In a significant ruling with broad implications for statutory authorities across India, the Supreme Court of India clarified the legal boundaries of regulatory bodies in appellate litigation. The case involved the Airports Economic Regulatory Authority of India (AERA), which sought to challenge a decision of the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) on tariff determinations for aeronautical services at major airports, including the Delhi International Airport. The apex court, led by Chief Justice Dr. D.Y. Chandrachud, held that while quasi-judicial bodies should not typically defend their own orders in appeals, regulatory authorities like AERA have the right to do so in cases where public interest and regulatory oversight are at stake.
This judgment is poised to influence the way statutory bodies approach appellate litigation, particularly in sectors such as telecommunications, power, and infrastructure, where regulatory decisions often impact large swathes of the public and economic interests.
Background of the Case:
The dispute arose from the role of AERA, a statutory body established under the Airport Economic Regulatory Authority of India Act, 2008 (AERA Act), to regulate tariffs and charges for aeronautical services rendered at airports, as well as to monitor performance standards. AERA’s regulatory mandate extends to both government-operated and privately managed airports, including those like the Delhi International Airport, which is operated by a private consortium.
In its capacity as the tariff regulator, AERA had issued several orders concerning the determination of charges for aeronautical services. However, these orders were challenged before the Telecom Disputes Settlement and Appellate Tribunal (TDSAT), which acts as the appellate body under the AERA Act. The TDSAT’s decision led to AERA filing an appeal before the Supreme Court, a move that prompted critical legal questions about whether a statutory authority, particularly one exercising quasi-judicial powers, can file an appeal against its own adjudicative decision.
The respondents, led by Delhi International Airport Ltd. (DIAL), objected to AERA’s appeal, arguing that AERA, being the body that passed the original order, cannot legally defend or challenge its own decisions in an appellate court. This challenge raised the question of whether AERA had the legal standing to contest the TDSAT’s orders, and whether its role in setting tariffs was strictly regulatory or quasi-judicial in nature.
Legal Issues Involved:
1. Maintainability of AERA’s Appeal: One of the central legal issues in the case was whether AERA, as a statutory regulator, had the right to challenge an order of the appellate tribunal under Section 31 of the AERA Act. The respondents contended that AERA, as a quasi-judicial body, could not be considered an “aggrieved party” eligible to file an appeal.
2. Quasi-Judicial vs. Regulatory Function: Another key issue was the nature of AERA’s role in determining tariffs. The court had to decide whether the determination of aeronautical tariffs by AERA constituted a purely regulatory function, which could justify its participation in appeals, or whether it was a quasi-judicial function, limiting AERA’s ability to defend or challenge its orders.
3. Role of Statutory Authorities in Appeals: The broader legal question addressed whether regulatory bodies performing adjudicatory functions can participate in appeals where their decisions are under scrutiny, or whether their participation in such cases violates the principles of natural justice.
Decision of the Court:
The Supreme Court, in its detailed judgment authored by Chief Justice Dr. D.Y. Chandrachud, ruled in favour of AERA, allowing the appeals under Section 31 of the AERA Act. The bench, which also included Justice J.B. Pardiwala and Justice Manoj Misra, held that AERA’s participation in the appeal was justified due to its dual role as both a regulator and a body responsible for safeguarding public interest. The court emphasized that while judicial or quasi-judicial bodies are generally discouraged from defending their own orders in appeals, statutory regulators like AERA have a vested interest in such matters, especially when broader economic and public welfare considerations are at play.
The court made it clear that AERA’s tariff-setting function is primarily a regulatory one, not an adjudicatory task. Thus, AERA had the right to appeal decisions that affected its regulatory responsibilities and the public interest.
Key Observations:
In clarifying the role of statutory authorities in appeals, the Supreme Court reiterated that:
“Judges only speak through their judgments. Any dilution of this principle would lead to a situation where every judicial authority would be called upon to justify their decisions in the Court of appeal. This would break down the entire edifice of the judicial system”.
However, the court distinguished regulatory authorities from strictly judicial bodies, noting:
“An authority must be impleaded as a respondent in the 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”
Details of the Proceedings:
The case saw a high-profile representation of parties. Attorney General R. Venkataramani and Solicitor General Tushar Mehta argued for the Union of India and AERA, while Senior Advocates K.K. Venugopal, Dr. Abhishek Manu Singhvi, and Arvind Datar appeared for the respondents, including Delhi International Airport Ltd. The respondents contended that AERA, as the tariff-setting body, could not contest an appeal against its own orders, a position the court ultimately disagreed with.
The judgment also drew from earlier rulings on quasi-judicial bodies, including the famous PTC India Ltd. vs Central Electricity Regulatory Commission case, which similarly addressed the role of regulatory commissions in appealing decisions related to tariff determinations.
