DELHI INTERNATIONAL AIRPORT LTD. versus AIRPORT ECONOMIC REGULATORY AUTHORITY OF INDIA & ORS.

Citation: [2022] 11 S.C.R. 869 · Decided: 11-07-2022 · Supreme Court of India · Bench: SANJAY KISHAN KAUL · Disposal: Disposed off

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Judgment (excerpt)

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   [2022] 11 S.C.R. 869
DELHI INTERNATIONAL AIRPORT LTD.
v.
AIRPORT ECONOMIC REGULATORY AUTHORITY OF INDIA
& ORS.
(Civil Appeal No.8378 of 2018)
JULY 11, 2022
[SANJAY KISHAN KAUL AND M.M. SUNDRESH, JJ.]
Airports Economic Regulatory Authority of India Act, 2008 –
ss.2(a) and 13(1)(a) – Privatisation of airports – Contractual and
Regulatory Framework – Tariff and other charges for aeronautical
services rendered at airports – Determination of – Revenue sharing
formula – Judicial Review qua decision of a regulatory body – Scope
– Joint Venture agreement between GMR Consortium and Airports
Authority of India (AAI) for Delhi International Airport Limited
(DIAL), and on similar pattern between GVK Consortium and AAI
for Mumbai International Airport Limited (MIAL) – AAI holding 26
per cent shareholding in each of the JVs – DIAL and MIAL entered
into Operation, Management and Development Agreement
(‘OMDA’) with AAI and executed other project agreements including
State Support Agreement (‘SSA’) – Airport Operator Agreement
signed – DIAL and MIAL handed over management of respective
airports in Delhi and Mumbai – DIAL and MIAL both broadly earn
their revenue from two sources, viz., Aeronautical and Non-
aeronautical – While they are free to fix charges towards the latter,
the former component is controlled by the Airports Economic
Regulatory Authority of India (AERA), which regulates tariff and
other charges for aeronautical services rendered at airports –
Dispute over different aspects of tariff fixation, viz. treatment of
Fuel Throughput Charges (FTC); calculation of Hypothetical
Regulatory Asset Base (HRAB); revenue from Disallowed Area;
calculation of tax for determining Target Revenue; Development
Fee (DF) and levy of User Development Fee (UDF) – Held: It would
not be fair to examine these aspects under the microscope – Different
aspects towards determination of Project Cost were examined by
AERA, and AERA carried out its responsibility while granting a little
leeway for the pioneering effort in an untested field in the country
– It does not really lie with this Court to superimpose a view which
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[2022] 11 S.C.R.
was not found feasible in the given conspectus of the large number
of reports and documents before the AERA as well as the TDSAT –
What is required to be seen by this Court is that the readings are
reasonably supported by evidence as judicial review is really not
concerned with matters of economic policy and the endeavour
certainly cannot be to substitute its view for that of the legislature
or to supplant the view of the expert body – Moreover, in the given
factual scenario there is something more which is required to be
addressed – Before the complete legislative structure was set in place,
operations were proceeded on the understanding of the agreement
between the parties and the legislative intent is also apparent –
This provides for due honour and consideration being given to the
aforesaid intent as per provisions of s.13 of the Act – The objective
is that all parties who have operated in what may be called a
pioneering effort in the field of civil aviation in India should not be
taken by surprise affecting their commercial viability as it would
discourage private participation in such economic activities
perceived to be essential by the Government – Clause (vi) of sub-
section (1) of s.13 of the Act clearly stipulates that in determination
of tariff for aeronautical services, one of the considerations, is
concession offered by Central Government in any agreement or
memorandum of understanding or otherwise – Thus, the principle
that legislative intent must prevail over any prior agreement would
not really apply in the present scenario as the legislative intent itself
incorporates and requires prior agreements to be taken into
consideration albeit along with certain other parameters /
requirements – All aspects in the appeals and cross-appeals, except
one aspect which arose from terminology and its definition, rejected
– Impugned order accordingly modified to that extent – Appeal from
Regulatory Authority.
Contract – Interpretation of – Plain construction – Held: There
is no reason why explicit grammatical connotation should not be
applied to a contract unless it results in some absurdity – On facts,
the contract was negotiated by experts and they were expected to
know all the ramifications of the language they use.
Doctrines / Principles – Princ

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