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Journalism of Courage
The levy and collection of development fees (DF) from airline passengers in Delhi and Mumbai by the private operators of these airports is illegal,the Supreme Court said today.
The court barred the Mumbai airport operator Mumbai International Airport Limited (MIAL) from levying the fee with immediate effect,and until such time as the Airports Economic Regulatory Authority (AERA),Indias national regulator for aeronautical services tariff,prescribes the levy rates.
Delhi International Airport Ltd (DIAL) can,however,continue to levy the fee the regulator had proposed ad hoc rates last year.
Passengers departing from Delhi have been paying Rs 200 for domestic and Rs 1,300 for international travel as DF since March 1,2009. In Mumbai,they have been paying Rs 100 and Rs 600 respectively since April 1,2009. DIAL,promoted by GMR,has collected Rs 1,200 crore in DF so far; the GVK-led MIAL has collected Rs 1,300 crore.
The court asked how DIAL and MIAL had fixed the fee when even the Rules under the Airports Authority of India (AAI) Act,1994,have not yet prescribed the rates. It dismissed the operators contention that the DF had been levied on the basis of two letters issued by the civil aviation ministry in 2009,giving them approval.
The letters,the court said,only app rove,and do not authorise them to levy a DF. Thus,the operators have so far been collecting DF without the authority under law,the Bench comprising Justices RV Raveendran and A K Patnaik held.
Since the Rules have not yet 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. We have therefore no doubt in our minds that until the rate of development fees was prescribed by the Rules,development fees could not levied on the embarking passengers…, Justice Patnaik,who wrote the judgment,observed.
The court,however,decided against a refund of the DF,since passengers cannot be identified or traced for making payments.
According to the Bench,the airports,though operated by private parties,still belong to the Airports Authority of India (AAI). And the fee is in the nature of a cess or tax which cannot be levied by a private party. The fee levied and collected by DIAL and MIAL has to be deposited with AAI,which will also see if the money has been utilised for the specific purposes for which it has been raised,the court said.
We hold that the function of establishment and development of a new airport in lieu of an existing one and the function of establishing a private airport are exclusive functions of the AAI,and these statutory functions cannot be leased out.
When contacted,MIAL said it would discontinue levying the DF with immediate effect. Government sources said AERA is still reviewing the DF at Mumbai. The total project cost has not been finalised yet and AERA is conducting a third-party audit. It is only then that the regulator will take a view on the matter, said the source.
The Supreme Court order came on an appeal by Consumer Online Foundation,an NGO,which contended that the fee was illegal as it was not approved by AERA. Senior advocate Fali Nariman had argued that the fee collected since 2009 should be credited back by DIAL and MIAL.
DIAL and MIAL were allowed by the government to levy and collect a development fee to bridge capital fund deficits in the wake of the financial crunch in 2009.
