HC upholds MIAL decision to charge catering services provider

A Division Bench of Justice Ranjana Desai and Justice Mridhula Bhatkar refused to grant interim relief to Taj Sats Air Catering Limited,which had sought a stay on letters and a circular issued by the authority seeking to levy 10 per cent of gross turnover and that all licence and permits given to the petitioner and Sky Gourmet Catering Private Limited would subsist only till November 2009.

MIAL justified its decision stating that the fee is being charged in view of the development work at the airport that involves huge costs.

“Admittedly,Mumbai airport is being upgraded. Undoubtedly,the respondent (MIAL) require money for it,” the bench observed.

Petitioner’s counsel Aspi Chinoy contended that the development fee can be levied and collected from the embarking passengers.

Chinoy argued that they are currently paying Rs 3.6 lakh per year and if the levy is charged the amount will spring up to a whopping Rs 6 crore per year.

Chinoy stated that at best the authority can charge fees from persons who are given any facility for carrying out any trade at the airport.

“Such levy is excessive,arbitrary and unreasonable,” Chinoy said.

However,the MIAL counsel RA Dada pointed out that they are not doing any public duty,especially in view of the government’s policy permitting private sector to participate in commercial activities.

Mankarand Sawant,Deputy General Manager of MIAL,in his affidavit stated that in airports all over India flight catering service providers are required to pay the airport operator a percentage of gross-turnover.

The court felt that there was merit in MIAL’s decision which was not with an intent of sharing profits of the petitioner.

The court also noted that the petitioner is paying turnover fee at the rate of 11 per cent at the Bangalore airport.