Supreme Court Directs TDSAT To Examine Effect Of 'New Evidence' Produced By Delhi/Mumbai International Airports Qua Computation Of HRAB

The Supreme Court directed TDSAT to examine the effect of 'new evidence' produced by Delhi International Airport Limited (DIAL) and Mumbai International Airport Limited (MIAL) qua computation of Hypothetical Regulatory Asset Base (HRAB).

The DIAL and MIAL contended that new evidence shows that the HRAB was incorrectly calculated in the case of Delhi International Airport Limited v Airport Economic Regulatory Authority of India. The DIAL and MIAL sought to present a letter dated May 24, 2011, from the Ministry of Civil Aviation (MoCA) to the Airport Economic Regulatory Authority (AERA).

“We are, thus, inclined to adopt the alternative prayer of the applicants by directing that the effect of this document ought to be examined by the TDSAT. We leave it to the TDSAT to take a view on the same, uninfluenced by the fact that the earlier opinion of the TDSAT has received our imprimatur”, the Bench comprising Justice Sanjay Kishan Kaul and Justice MM Sundresh observed.

Advocate Alok Tripathi appeared for the Applicant and Advocate Shweta Bharti appeared for the Respondent.

DIAL and MIAL approached the Supreme Court by way of a Miscellaneous Application seeking a review of the judgment on the calculation of the Hypothetical Regulatory Asset Base (HRAB). They contended that the decision was based on an incomplete understanding of the facts and that newly discovered evidence shows that the HRAB was calculated incorrectly.

The Applicants' argued that the Court failed to consider a letter dated May 24, 2011, from the Ministry of Civil Aviation (MoCA) to the Airport Economic Regulatory Authority (AERA). This letter, which was not previously disclosed to the Court, stated that the HRAB should be calculated using a "back-solving" method. This method would have resulted in a higher HRAB and lower airport charges.

The Applicants also contended that the Court's decision was inconsistent with the State Support Agreement (SSA), which governs the operation of DIAL and MIAL. The SSA stated that the HRAB should be calculated using the "single till" method, which considers both aeronautical and non-aeronautical revenue. The Applicants argued that the Court's decision effectively eliminates non-aeronautical revenue from the HRAB calculation.

The Apex Court observed that DIAL and MIAL should be allowed to present a letter dated May 24, 2011, from the MoCA to the AERA to the Tribunal for reconsideration of the HRAB calculation. The letter may have an impact on the HRAB calculation and whether the 'single till' mechanism should be the basis of the computation. The Tribunal will take its own independent view on the impact of the letter and whether it warrants a fresh review of the HRAB calculation.

Accordingly, the Court disposed of the Application.

Cause Title: Delhi International Airport Ltd v Airports Economic Regulatory Authority & Ors. (2023 INSC 1046)

Click here to read/download Judgment