The Supreme Court in a recent judgment in Airports Economic Regulatory Authority of India v. Delhi International Airport Ltd. & Ors., Civil Appeal Nos. 3098-3099 of 2023, has upheld the maintainability of appeals filed by the Airport Economic Regulatory Authority of India (“AERA”) under Section 31 of the Airport Economic Regulatory Authority of India Act, 2008 (“AERA Act”) against the order passed Telecom Disputes Settlement and Appellate Tribunal (“TDSAT”). The Delhi International Airports Ltd. had challenged the tariff imposed by AERA on Ground Handling Services (“GHS”) and Cargo Handling Services (“CHS”) conducted by an independent contractor. AERA had argued before the TDSAT, that CHS and GHS, when carried out by an independent contractor, are aeronautical services and hence fall within its purview. However, the TDSAT allowed the appeal and held that CHS and GHS would remain non-aeronautical services regardless of whether they are carried out by an independent contractor or not and hence AERA did not have power to impose tariff on the same.

The Hon’ble Supreme Court framed the following questions for its consideration:
1) Whether AERA has a right to contest an appeal against its order determining tariff for aeronautical services before TDSAT and then prefer an appeal against the order of TDSAT under S.31 AERA Act?

2) Even if AERA does not have a right to contest an appeal against its order before TDSAT, does it have a right to prefer an appeal against the order of TDSAT under S.31 AERA Act?
The Supreme Court took note of the judgement in Jogendrasinhji Vijaysinghji v. State of Gujarat¹ to hold that a Tribunal is entitled to defend the order in appeal only if it is provided by law. The Court then analysed the judgement in Competition Commission of India v. Steel Authority of India Ltd.² and came to the conclusion that an authority must be impleaded as a respondent in appeal against its order if it was issued in exercise of its regulatory powers since the authority would have a vital interest in ensuring the protection of public interest. Thereafter, the Court took note of a judgement of the Constitution Bench in PTC India v. Central Electricity Regulatory Commission³ and came to the conclusion that tariff-fixation is generally of a legislative character however, it may be quasi-judicial if it is made so by the statute which confers the Authority with the power to determine tariff.

The Court after analysing the scheme of S.13(1)(a) of the AERA Act came to the conclusion that the AERA performs a regulatory function while determining tariff. The Court finally held that in an appeal against the tariff orders issued by AERA, it is acting as a regulator interested in the outcome of the proceedings. The Court finally held that a judicial or quasi-judicial authority cannot be impleaded in an appeal against its order if the order was issued solely in exercise of its “adjudicatory function,” while the same authority can be impleaded as a respondent in an appeal against its order if it was issued in exercise of its regulatory role since the authority would have a vital interest in ensuring the protection of public interest.

This judgment clarifies the distinction between regulatory and quasi-judicial functions of statutory authorities, extending the ratio in Steel Authority (supra) to other regulatory bodies, enabling them to protect public interest.

By - C. George Thomas & Ansh Mittal