Airport Authority Employees Union and Another Vs. Union of India and Others - Court Judgment

(Prayer: This writ petition is filed under Articles 226 and 227 of the Constitution of India praying to quash the impugned gazette notification dated 16.5.2008 which is at annexure-am as arbitrary, illegal, and non-set in law; declare the concession agreement dated 05.07.2004 which is at Annexure-ak and al as illegal, null and void; direct the 3^rd respondent to operate the HAL Airport for Commercial Schedule Airlines operations; declare that transfer of IATA code by the 1^st and 2^nd Respondents as illegal and invalid and consequently restore the IATA code BLR to the Hal Airport and Direct the HAL Airport operations be handled only by the 3^rd Respondent and not handed over to any other third party.

This writ petition is filed under Articles 226 and 227 of the constitution of India praying of set aside the impugned order dated 04.07.2008 passed by the Hon'b;e MRTP commission, New Delhi in RPTE No.27/2008, which is Annexure-A to this petition; Declare the concession agreement dated 5^th July 2004 entered between the Ministry of Civil Aviation and the Bangalore International Airport Limited as Unconstitutional which is Annexure-E to this petition and to reopen HAL Airport for commercial and for civil aviation use.)

1. These are public interest litigations, principally, challenging the decision dated May 16, 2008, of the Ministry of Civil Aviation for closure of Hindustan Aeronautics Limited (HAL) Airport, in view of commissioning of Bengaluru International Airport at Devanahalli, with effect from May 23, 2008, for commercial civil operations.

2. Thus, from May, 23, 2008, commercial civil operations have stopped in HAL Airport except at times of national emergency.

3. These are the writ petitions by the employees of the HAL Airport. However, learned advocate appearing for the petitioners fairly conceded that service of the employees of HAL Airport was not affected by such a decision of closure.

4. During the Second World War, Hindustan Aeronautics Ltd. ( ˜HALfor short), which is today a defence sector undertaking, under the control of Ministry of Defence, was started for manufacture, repair and overhauling of aeroplanes. It set up aerodrome where planes were to be tested.

5. The above aerodrome was subsequently used for civil commercial aircraft operations. HAL Airport is a civilian enclave in a defence Airport and is the only aircraft testing and research facility in the world, which accommodated civilian aircraft movement.

6. In this Airport, over 50 defence aircrafts, helicopters land and take off every day. Testing of aircrafts, which are manufactured/serviced/repaired/overhauled, is to be carried out in this Airport. Test flights of various aircrafts, including Light Combat Aircraft (LAC), are carried out in this aerodrome. Aircraft on test flights often experience flight emergencies requiring priority landing. Mixed traffic of military high speed aircraft and civilian commercial flights, which number nearly 350 are not conducive to flight safety.

7. On January 30, 1009 Chairman of HAL wrote a letter to the Chairman, National Airport Authorities {predecessor of Airport Authorities of India( ˜AAIfor short)} stating that increase in the civil air traffic causes concern of safety and efficient conduct of test flying and that National Airport Authorities should have an alternative Airport in Bangalore to cater to civil airport needs.

8. During 1989-1990 Central Government set up a committee under the Chairmanship of S.Ramanathan, the former Secretary to Government and Chairman of International Airport Authority of India, to examine alternative sites for construction of a modern Airport at Bangalore.

9. In the year 1992, after detailed examination, Ramanathan Committee submitted a report recommending setting up of the Bangalore Airport at Devanahalli.

10. Government started exploring the possibility of setting up of the Airport at Devanahalli. It found the cost to be extremely high and therefore thought of a public private participation model.

11. In the year 1999, Ministry of Civil Aviation framed the Green Field Airport Policy for construction of new airports to replace the existing airports. Clauses 10 to 12 of the above policy permit a special purpose vehicle (SPV) being formed for setting up Green Field Airport, where the private entrepreneur will have 74% per centum shareholding and the State Government and AAI will each hold 13% per centum shares.

12. Learned advocate appearing for the petitioners submits, under the policy decision a Green filed Airport may be established where an existing Airport is unable to meet the projected Airport traffic or a new focal point of traffic emerges with sufficient viability. It was, further, decided that it can be allowed both as a replacement for an existing Airport or for simultaneous operation.

13. On the issue of construction of Airport of international standards at Devanahalli near Bengaluru, the Ministry of Civil Aviation prepared a note dated January 13, 2000, for Cabinet discussion. It proposed that, once the new Airport would become operations, the existing Airport at Bengaluru would be closed for civilian operation. The existing Airport would not be available even for civilian operations of upto 52-seater aircraft inasmuch as it would not be economically justifiable. Most significant note was in paragraph 7 of the said note. The paragraph 7 runs as under:-

7. Institutional framework for setting up of new airport.

7 1. A Memorandum of Understanding has been signed between AAI and Karnataka State Industrial Investment and Development Corporation Limited (KSIIDC) for setting up of a Joint Venture company consisting of AAI, KSIIDC and a strategic partner/main promoter for construction of new Airport at Devanahalli near Bangalore. The project shall be implemented by the Joint venture company (JVC) duly represented on its board by AAI and KSIIDC nominees in proportion to their equity participation. KSIIDC and AAI shall have taken together not less than 26% equity holding in the proposed JVC. The balance 74% equity will be contributed by the selected private Joint Venture partner. The process of selection of strategic partner through global tender is in progress. ?

14. The Ministry of Civil Aviation and Ministry of Defence exchanged their comments.

15. The Cabinet held a meeting on January 19, 2000, and decided to postpone the consideration of the note and, further, directed that the proposal might be, in the first instance, considered by the Task Force on infrastructure set up under the Chairmanship of the Deputy Chairman, Planning Commission of India, and, thereafter, to consider the proposal.

16. The Ministry of Civil Aviation prepared a supplementary note for the Cabinet on January 31, 2000. The Cabinet met on February 1, 2000, and discussed the matter threadbare. The Cabinet approved in principle, the setting up of a new Airport of international standards for Bengaluru, in accordance with the institutional frame-work mentioned in the said paragraph-7 of the main note. In the meeting of the cabinet dated February 1, 2000, the Cabinet considered the note dated January 13 2000 from the Ministry of Civil Aviation and the supplementary note dated January 31, 2000 and approved, in principle, the setting up of a new Airport of international standards for Bengaluru in accordance with the institutional framework mentioned in the said paragraph-7 of the main note.

17. The Cabinet Secretariat submitted a note to the Hon'ble Prime Minister on February 21, 2000. The Hon'ble Prime Minister, on such note, directed that the Task Force might be requested to finalize its recommendations within a week or two. The Task Force on infrastructure, in its meeting dated March 11, 2000, recommended that the Airport at Bengaluru be declared as International Airport with the understanding that this would not involve any substantial investment of public resources. The status of International Airport would be transferred to the new Airport proposed to be developed with private sector participation in case the new Airport enjoyed all the necessary infrastructure facilities required for an International Airport; the existing Airport would be closed for civil operations. The Task Force then submitted their recommendations. The Task Force recommended that the Airport at Bengaluru be declared as an International Airport. The status of international Airport would be transferred to the new Airport proposed to be developed with the private sector participation at Bengaluru. On their commissioning, the Airport at Bengaluru would be closed for civil operations. In the Steering Committee meetings the representatives of AAI participated all through.

18. The Ministry of Civil Aviation brought up a fresh note seeking approval of the Cabinet, inter alia, for closure of the existing Airport at Bengaluru (HAL Airport) for civilian operations on the commissioning of new Airport at Devanahalli.

19. Since the matter was discussed in the Cabinet meeting on February 1, 2000 threadbare and as the note prepared by the Cabinet Secretariat was in conformity with the recommendations of the Task Force on Infrastructure, instead of holding yet another Cabinet meeting on the selfsame issue, proposals were placed before the Hon'ble Prime Minister under Rule 12 of the Transaction of Business Rules.

20. It was proposed by the Cabinet Secretariat on March 15, 2000, that : (a) to declare the existing Airport at Bengaluru (HAL Airport) as International Airport, (b) the said status of International Airport would be transferred/granted to the new Airport proposed to be developed with private sector participation at Bengaluru. With the commissioning of the Greenfield Airport at Bengaluru, the existing HAL Airport would be closed for civilian operations.

21. The Hon'ble Prime Minister approved the proposal on March 18, 2000.

22. It was decided to award the contract for the new Airport to the Bengaluru International Airport Limited ( ˜BIALin short), after holding proper bidding process.

23. In BIAL, the Government of India and the Airport Authority of India are holding 26% equity and the balance 74% equity is held by a consortium of joint ventures. On January 14, 2004, Ministry of Civil Aviation sought for approval for entering into the concession agreement between the Government of India and the said joint venture company.

24. In the 17^th Steering Committee Meeting, in which AAI was participant, the concession agreement was again discussed threadbare. On January 20, 2004, the Union Cabinet approved the concession agreement. The concession agreement was entered into between the Government of India and BIAL on July 5, 2004 Article 5.5 of the agreement provides for closure of HAL Airport for commercial civil aviation operations on the opening of the new Airport at Devanahalli.

25. Some time in 2008, three writ petitions were filed challenging the concession agreement dated July 5, 2004. All the three writ petitions were, however, permitted to be withdrawn without going into the merits of the petitions.

26. On the basis of such Cabinet discussions, the Task Force report and final approval by the Hon'ble Prime Minister, the notification dated May 16, 2008 was issued, which has, since, been impugned in these writ petitions.

27. Writ petition No.6344 of 2009 filed by these petitioners, for almost identical relief, was dismissed with costs on March 19, 2009.

28. Under Section 40 of the Airports Authority of India Act, 1994, the Central Government has been authorized to issue directions and the said authority would, in discharge of its functions and duties, be bound by such directions on questions of policy as the Central Government may give in writing to it from time to time. It is, further, provided under sub-section (2) of Section 40 of the said Act that the decision of the Central Government, whether a question is one of policy or not, shall be final. The only requirement is that the Airport Authority shall, as far as practicable, be given opportunity to express its views before any directions is given.

29. In this case, there is ample material to show that, all through, the Airport Authority was involved in taking the said policy decision.

30. There was yet another petition challenging the order dated July 4, 2008, issued by the Monopolies and Restrictive Trade Practices Commission, New Delhi. The proceeding was initiated for nullifying the said concession agreement as unconstitutional and, consequently, to reopen HAL Airport for commercial and civil aviations. It was contended before the said Tribunal that the said concession agreement was contrary to Sections 31 and 32 of Monopolies and Restrictive Practices Act, 1969. The Commission held that as the Government of India has been a party to the concession agreement, the said agreement could not be stated to be prejudicial to public interest. It was, also, observed that as the complaint was filed after the new Airport was inaugurated, the same was liable to be dismissed on the ground of delay and latches.

31. There is yet another important aspect of the matter. The Chairman of the Hindustan Aeronautics Limited (HAL) addressed a letter dated August 31,1990 to the Chairman, National Airports Authority, highlighting that the HAL Airport has been a defence public sector unit under the control of Ministry of Defence (Department of Defence Production and Supplies). Therefore, the HAL Airport at Bengaluru, did never fall under the category of a domestic civil Airport.

32. Almost at the completion of the argument, a suggestion was mooted that the Ministry of Civil Aviation is still inclined to rum commercial and domestic operations from the HAL Airport. Such contention cannot be accepted inasmuch as our attention is drawn to a letter dated February 4, 2015 by the Hon'ble Minister for Civil Aviation, Government of India, addressed to the Hon'ble Minister of Defence, Government of India, expressing the views of the Ministry of Civil Aviation that HAL Airport cannot be considered for re-opening before twenty fifth anniversary of the Devanahalli Airport at Bengaluru.

33. The decision that with the commissioning of the Green Field Airport at Bangalore, the HAL Airport will be closed for civil and commercial operations has been a policy decision and not that of law.

34. Generally speaking, the courts do not, in exercise of their power of judicial review, interfere in the policy matters of the State, unless the policy so formulated either violates the mandate of the Constitution or any statutory provision or is otherwise actuated by malafides. No such infirmity is present in this case. We cannot strike down a policy decision taken consciously by the Government merely because it is submitted that a more fair or wise policy could have been adopted. In certain matters there can be varied opinions as to the wisdom of the policy, but the Court is not expected to sit as an appellate authority thereon.

35. In view of our discussions herein above, we do not find any merit in all these writ petitions and, therefore, we dismiss all the writ petitions.

36. We, however direct the parties to bear respective costs in these writ petitions.