Case Brief: Delhi International Airport Ltd v. International Lease Finance Corpn. And Ors
Civil Appeal No. 2932 of 2015 (Arising out of SLP (Civil) No. 27062/2013)
Citation of Case: AIR 2015 SC 1903, MANU/SC/0282/2015, 2015IV AD (S.C.) 161, 2015 (111) ALR 216, 2015(3) J.L.J.R 100.
DETAILS OF THE CASE:
1. Name of the Court: The Hon’ble Supreme Court of India.
2. Name of the Judges: V.Gopala Gowda and R. Banumathi.
3. Name of the Parties: Appellants – Delhi International Airport Ltd
Respondents – International Lease Finance Corporation and Ors.
BRIEF FACTS OF THE CASE
1. The Appellant is Delhi International Airport Authority Ltd, a joint venture and public partnership between GMR companies, Ministry of Civil Aviation, Fraport Germany and Eraman Malaysia. This authority has been granted aerodrome licence by Director General Civil Aviation (DGCA) on 01.05.2008 and is a competent authority with respect to Delhi Airport, responsible for upgradation, maintenance and operation of Delhi Airport.
2. The Respondent No.1 is International Lease Finance Corporation (ILFC), is a leasing company incorporated under laws of California, U.S.A., engaged in the business of leasing of aircraft engines and related equipments.
3. Kingfisher Airlines (KAL), being the 8th Respondent and it had been operating commercial airlines and unable to pay dues of various authorities. And subsequently the airline licence of the said company was suspended due to non-payment of the parking charges, landing and housing charges in respect of the aircraft bearing registered No. VT- KFT. This was previously registered to KAL and leased to KAL by the International Lease Finance Corporation.
4. There were overall eight aircraft which were detained by the authority. This aircraft which was detained at Delhi Airport subsequently got de-registered on 27.12.2012. The charges which were payable amounted to a total of Rs.10,50,51,052.77/- of all eight detained aircraft and other statutory charges and dues amounted to Rs. 12,64,08,706.57/- for all eight detained aircraft and these aircraft were to be discharged by the person in control of the aircraft. In the meantime, other aircrafts of KAL lying at various airports also got detained due to non-payment of charges and subsequently deregistered.
5. Further ILFC filed writ petition before the Delhi High Court against the order of detention of the aircraft belonging to ILFC and challenging vires Regulation 10 of Airport Authority of India (Management of Airports) Regulations, 2003.
6. During the pendency of the writ petition, on 26.03.2013 a meeting was held regarding release of the aircraft of KAL by the airport operators. The participants in the meeting included representatives of (i) Ministry of Civil Aviation (MCA), (ii) Central Board of Excise & Customs (CBEC), (iii) Director General of Civil Aviation (DGCA), (iv) Airport Authority of India (AAI), (v) Delhi International Airport Pvt. Ltd. (DIAL), (vi) Mumbai International Airport Pvt. Ltd. (MIAL). After a detailed discussion there were few things decided in the meeting which inter alia included that the concerned airport operators shall de-registered aircraft to the respective owners/lessors immediately so that these aircrafts can fly out of the country and they were also allowed to collect parking charges from the owners/lessors from the date of de-registration. Further it was also decided that in case any of these deregistered aircrafts are subject matter of any court case between the owners/lessors and the airport operator, then the airport would take action as per the decision of the Court.
7. High Court of Delhi vide impugned order dated 08.05.2013 directed all the airport to release the aircrafts in terms of the decision taken in the meeting held on 26.03.2013 on payment of parking charges up to 13.05.2013.
8. Being aggrieved, the Appellant-DIAL preferred an appeal before the Hon’ble Supreme Court by way of special leave.
ISSUE INVOLVED IN THE CASE
WHETHER THE MINUTES OF THE MEETING COULD OVERRIDE STATUTORY REGULATIONS?
ARGUMENTS FOR APELLANT:
1. The Appellant contended that the minutes of the meeting were in the nature of an executive decision and it curtails the statutory power of the authority to detain the aircraft for non-payment of fees and said minutes of meeting cannot override Regulation 10 and other statutory Regulations. The Appellant stated that the minutes of the meetings were not a general or a special order passed by the Central Government and does not have a statutory force. The Appellants had relied upon Shanti Sports Club and Anr v. Union of India MANU/SC/1505/2009 and Sant Ram Sharma v. State of Rajasthan and Ors. MANU/SC/0330/1967, where the Appellant submitted that the government cannot amend or supersede statutory rules by administrative instructions and actions and the High Court had erred in directing release of the aircraft in terms of the decision taken in the meeting held on 26.03.2013. The Appellant stated that they are competent authority as they have been granted aerodrome license from DGCA on 01.05.2008 with respect to Delhi Airport. Further they stated that they have the right to levy and ensure collection of dues including the right to detain or stop departure of the aircraft till the fees or charges are paid irrespective of the ownership of the aircraft in view of Section 42(2)(o) read with Section 22 of the Airport Authority of India Act, 1994 (hereinafter referred as AAI) and Regulation 10. The Appellants claimed their right to detain or stop departure of aircrafts till fees or charges pertaining to the landing, housing and parking charges which are determined by AERA (Airport Economic Regulatory Authority) and mere minutes of the meeting cannot override the Regulation 10 which state that, the Airport Authority have the right to detain or stop departure of the aircraft and further the Appellant contended that they can be debarred from their right only by a general or special order in writing the Central Government and in this particular case, the minutes of the meetings cannot be considered as general or special order of the Central Government as per the statute and hence, the minutes cannot override the Regulations.
2. The Appellant further contended that the High Court had mainly relied upon the minutes of the meetings dated 26.03.2013 and it did not consider whether such minutes of the meeting were the decision of the Central Government in accordance with the provisions of Section 40 of the Act and further it did not examined the vires of Regulation 10. Hence, the decision of the High Court is liable to be set aside.
ARGUMENTS FOR RESPONDENTS:
1. Union of India, the Second Respondents in this case, stated that they have the exclusive right to take a decision by virtue of Section 40 of the AAI Act and they submitted that minutes of the meetings was the decision of the Central Government and it was taken in accordance with law.
2. The Respondents further contended that meeting had been convened in the backdrop of Cape Town Convention and Protocol which is precisely called as the Convention on International Interests in Mobile Equipment which provides for the protection of the international interests in the aircrafts as well and India became signatory to this Convention on 31.03.2008. They further contended that in the meeting convened on 26.03.2013, it was decided that in order to honour the international obligations of India and to restore faith of international business community and investors, it was necessary to allow the aircrafts to be returned to the owners-lessors. Union of India relied on the aspect that the minute of the meeting is the decision of the Central Government and the act is in accordance with law and has the force of law.
After considering the rival contentions of Appellant and Respondents and upon the perusal of impugned order and material on record, the Supreme Court pronounced the following judgment:
1. The Court considered the statutory regulations while deciding the case. The Court relied on Section 22(i)(a), Section 42(2)(o) of the AAI Act and the Regulation 10 of the AAI (Management of Airport) Regulations, 2003. Further the Court also considered Article 77 of the Constitution of India and in pursuance of the same analyzed the Government of India (Transaction of Business) Rules, 1961. The important aspect upon which the Court relied was that, no department shall take any decision pertaining to revenue or any other aspect relating to the expenditures without the concurrence of the Ministy of Finance. The Courts relied on Cases like State of Sikkim v Dorjee Tshering Bhutia and Ors MANU/SC/0432/1991 and Gulabrao Keshvarao Patil and Ors v. State of Gujarat and Ors. MANU/SC/1069/196 for clarifying the rules of business of Government.
2. The Court further stated that in term of Rule 3, the alleged decision taken pursuant to meeting dated 26.03.2013 should have been sanctioned by the general or special directions of the Minister in Charge. Further in this case, stake of different department, especially Finance Department, was also not taken into consideration. The Rule 4 provides that the alleged decision should have been taken by the concerned committee of the Cabinet. The Court held that since the decision involved the financial aspects, the concurrence of Finance Department was necessary.
3. Under such circumstances, the Court relied on the ratio laid down in MRF Ltd v. Manohar Parrikar and Or. MANU/SC/0321/2010, where the scope of Article 166(3) was under consideration and the court had observed that the Rules of Business framed under Articles 166(3) and 77(3) are mandatory and necessary to be followed.
4. Further the Court after considering the Rules 3, 4, 4(2) and the above mentioned case, stated that the minutes of meetings which was to be converted as a general or special order in writing by the Central Government involving the abandonment of revenue or which has a financial implication on the Airports Authority of India which is under the control of Civil Aviation Ministry where the decision was required to be processed only after the concurrence of Finance Department. Further it also cannot be considered as general or special order in writing by the Central Government which is specifically required as per Article 77(2) of the Constitution and in absence of such important aspects and non compliance of Article 77, the Court held that mere minutes of the meetings would not give any indefeasible right to the Appellant.
5. The Court finally held that, unless the minutes of meeting resulted in a final decision taken by the competent authority in terms of Article 77(3) of the Constitution and the decision so taken was communicated to the concerned person, the same was not capable of being enforced by issuing a direction in a writ petition. Further, it was held that the High Court had decided the matter without considering the merits of the case and hence the impugned order is liable to be set aside. The Court also held that the Appellant is at liberty to invoke the bank guarantee furnished by the Respondents. And they are also at liberty to recover the arrears of landing, parking or housing fees charges from the concerned Respondents in accordance with law. There was no order as to costs.
Ratio of the Judgment: The minutes of the meeting do not become a general or special order in writing by the Central Government unless the same was sanctified and acted upon by issuing an order in the name of the President in the manner provided u/art.77(2) of the Constitution.
PRESENT STATUS OF THE JUDGMENT
The ratio of the present case is still applicable and this case was referred and relied in many subsequent cases. Following is the brief summary of the cases where this case was referred and cited.
1) In the Supreme Court case, Lalaram and Ors v Jaipur Development Authority and Ors. MANU/SC/1373/2015, which was decided on 01.12.2015. The Court had relied on the present case for affirming the rule mentioned in Article 166 and 77 of Constitution of India.
2) In another Supreme Court case, Swiss Ribbons Pvt. Ltd. And Ors v. Union of India (UOI) and Ors. MANU/SC/0079/2019, AIR 2019 SC 739, which was decided on 25.01. 2019. The case was referred to show that the Rules of business which are established under the statutes are mandatory in nature and have to be followed.
3) In Delhi High Court case, Amway India Enterprise Pvt. Ltd. And Ors. v 1MG Technologies Pvt. Ltd. and Ors. MANU/DE/2149/2019, which was decided on 08.07.2019. Again in this case, the present case was referred to show that the Rules and Guidelines under Article 77 are binding. Further, it was also stated that the approval and concurrence of the concerned ministries is also necessary for taking any decision.
After considering the ratio of the case it can be concluded that, mere administrative action or instrument cannot be the ground for regulating the business of government. All the actions of the government should have a statutory force of law. It is pertinent to note that the commercial relations and transactions of government are to be governed after considering the statutory and constitutional compliances. No decision can be taken without considering the statutory force. Hence, in this case the Supreme Court held that the minutes of meeting cannot override the statutory regulations.
Author Details: Chirag Lalitkumar Dave (DES’s Shri. Navalmal Firodia Law College, Pune)
The views of the author are personal only. (if any)