High Court of KeralaSingle JudgeWrit petition disposed with directions to recon...

KERALA STATE INDUSTRIAL ENTERPRISES LTD. (KSIE) v. AIRPORTS AUTHORITY OF INDIA (1st Respondent) and AIRPORT DIRECTOR, TRIVANDRUM INTERNATIONAL AIRPORT (2nd Respondent)

Case / Petition Number:WP(C).No.28805 OF 2019(A)

Case Details & Bench

Court
High Court of Kerala
Hon'ble Judges
  • P. V. ASHA
Judgment Date
2021-03-17
Court Decision / Holding
Writ Petition disposed as follows: the respondents shall reconsider the admissibility of a 50% concession to KSIE for land at Trivandrum Airport, and shall afford KSIE and the State Government an opportunity of hearing within three months from the date of receipt of a copy of the judgment. Until a fresh decision is taken, no coercive action shall be initiated against KSIE. The decision on entitlement to concession shall be taken in a manner consistent with policy guidelines and the government’s stance, with due regard to the status of KSIE as a government agency.
Final Disposition
Writ petition disposed with directions to reconsider concessional relief; hearing to be afforded to KSIE and State Government within three months; no coercive action pending decision.

Parties to the Case

Appellants / Petitioners

  • Kerala State Industrial Enterprises Ltd. (KSIE)

Respondents

  • Airports Authority of India
  • Airport Director, Trivandrum International Airport

Legal Representation & Advocates

Counsels for Petitioners

  • • Sri M. Gopikrishnan Nambiar
  • • Sri K. John Mathai
  • • Sri Joson Manavalan
  • • Sri Kuryan Thomas
  • • Sri Paulose C. Abraham
  • • Sri Jaimohan

Counsels for Respondents

  • • Sri V. Santharam
  • • Sri Lakshmeesh S. Kamath

Case Synopsis & Summary

This writ petition by KSIE, the agency appointed by the Government of Kerala to run the Air Cargo Complex at Thiruvananthapuram, challenges the enhanced license fee and the denial of concessional rates for government agencies. The sequence of events traces back to Ext.P1 (1979) declaring KSIE as the agency for operating Integrated Air Cargo Complexes, with extensions of license across Cochin and Kozhikode. The license agreement (Ext.P2) and subsequent amendments fixed license fees, with escalation mechanics and a periodic revision mechanism. KSIE contends that from 01.10.2014 the base rate was a government policy-based figure, and a 50% concession was available to government agencies, including defence at Trivandrum. Despite Ext.P10’s 2018 directive indicating concessional treatment (50%), the respondents rejected KSIE’s request, citing that concessions were not extended to PSUs and that lease rates were determined through AAI policy in CHQ. KSIE argues that the issue involves public law due to Government policy and KSIE’s statutory/governmental status, and questions the unilateral nature of the 2015 enhancement (Ext.P5). The respondents contend the matter is contractual and policy-driven, not subject to Article 226, and that arbitration provisions govern disputes. The court ultimately disposes the petition with directions for reconsideration of concessional relief, affording hearing to KSIE and the State within three months, and staying coercive action pending decision.

Provisions of Law Cited

Constitution of India, Article 226

Legal Doctrines & Maxims

  • Public policy, public interest, and public good are controlling considerations in exercising writ jurisdiction; government policy decisions may be beyond judicial scrutiny in certain economic policy contexts.
  • Where a contract provides for arbitration, the High Court ordinarily should refrain from entertaining a writ petition under Article 226 and should defer to arbitration.
  • Discretion under Article 226 should consider public policy and public good; money claims arising purely from contract are normally not entertained except in exceptional circumstances.
  • Judicial restraint in economic policy matters; courts do not substitute their assessment for policy decisions of the executive.

Submissions & Arguments

Contentions of Appellants / Petitioners

KSIE contends that the license fee was last revised in 2014-15 and has escalated unrealistically at the instance of Ext.P5. It relies on Ext.P1 declaring KSIE a government agency and argues that 50% concession should apply, since policy guidance (Ext.P1 and Ext.P10) indicates concessional treatment for government entities. The petitioner asserts that the rate revision is not merely contractual; there is a public law dimension, and spontaneity in enhancement without mutual agreement harms KSIE’s functioning as a government agency running public cargo operations. It seeks reinstatement of the concessional rate until a fresh decision is taken following proper hearing, citing need for government support and avoidance of coercive measures pending reconsideration.

Contentions of Respondents

The respondents defend the action as contractual and policy-driven, arguing KSIE is not a statutory government department and that 50% concession is confined to land allotted to government departments and wholly owned central/state entities. They point to CHQ-based decision-making, annual/periodic revisions under Ext.P2 and circulars (Ext.R2 F/G), and that the entitlement to concession is not explicit in the agreement. They argue that Article 226 cannot be used to challenge policy-driven price revisions, and that the remedy, if any, should lie in arbitration or contract-based dispute resolution; they further assert there is no arbitrable dispute in the present petition and maintain that the concessional benefit is not extendable to PSUs.

Cited Precedents (9)

Case NameCitationTreatmentExplanation
Delhi Science Forum v. Union of India(1996) 2 SCC 405Mentioned OnlyCited by respondents to support a stance that government policy decisions are not to be interfered with under Article 226; not directly controlling in the similar factual matrix.
Peerless General Finance and Investment Co. Ltd. v. Reserve Bank of India(1992) 2 SCC 343Mentioned OnlyCited for general principle about policy decisions and public policy; not a binding ruling on the issue between KSIE and AAI.
V. Krishnamoorthi v. AAIW.P.No.19414 of 2008 (Madras HC)PositiveMadras High Court held that an enhancement could be challenged and that writs can lie in certain circumstances; supports petition’s approach to challenge administrative/fee enhancements.
C. P. Mittal v. Union of India & Anr.(Delhi HC, 2007)PositiveDelhi High Court held that writs under Article 226 lie against certain contractual or quasi-public actions; reinforces petition’s argument for judicial review.
Kurien E. Kalathil v. Kerala State Electricity Board(2000) 6 SCC 293DistinguishedApex Court held disputes arising out of contracts must be settled per contract; distinguished by the present case’s public-law-oriented framing and involvement of government agencies.
Diamond & Gem Development Co. v. Rajasthan State Industrial Development & Invest. Corp.(2013) 5 SCC 470PositiveApex Court held contract-based disputes may fall within contractual framework and writs should not enforce contractual obligations; supports the non-interference stance with respect to pure contract disputes.
Joshi Technologies International Inc. v. Union of India & Ors.(2015) 7 SCC 728Mentioned OnlyCited for general framework of when writs should be avoided and arbitration should be pursued; not directly controlling in current facts.
Rajasthan State Industrial Development & Investment Corp. v. Diamond & Gem Development Corp. Ltd.(2013) 5 SCC 470PositiveSupports the principle that court should exercise writ jurisdiction carefully in contractual matters; relied upon to underline arbitration/contractual route.
Gujarat Maritime Board v. Larsen and Toubro Infrastructure Development Projects Limited & Anr.(2016) 10 SCC 46PositiveReiterates the arbitration-first principle; courts should resort to arbitration where provided; cited to support the non-interference stance in contractual matters.

Diagnostic Tool

Beta

Does this judgment govern your specific facts?

Don't risk relying on a distinguishable precedent. Enter your facts or proposition below. We will test it against KERALA STATE INDUSTRIAL ENTERPRISES LTD. (KSIE) v. AIRPORTS AUTHORITY OF INDIA (1st Respondent) and AIRPORT DIRECTOR, TRIVANDRUM INTERNATIONAL AIRPORT (2nd Respondent) and instantly map out authorities that support, challenge, or govern your position.

Extracted Judgment Text

Exact text extracted from official judgment records.

WP(C).No.28805 OF 2019(A) 1 ## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE SMT. JUSTICE P.V.ASHA** **WEDNESDAY, THE 17TH DAY OF MARCH 2021 / 26TH PHALGUNA, 1942** ## **WP(C).No.28805 OF 2019(A)** ## **PETITIONER/S:** **KERALA STATE INDUSTRIAL ENTERPRISES LTD. ST.JOSEPH'S PRESS BUILDING COTTON HILL, THIRUVANANTHAPURAM-695014, KERALA, REPRESENTED BY ITS GENERAL MANAGER, MR.JAYARAJ.P.V.** **BY ADVS. SRI.M.GOPIKRISHNAN NAMBIAR SRI.K.JOHN MATHAI SRI.JOSON MANAVALAN SRI.KURYAN THOMAS SRI.PAULOSE C. ABRAHAM JAIMOHAN** ## **RESPONDENT/S:** - **1 AIRPORTS AUTHORITY OF INDIA, REPRESENTED BY ITS AIRPORT DIRECTOR, TRIVANDRUM INTERNATIONAL AIRPORT, THIRUVANANTHAPURAM-695008, KERALA.** **2 AIRPORT DIRECTOR, AIRPORTS AUTHORITY OF INDIA, TRIVANDRUM INTERNATIONAL AIRPORT, THIRUVANANTHAPURAM-695008, KERALA.** **R1-2 BY ADV. SRI.V.SANTHARAM R1-2 BY ADV. SRI.LAKSHMEESH.S.KAMATH** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 03.03.2021, THE COURT ON 17.03.2021 DELIVERED THE FOLLOWING:** W.P.(C) No.28805 of 2019 **P.V.ASHA, J. --------------------------------W.P.(C) No.28805 of 2019 ---------------------------------Dated this the 17th day of March, 2021.** ## **JUDGMENT** The Kerala State Industrial Enterprises Limited has filed this Writ Petition aggrieved by the enhancement of license fee for the Air Cargo Complex ordered by the respondents. 2. As per Ext.P1 Government Order dated 30.04.1979 Government of Kerala declared that the petitioner would be the agency for running the Air Cargo Complex in the State. The said order was issued in implementation of the policy decision of the Govt. of India to set up “Integrated Air Cargo Complexes” in each State. The Government decided to establish the same at Thiruvananthapuram. It is stated that thereafter the petitioner extended its operation to the Airports at Kochi and Kozhikkode in 1985 and 1998 respectively. Pursuant to Ext.P1 order petitioner and 2[nd] respondent entered into Ext.P2 agreement on 01.10.1997 and license was granted to the petitioner for using the plot of land having an extent of 3505 sq.mtr referred to therein for a period of 5 years from 06.03.1997 to 05.03.2002 for W.P.(C) No.28805 of 2019 the purpose of cargo activities. The license fee payable was fixed as Rs.1,99,785/- in each year which should be paid in advance. The said fee was subject to revision by the authority at an interval of every three years or as approved by the board of International Airports Authority of India from time to time. The license agreement continued to be extended from time to time. As per Ext.P3 agreement, the period of license was extended from 07.10.2010 to 31.03.2012 and the license fee was enhanced to Rs.173.50 sq mtr and thereafter as per Ext.P4 communication dated 01.04.2014 to Rs.243/- per sq.mtr per annum for the period from 01.04.2014.Immediately thereafter the license fee was again enhanced to Rs.1,360/- per sq.mtr per annum as per Ext.P5 letter dt.27.01.2015. It is stated that as per Ext.P6 letter dated 25.03.2019 the Minister for Industries and Information Technology, Govt. of Kerala wrote to the Minister for Civil Aviation, Govt. of India requesting its intervention in the matter and seeking exemption from paying the enhanced license fee for unpaved land occupied by it. But as per Ext.P7 letter dated 19.06.2015 the petitioner was informed by the respondents that they have adopted a transparent process and methodology and revised land license fee base rate based on the current Government ## W.P.(C) No.28805 of 2019 circle rate/ready reckoner rate applicable at various airports. The Government circle rate/ready reckoner rates all over the country have increased manifold due to revaluation/reassessment of land cost by the Government in view of steep hike of rental value in open market and after considering various aspects. It is further stated that the revision of base rate was worked out and decided for implementation after a period of 6 years. It was stated that the revised license fee with effect from 01.10.2014 is uniformly applicable to all concessioners at the airports. Correspondence between the Ministers of the State and Centre continued even thereafter as seen from Ext.P8 letter. As per Ext.P9 letter the petitioner had taken up the matter with the Government requesting for intervention in the matter for waiver of the enhanced license fee. In Ext.P10 letter dated 05.07.2018 the respondents again enhanced the license fee to Rs.1,575/- per sq.mtr. per annum. In this letter it was stated that the normal applicable license fee would be the base for considering any concession to Government agencies or other agencies as per policy of AAI irrespective of the location of allotted site and 50% of the normal rate of license fee/land rent for the years from 2018-19 to 2021-22 are applicable for W.P.(C) No.28805 of 2019 the land allotted to Government agencies including Defence at Trivandrum Airport. Thereupon the petitioner requested for 50% concession applicable to Government agency as per Ext.P11 letter dated 10.08.2018. In Ext.P7 letter the petitioner stated that in the light of Ext.P1 Govt. order it is a Government agency and hence eligible for 50% concession. Petitioner had also taken up the matter with the Govt. as per Ext.P12 letter requesting to take up the matter with the respondents for reduction in license fee pointing out that it is a 100% Govt. agency to look after the cargo operations. But as per Ext.P13 letter dated 26.10.2018 the respondents rejected the request stating that concession is not extended to PSUs of Central Government or State Government. Though the matter was taken up by the Government in Ext.P14 letter stating that petitioner is the Kerala Government Agency running the Air Cargo Operations and requesting to extend 50% reduction in the license fee, as per Ext.P14(a) letter dated 17.01.2019 that request was also rejected stating that the concession is not extended to PSUs of Central Govt. as well as State Govt. and stating that petitioner is a Limited company, an agency appointed by the Govt. of Kerala for running the Air Cargoes which are not eligible for reduction in lease ## W.P.(C) No.28805 of 2019 rentals. It was stated that as per AAI Policy Guidelines AAI allots land to Central Government Departments/State Government(wholly owned by Central/State Government) for performing their mandatory/regulatory functions who are charged 50% of the normal license fee rate. The respondents started issuing demand notices Ext.P15, P16, P16(a) and P17 requesting to clear the arrears. The Writ Petition was filed thereafter at this stage challenging Ext.P5 order dated 27.01.2015, Ext.P13, Ext.P15 and P17 letters and for a direction to the respondents to reinstate the rate of lease rate at Rs.243/- per sq.mtr with periodic escalation at 7.5% and also for a direction to extent the benefit of concessional license fee as available to Govt. agencies to the petitioner. 3. According to the petitioner the license fee was enhanced unilaterally as per Ext.P5 order dated 27.01.2015. It is alleged that the respondents ought to have enhanced the fee only in case it was accepted by the petitioner and unilateral increase of license fee is not contemplated in the agreement executed between the parties. Petitioner also pointed out that the charges at various airports for cargo handling are different and the revenue handled by the airports are not comparable. It is also alleged that the ## W.P.(C) No.28805 of 2019 denial of 50% concession to the petitioner is arbitrary and petitioner is entitled to the concession as it is a Government agency. 4. The respondents have filed a counter affidavit. They have raised a preliminary objection as to the maintainability of the Writ Petition stating that it is highly belated. It is stated that Ext.P5 enhancement was made as early as in January 2015 and the same was given effect from 01.10.2014. Their further contention is that the challenge in the Writ Petition is against contractual obligations and there is no statutory contract between the petitioner and the respondents. It is pointed out that as far as there is no allegation as to the violation of statutory provisions the remedy under Article 226 would not be available to the petitioner, even if there is any violation of any contractual terms. It is further stated that the license agreement itself, the full text of which is produced as per Ext.R2(a) provides for a mechanism when there is breach of any contractual obligations. It is stated that the allotment letter and license agreement provide for the license fee payable and also that the same would be subject to revision by the authority at an interval of every three years or at such intervals as may be approved by the ## W.P.(C) No.28805 of 2019 Board of AAI from time to time. It is stated that the licensee agreed to pay revised license fee without any protest on the basis of the agreements executed and extended. It is stated that the area given in license is having an extent of 3185 sq.mtr as found in the joint measurement. It is stated that the license fee for the year 2010-11 to 2013-14 was Rs.180, Rs.195, Rs.210 and Rs.226 per sq.mtr per annum. It was enhanced to Rs.243/- per sq.mtr per annum from 01.04.2014 to 30.09.2014 in 2014-15. It was revised to Rs.1,360 per sq.mtr per annum w.e.f. 01.10.2014 to 31.03.2015. It is stated that the petitioner has not been paying the land rent as per the revised rates of license fee w.e.f. 01.10.2014, revised as per Ext.R2(f) circular dated 20.10.2014 and R2(g) circular dt.04.12.2017. It is stated that the present rate of license fee for unpaved land allotted to the petitioner was Rs.1,575/- from 01.04.2017 onwards and it is frozen for the next 5 years from 01.04.2017 to 31.03.2022. It is stated that the rates are fixed by the CHQ of AAI after consideration of various aspects and it cannot be fixed on mutual agreements between the parties. The Chairman of AAI had already informed the Government Secretary that the revision of license fee was in order. The AAI had adopted transparent process and ## W.P.(C) No.28805 of 2019 methodology on the basis of the current Government circle rate/ready reckonable rates applicable at various airports. The rates had increased manifold due to revaluable/reassessment of land cost by the Government in view of steep hike in rental value in open market and after considering factors like inflation, devaluation of currency, more demand of land due to commercialization, expansion of cities etc which necessitated revision in base rate and the rate was worked out and decided for implementation after a period of six years and said rate is uniformly applicable to all. 5. It is stated that the petitioner has to pay licence fee at normal rates plus service tax as applicable at Trivandrum Airport. The licence fees raised are subject to revision and yearly escalation as decided by the Airport Authority of India from time to time. According to the respondents, it is not necessary to obtain the acceptance of licencee for implementation of revision of licence fee as it is covered by the allotment letters as well as the agreement between the two parties. It is stated that all other PSUs across the country are paying the licence fee at the revised rates implemented w.e.f 01.10.2014 in Ext.R2(f) and as revised subsequently as per Ext.R2(g) w.e.f W.P.(C) No.28805 of 2019 01.04.2017. The land allotted to the Central Govt./State Govt. alone would be granted 50% concession and the same is not extended to PSUs. 6. Heard the learned counsel on either side. 7. The learned counsel for the petitioner argued that even in contractual matters if the respondents are acting arbitrarily, this Court under Article 226 can interfere relying on the judgment dt.20.12.2019 in W.P. (c).No.19414/2008 and the judgment of the Delhi High Court reported in _**C.P.Mittal v. Union of India & Anr.**_ [2007 SCC OnLine Del 1185]. The learned counsel for the petitioner argued that there is no automatic ban against entertaining Writ Petitions under Article 226 of the Constitution of India in case substantial elements of public law are available. 8. The learned counsel for the respondents, relying on the judgments of the Apex Court in _**Delhi Science Forum v. Union of India**_ [(1996) 2 SCC 405], _**Peerless General Finance and Investment Co. Limited v. Reserve Bank of India**_ [(1992) 2 SCC 343], _**Kerala State Electricity Board v. Kurien E. Kalathil**_ [(2000) 6 SCC 293], _**Pimpri Chinchwad Municipal Corpn. v. Gayatri Construction Co.**_ [(2008) 8 SCC 172], _**Joshi Technologies International Inc. v. Union of India &**_ W.P.(C) No.28805 of 2019 _**Ors.**_ [(2015) 7 SCC 728], _**Rajasthan State Industrial Development & Investment Corpn. v. Diamond & Gem Development Corpn. Ltd.**_ [(2013) 5 SCC 470] and _**Gujarat**_ _**Maritime Board v. Larsen and Toubro Infrastructure Development Projects Limited & Anr.**_ [(2016) 10 SCC 46] argued that policy decisions of the Government including economic policy are not liable to be interfered with under Article 226 of the Constitution of India as also the dispute relating to the terms of the contract with statutory body are not liable to be interfered with. 9. One of the contentions raised by the respondent is that there is huge delay on the part of the respondents in challenging the orders against the petitioner, pointing out the date on which Ext.P5 was issued. It is relevant to note that immediately after the escalation as per Ext.P5 order, there had been correspondence between the Ministers of the State and Centre; petitioner and respondents; State and Centre; State and respondents. Petitioner is an agency under the State Government and 1[st] respondent is an agency under the Central Government. The delay occurred in filing the writ petition by and between such parties cannot therefore non-suit the petitioner when it is seen that there was an attempt going on for an amicable solution. W.P.(C) No.28805 of 2019 Therefore, I find that the objection raised by the respondents with respect to delay is unsustainable. 10. The next contention of the respondents is on judicial review in matters of contract. It is true that Clause 3 of Ext.P2 provides for revision of licence fee at an interval of 3 years or at such intervals as may be approved by the Board of International Airports Authority of India from time to time. It also provides for payment of such license fee by the licensee without protest. According to the respondents, when there is any such dispute, the petitioner has to resort to arbitration, as provided in Clause 35 of Ext.P2 agreement. But according to the petitioner when the escalation by way of revision is by 500%, the same amounts to arbitrariness and in such circumstances this court can interfere even in contractual matters. In this context it is necessary to have a look at the judgments relied on by the learned Counsel for the petitioner. In the judgment of the Madras High Court in _**V. Krishnamoorthi V AAI**_ in W.P.No.19414 of 2008 the issue considered was one and the same. There the respondent granted license to petitioner therein for running a coach service/car service. There the challenge was against circular issued in 2008, by which the license fee was W.P.(C) No.28805 of 2019 enhanced by 5 times. Despite the availability of a provision for arbitration, the contention of the petitioner that the enhancement was arbitrary and violative of principles of natural justice was accepted. The contentions raised by respondents as to the availability of a clause for arbitration; writ will lie in contractual matters, etc as raised in this writ petition were repelled. Relying on the judgment in (2004) 3 SCC 214, it was held that the respondents being instrumentalities of State, ought to have acted fairly and reasonably. It is the very same respondent which has enhanced the license fee in this case also. 11. Similar was the finding in the judgment of the Delhi High Court in _**C.P.Mittal's**_ case (supra) where the allottees of Public Call Offices challenged the action of the Northern Railway in demanded enhancement of commission from 10% to 102 to 150%, under the guise of policy decision. It was found that the action of a public utility service provider has caused immense injury to the licensees who were allotted PCOs in furtherance of welfare policies and therefore writ petition will lie under Article 226 of the Constitution of India and the enhancement was set aside. 12. In this context it is relevant to have a look at W.P.(C) No.28805 of 2019 the judgments relied on by the learned Counsel for the respondent. In the judgment in _**Kurien E. Kalathil's**_ case the apex court held that disputes arising out of contracts have to be settled in accordance with the contract and that contractual activities of a statutory body need not involve issues of public law. In _**Diamond & Gem Development & Investment Companies'**_ case (supra) the dispute was with a private company and Rajastan State Industrial Development & Invest Corporation, which had allotted land to the Diamond & Gem Corporation for establishment of Gem Industrial estate and executed lease deed for completing the project within 5 years. Cancellation of allotment was challenged. The Apex Court found that cancellation was under the Rules as well as in terms of the lease and found that it could have resorted to arbitration clause. In that judgment also the apex court held that court should not exercise its writ jurisdiction to enforce contractual obligations. It was also held that discretion must be exercised by the court on grounds of public policy, public interest and public good. In _**Joshy Technologies**_ case(supra) the Apex Court summarised the circumstances under which the High Court should not normally exercise its discretion, in para 69 of the judgment as follows: W.P.(C) No.28805 of 2019 _69.1. The Court may not examine the issue unless the action has some public law character attached to it._ _69.2. Whenever a particular mode of settlement of dispute is provided in the contract, the High Court would refuse to exercise its discretion under Article 226 of the Constitution and relegate the party to the said mode of settlement, particularly when settlement of disputes is to be resorted to through the means of arbitration._ _69.3. If there are very serious disputed questions of fact which are of complex nature and require oral evidence for their determination._ _69.4. Money claims per se particularly arising out of contractual obligations are normally not to be entertained except in exceptional circumstances._ 13. The very same principles were reiterated in the judgment in _**Gujarat Maritime Board v. Larsen and Toubro**_ _**Infrastructure Development Projects Limited & Anr:**_ [(2016) 10 SCC 46] also. 14. Thus it is well settled that whenever there is a provision for arbitration the parties shall resort to it. However it is pertinent to note that there is no factual disputes and the petitioner does not want to enforce any provision in the contract. In this case parties on either side are agencies under State Government and Central Government. There is a provision for 50% concession. It appears that the said concession is not referred to in the agreement executed between the petitioner and 1[st] respondent. The request of petitioner is rejected saying that the enhancement is based on policy decision. In the judgments in _**Peerless's**_ case or in _**Delhi Science Forum's**_ ## W.P.(C) No.28805 of 2019 case, relied on by the learned Counsel for the respondents it is held that the courts are not supposed to sit in judgment over matters of economic policy and that it should be left to the experts in the field. Both those judgments do not appear to have been rendered in a case where the dispute was between the agencies under the two Governments. Therefore the question whether the petitioner would be eligible for concession @ 50% as mentioned in Ext.P10 requires emergent consideration/reconsideration. 15. The respondents have stated that the concession is admissible only for those Government agencies, directly and fully controlled by the Government. Ext.P1 order would show that the petitioner was appointed as the agency of the Government of Kerala for running Air Cargo Complex. The said decision is taken pursuant to the policy decision of the Government of India to set up integrated Air cargo complexes in each State. Based on the said policy decision, the State Government has after undertaking a traffic survey and on a finding that Air cargo potential of the State is promising, declared that the petitioner would be the agency for running the complex. In Ext.P10 the respondents have stated as follows : **==> picture [317 x 8] intentionally omitted <==** W.P.(C) No.28805 of 2019 _xxxx xxxx_ _As per point No.2d) of the AAI, CHQ's letter mentioned as above, normal applicable licence fee will be the BASE for considering any concession to Govt. Agencies and/or other agencies as per policy of AAI, irrespective of the location of allotted sites. Hence, 50% of the normal rate of licence fee/land rent for the years from 2018-19 to 2021-22 (i.e 50% of Rs.1,895/per sqm/annum for paved land and 50% of Rs.1,575/- per sqm/annum for unpaved land) are applicable for the land allotted to Govt. Agencies including Defence at Trivandrum Airport._ _xxxx xxxx xxxx”_ Thus the 50% concession was ordered for the land allotted to Government agencies. That would mean that if the air cargo is under a government department 50% concession would be available. In the present case there is no separate claim for State Government. It is evident from Ext.P1 that the the petitioner is acting on behalf of the Government of Kerala in implementation of the policy decision of the Government of India to set up integrated cargo complexes, which could only be a public purpose. Therefore whatever benefit is admissible to the Government of Kerala should be granted to the petitioner. Correspondence had been going on between the Ministers of the State of Kerala and the Centre on the enhanced rate of license fee ever since its ## W.P.(C) No.28805 of 2019 enhancement. Though the respondents have stated that Govt. agency means agency which is fully controlled by the Government and that PSUs would not come within the said definition, nothing is seen in the orders to that effect. Therefore, to that extent I am of the view that the matter requires reconsideration by the respondents. Therefore, even without going into the arbitrariness in the escalation or the agreement executed between the parties, it is seen that a reconsideration is required at the end of the respondents as to the admissibility of concession to the extent of 50% to the petitioner. A decision shall be taken afresh in this matter after affording an opportunity of hearing to the petitioner as well as the State Government within a period of three months from the date of receipt of a copy of the judgment. Till a decision is taken the respondents shall not initiate any coercive action against the petitioner. The Writ Petition is disposed as above. ## **Sd/-** ## **P.V.ASHA** rkc ## **JUDGE** WP(C).No.28805 OF 2019(A) 19 ## **APPENDIX** ## **PETITIONER'S/S EXHIBITS:** **EXHIBIT P1 TRUE COPY OF THE ORDER DATED 30.4.1979 ISSUED BY THE GOVT. OF KERALA BEARING NO.GO.MS.NO.215/79/ID TO THE PETITIONER.** **EXHIBIT P2 TRUE COPY AGREEMENT DATED 1.10.1997 EXECUTED BETWEEN THE PETITIONER AND THE 1ST RESPONDENT. EXHIBIT P3 TRUE COPY OF THE AGREEMENT DATED 26.3.2012 EXECUTED BETWEEN THE PETITIONER AND THE 1ST RESPONDENT. EXHIBIT P4 TRUE COPY OF THE COMMUNICATION ISSUED BY THE 1ST RESPONDENT DATED 1.4.2014 TO ALL AIRLINES. EXHIBIT P5 TRUE COPY OF THE LETTER DATED 27.1.2015 ISSUED BY THE 1ST RESPONDENT TO THE PETITIONER. EXHIBIT P6 TRUE COPY OF THE LETTER DATED 25.3.2015 BEARING NO.20/15/M(IND.&IT) SENT BY THE HON'BLE MINISTER FOR INDUSTRIES AND INFORMATION TECHNOLOGY, GOVT. OF KERALA TO THE HON'BLE MINISTER FOR CIVIL AVIATION, GOVT. OF INDIA. EXHIBIT P7 TRUE COPY OF THE LETTER DATED 19.6.2015 SENT BY THE CHAIRMAN OF THE 1ST RESPONDENT WROTE TO THE PRINCIPAL SECRETARY TO THE GOVERNMENT. EXHIBIT P8 TRUE COPY OF THE LETTER DATED 2.7.2015 SENT BY THE HON'BLE CHIEF MINISTER, GOVT. OF KERALA TO THE HON'BLE MINISTER FOR CIVIL AVIATION, GOVT. OF INDIA. EXHIBIT P9 TRUE COPY OF THE LETTER DATED 18.12.2017 ISSUED BY THE PETITIONER TO THE ADDITIONAL CHIEF SECRETARY, INDUSTRIES DEPARTMENT, GOVT. OF KERALA. EXHIBIT P10 TRUE COPY OF THE LETTER DATED 5.7.2018 ISSUED BY THE 1ST RESPONDENT TO THE PETITIONER. EXHIBIT P11 TRUE COPY OF THE LETTER DATED 10.8.2018** WP(C).No.28805 OF 2019(A) 20 **ISSUED BY THE PETITIONER TO THE CHAIRMAN OF THE 1ST RESPONDENT.** **EXHIBIT P12** **TRUE COPY OF THE LETTER DATED 17.9.2018 ISSUED BY THE PETITIONER TO THE PRINCIPAL SECRETARY TO THE GOVT., INDUSTRIES DEPARTMENT, GOVT. OF KERALA.** **EXHIBIT P13 TRUE COPY OF THE LETTER DATED 26.10.2018 ISSUED BY THE 1ST RESPONDENT TO THE PETITIONER.** **EXHIBIT P14** **TRUE COPY OF THE LETTER BEARING DO NO.123/PS/IND, GAD & NORKA DATED 15.11.2018 ISSUED BY THE PRINCIPAL SECRETARY TO THE GOVT., INDUSTRIES DEPARTMENT, GOVT. OF KERALA TO THE CHAIRMAN OF THE 1ST RESPONDENT.** - **EXHIBIT P14A TRUE COPY OF THE LETTER DATED 17.1.2019 BEARING NO.ED/CARGO/1360/TRV/CUDCT/2018 ISSUED BY AAI CARGO LOGISTICS & ALLIED SERVICES COMPANY LTD. TO THE PRINCIPAL SECRETARY, GOVT. OF KERALA.** - **EXHIBIT P15 TRUE COPY OF THE LETTER DATED 7.2.2019 ISSUED BY THE 1ST RESPONDENT TO THE PETITIONER.** - **EXHIBIT P16 TRUE COPY OF THE LETTER DATED 19.2.2019 ISSUED BY THE CHIEF EXECUTIVE OFFICER OF AAI CARGO LOGISTICS & ALLIED SERVICES COMPANY LTD., A SUBSIDIARY OF THE 1ST RESPONDENT, TO THE PRINCIPAL SECRETARY TO THE GOVT., INDUSTRIES DEPARTMENT, GOVT. OF KERALA.** - **EXHIBIT P16A TRUE COPY OF THE LETTER DATED 13.3.2019 ISSUED BY THE 1ST RESPONDENT TO THE PETITIONER.** **EXHIBIT P17 TRUE COPY OF THE LETTER DATED 13.3.2019 ISSUED BY THE 1ST RESPONDENT TO THE PETITIONER.** ## **RESPONDENT'S/S EXHIBITS:** **EXHIBIT R2 A TRUE COPY OF THE LICENCE AGREEMENT DATED 26.3.2012, ALONG WITH ANNEXURE A1 AND AWARD LETTER DATED 16.2.2012.** **EXHIBIT R2 B TRUE COPY OF THE LETTER NO-** WP(C).No.28805 OF 2019(A) 21 **AAT/COM/6(21)/96/933/9590 DATED 12.8.1996** **EXHIBIT R2 C TRUE COPY OF THE LETTER NO-AAT/LM/KSIE DATED 16.2.2012.** **EXHIBIT R2 D TRUE COPY OF THE LETTER NO-AAT/LM35/LA/KSIE 2012 DATED 16.11.2012. EXHIBIT R2 E TRUE COPY OF THE LETTER NO-AAT/LM35/LA/KSIE/2012/577 DATED 13.12.2012. EXHIBIT R2 F TRUE COPY OF THE CIRCULAR NOAV.21012/20/2014-LM DATED 20.10.2014 ISSUED BY THE CHQ OF AAI. EXHIBIT R2 G TRUE COPY OF THE CIRCULAR NOAV.21012/58/2016-LM/710 DATED 4.12.2017 ISSUED BY THE CHQ OF AAI. EXHIBIT R2 H TRUE COPY OF THE LICENCE AGREEMENT DATED 1.10.1997 EXECUTED BETWEEN THE AAI AND KSIE. EXHIBIT R2 I TRUE COPY OF THE LETTER D.O.NOED/CARGO/1360/TRV/2019 482 DATED 4.4.2019 EXHIBIT R2 J TRUE COPY OF THE LETTER NO-AAI/F&A/ CARGO/2018-19/F&A/6186 DATED 18.9.2018 EXHIBIT R2 K TRUE COPY OF THE LETTER NOAAI/F&A/CARGO/2018-19 DATED 7.8.2018 EXHIBIT R2 I TRUE COPY OF THE LETTER NOAAI/F&A/CARGO/2018-19 19/1819/445 DATED 7.8.2018. EXHIBIT R2 M TRUE COPY OF THE INTERIM ORDER DATED 28.5.2015 PASSED BY THE HON'BLE HIGH COURT IN WPC NO-2491 OF 2015. EXHIBIT R2 N TRUE COPY OF THE LETTER NOAAT/LM/CIRCULAR/2018/180 DATED 5.7.2018 ADDRESSED TO AII AIRLINES /AGENCIES/OIL COMPANIES/GOVERNMENT DEPARTMENTS.**