25 Sep 2009

Levy of Airport Development fee justified: Delhi High Court

Turning down the plea made on behalf of the passengers the levy of airport development fee from outgoing passengers travelling from Indira Gandhi International Airport, New Delhi at the rate of Rs.200/- from domestic passengers and Rs.1300/- from international passengers for a period of three years by the Delhi International Airport Pvt. Ltd., the Delhi High Court has allowed DIAL to continue levying the development fee.


Challenging that DIAL could not levy the fee (and only the Airport Authority of India was authorized to do so) and also that no services were being rendered by DIAL towards this additional fee collection, a society in the name of 'Resources of Aviation Redressal Aviation' filed a writ petition in the Delhi High Court. It was argued that the law allowed only the Airport Authority to levy a tax of such nature and DIAL being a private person could not have been empowered to collect such tax. 


The Government argued that permission was given by it to DIAL to collect the fees such that it could garner viable resources for the performance of the requisite functions under the Operation, Management and Development Agreement (OMDA) and that too for a limited period (of 36 months). Further, DIAL was constituted as an instance of public-private partnership initiated ('PPP' as we call it), a joint-venture of which Airport Authority held 26 percent shares and it was in this perspective that the OMDA granted "exclusive right and authority for performing the functions of operating, maintaining, developing, designing, constructing, upgrading, modernizing, financing and managing of the Indira Gandhi International Airport and to perform services and activities constituting the aeronautical services and non-aeronautical services". 


The High Court observed that the airport development fee "though described as fee it is more akin to a charge or a tariff for the facilities provided by the Airports Authority of India". The "consideration from persons who use the facilities would flow from the ownership of the authority of the facilities. Where facilities are established in discharge of a statute, the authority is entitled to charge for such facilities as per contractual arrangements with those who use the facilities."


Brushing aside the argument raised by the Society, the Court held that "A statute, as is well known, must be construed having regard to the legislative intent. The legislative intent in amending the Act was to facilitate the process of improvement of standard of services and facilities at the airports by bringing in infusion of private sector investments as also for restructuring of airports. The Statement of Objects and Reasons specifically says that '…. significant private sector investments in such project require an effective legal framework within which the investors would feel safe and secure about their operational and managerial independence.' If Mr. Bobde’s contention is accepted, it would frustrate the whole governmental policy of promoting private initiative. Such an interpretation which would defeat the very object and purpose of the amendment has to be avoided."


On these facts and the appreciation of law, the petition of the Society was dismissed, allowing DIAL to continue levying the airport development fee and rightly so, for if one wishes to enjoy the facilities of the airport (have a look for yourself the changes made between the earlier terminals and the new terminal at the Delhi airport and perhaps you would agree), then one must also be willing to pay for the same. Have a look at the decision

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