for Law Associates & Co.), Amar Dave, Ashish Jha, Farid
Karachiwala, Meenakshi Chatterjee (for "Coac", Harish Beeran,
R.S. Jena for the Respodents.
H
The Judgment of the Court was delivered by
CONSUMER ONLINE FOUNDATION v. UNION OF
925
INDIA & ORS.
A. K. PATNAIK, J. 1. Application for permission to file
A
SLP in SLP[C] No.1.1799/2011 [CC No.1066/2010] is allowed
and delay condoned.
2. Leave granted.
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 lev.y of
development fees on the embarking passengers by the lessees
B
of the Airports Authority of India at the Indira Gandhi International C
Airport, New Delhi and the Chhatrapati Shivaji International
Airport, Mumbai.
Relevant Facts:
4. The Airports Authority of India Act, 1994 (for short 'the D
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 E
(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
F
inserted Section 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 G
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'}. H
926
SUPREME COURT REPORTS
[2011] 5 S.C.R.
A
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
B
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
c
approval of 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
D
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
M IAL at the Mumbai Airport at the rate of Rs.100/- per departing
E
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.
F
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
Consumer Online Foundation. The Writ petitioners contended
G
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
H
provided in Section 22A of the Act before and after its
I
'~
CONSUMER ONLINE FOUNDATION v. UNION OF
927
INDIA & ORS. [A.K. PATNAIK, J.]
amendment by the 2008 Act, the levy and collection of A
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
B
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 C
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 in Section 12.
The High Court further held that sub-section (4) of Section 12A D
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 E
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
F
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 G
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. State Electricity Board, Lucknow v. City Board,
H
928
SUPREME COURT REPORTS
[2011) 5 S.C.R.
A
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).
8
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:
c
(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
0
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
E
made prescribing the rate at which 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,
F
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
G 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
H Section 13 of the 2008 Act by the Regulatory Authority of India
CONSUMER ONLINE FOUNDATION v. UNION OF
929
INDIA & ORS. [A.K. PATNAIK, J.]
is still pending and the impugned levy of development fees by
A
DIAL and MIAL are, therefore, ultra vires.
{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 ttie 1994 Act and these are:
8
{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
C
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 D
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
E
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
F
and order, that under sub-section (4) of 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 G
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 execut~.d between the
Airports Authority and DIAUM IAL to show that th~ power to levy
H
930
SUPREME COURT REPORTS
[2011) 5 S.C.R.
A development fees from the embarking passengers have in fact
not been assigned by the Airports Authority to DIAUMIAL.
Replv on behalf of the Union of India:
7. Mr. Gopal Subramanium, learned Solicitor General
B 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
c functions under Section 12 of the 1994 Act and in exercise of
this power the Airports Authority and the 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
D and Mumbai Airport respectively. A reading of the lease
agreements (OMDA) would show that the functions of
operation, maintenance, development, design, construction, upgradation; modernization, finance and managemenf of the
airports are to be carried out by the two· lessees. If DIAL, and
E 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
F 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
G airports by the Airports Authority to DIAL and MIAL, the Central
Government has conveyed its approval in the 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
H is entirely in accordance with Section 12A of the 1994 Act. In
CONSUMER ONLINE FOUNDATION v. UNION OF
931
INDIA & ORS. [A.K. PATNAIK, J.]
view of sub-section (4) of Section 12A of the 1994 Act providing
A
that a lessee who has been assigned any of the functions of
the AirportsAuthority 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 td DIAL
B
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 c
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"
D
respectively relate to the very airport in respect of which the
lease is executed and fees are collected, as it ~ould 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
E
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
F
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
G
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.
H
932
SUPREME COURT REPORTS
[2011] 5 S.C.R.
A (supra). Kera/a State Electricity Board v. Mis S.N. Govinda
Prabhu & Bros. & Ors. [(1986) 4 SCC 198], Surinder Singh
v. Central Government & Ors. [(1986) 4 SCC 667] and Mysore
Road Transport Corporation v. Gopinath Gundachar Char
(supra).
B
(v) The arguments advanced by Mr.