In a recent Supreme Court decision, it seemed to the court that the legal saga involving Delhi International Airport Limited (DIAL) and Mumbai International Airport Limited (MIAL) against the Airport Economic Regulatory Authority of India (AERA) is far from over. Despite a previous judgment in the Delhi International Airport Limited v. Airport Economic Regulatory Authority of India (2022 SCC Online SC 850), new applications have been filed based on what the parties claim to be a 'new and important piece of evidence.'

The crux of the matter revolves around an internal correspondence dated 24.05.2011 between the Ministry of Civil Aviation (MoCA) and AERA. This letter, according to the applicants, reveals an error apparent on the face of the record in certain paragraphs of the previous judgment. Specifically, it touches upon the calculation of the Hypothetical Regulatory Asset Base (HRAB), a crucial element in determining regulatory matters for the airports.

In the initial judgment, the court had considered the challenge in calculating HRAB, given the unique circumstance that the airports in question were not set up de novo but instead took over existing airports. The State Support Agreement (SSA) provided for the HRAB to be derived by working backward, creating a cascading effect for successive years. However, the current dispute centers around whether the 'single till' mechanism, prevalent in the year 2008-09, was appropriately considered in the HRAB calculation.

The applicants argue that the court's previous ruling focused on the expression "pertaining to aeronautical services" and did not delve into the aspect of the 'single till' mechanism. They contend that HRAB should be computed based on the 'single till' mechanism, where there was no distinction between aeronautical and non-aeronautical revenue in 2008-09.

Additionally, the applicants point to a letter from the Airports Authority of India dated 18.06.2018, emphasizing that airport charges were fixed on a cost recovery principle, considering both aeronautical and non-aeronautical revenues. This, they argue, supports their stance that the HRAB should be calculated based on the entire revenue for the relevant period.

The bench of Justice Sanjay Kishan Kaul and M. M. Sundaresh, after hearing the arguments from both sides, decided not to modify the previous judgment but opted for an alternative approach. The court instead directed the matter to be reexamined by the Airport Economic Regulatory Authority (AERA) in light of the new evidence presented by the applicants. Specifically, the court has asked the Tribunal for Dispute Settlement (TDSAT) to independently evaluate the impact of the letter dated 24.05.2011 from MoCA to AERA on the computation of HRAB and whether the 'single till' mechanism should be the basis for such calculations.

While concluding the court refrained from altering its initial judgment, however, the door remains open for further scrutiny and potential adjustments to the regulatory matters concerning Delhi International Airport Limited and Mumbai International Airport Limited. The TDSAT is tasked with taking an independent view on the matter, ensuring a fair and comprehensive examination of the 'new evidence' and its implications on the calculation of HRAB. The outcome of this reexamination will undoubtedly have far-reaching consequences for the parties involved in this complex legal dispute.

Case: DELHI INTERNATIONAL AIRPORT LTD.vs AIRPORTS ECONOMIC REGULATORY AUTHORITY & ORS

Miscellaneous Application No.1721/2023 in C.A. No.8378/2018 with Miscellaneous Application No.1710/2023 in C.A. No.5401/2019.

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