Much to the relief of airport service providers, the Delhi High Court on Wednesday dismissed a Public Interest Litigation challenging the imposition of an Airport Development fee (ADF) on passengers by the Delhi International Airport Limited (DIAL).

Petitioners charged that DIAL was not providing passengers with any extra value in exchange for the fee charged. A division bench comprising Chief Justice A.P. Shah and Justice Manmohan held that it found "no irregularities are attached to the imposition of development charges".

Pointing to Section 12 of the Airports Authority of India Act, which details the functions of the Airports Authority, the Court stated, "If the Act is construed sans the power of imposing the levy of development charges, then the lessee would not be entitled to recover any fees from the passengers for the other facilities".

Mr. Abhishek Manu Singhvi, Senior Counsel appearing on behalf of the DIAL had submitted that the fee was "an inter-generational fee and is being charged from passengers keeping in mind future prospects."

Solicitor General Mr. Gopal Subramaniam, appearing for the Union of India, also supported DIAL's stand, arguing that "The Government has delegated its powers to the airport operators to collect the ADF. The development of airports is a private initiative and therefore, charging a fee is not wrong and is well within the law." He also argued that the Government had delegated the Airports Authority of India's functions of maintaining, modernising and developing new greenfield airports to private companies through leases and joint ventures. Consequently the lease would be treated as a statutory assignment. 

Defending the ADF levy, Mr. Harish Salve, Senior Counsel, appearing on behalf of Mumbai International Airport Limited argued that ADF was a tariff charged for providing facilities to air travellers and was not a tax. He pointed out that the money collected was put in an escrow account controlled by the Government.

Several similar petitions had previously been filed before the Karnataka High Court in 2008, challenging, among other things, the levy of a User Development Fee at the Bangalore International Airport. However, the Karnataka High Court had also declined to intervene in the matter.