Ground Handling Association v. Union of India

May 16, 2025

Judgment: https://lawyerslibrary.in/books/owzx/
Citation: 2025:KER:33842 : 2025 (5) KLR 160
Court: High Court of Kerala at Ernakulam
Judge: Honourable Mr. Justice C.S. Dias
Case Number: W.P (C) Nos. 29297 & 29700 of 2024; May 16, 2025
Case Name: Ground Handling Association & Ors. v. Union of India & Ors.

Parties:

Petitioners:
- W.P (C) No. 29297/2024: Ground Handling Association, represented by its President.
- W.P (C) No. 29700/2024: Celebi Airport Services India Pvt. Ltd., Bird Worldwide Flight Services (India) Pvt. Ltd., and Indothai Airport Management Services Pvt. Ltd.
Respondents:
- Union of India (Ministry of Civil Aviation)
- Directorate General of Civil Aviation (DGCA)
- Cochin International Airport Ltd. (CIAL)
- Air India SATS Airport Services Pvt. Ltd. (Additional Respondent)

Facts:

CIAL, a non-AAI airport, issued a tender (Ext.P3) on July 10, 2024, to appoint second and third ground handling agencies for third-party ground handling services at Cochin International Airport.
Clause 5.5.2(b) of Ext.P3 initially barred scheduled/non-scheduled air carriers or their associates from bidding due to conflict of interest.
On August 8, 2024, CIAL issued an addendum (Ext.P4) deleting Clause 5.5.2(b), allowing such entities to participate.
Petitioners challenged Ext.P4, arguing it violates the National Civil Aviation Policy (NCAP) 2016, DGCA’s Aeronautical Information Circular (AIC) 03/2022, and AAI’s Ground Handling Regulations (2018 & 2023), which restrict airline operators to self-handling only.
Petitioners contended CIAL, as a State instrumentality due to 32.42% Government of Kerala shareholding and control, is subject to writ jurisdiction and must comply with regulations ensuring a competitive environment.
Respondents (CIAL and Air India SATS) argued that CIAL, as a non-AAI airport, is not bound by AAI regulations, and Ext.P4 promotes broader participation and competition. Air India SATS, a joint venture distinct from Air India, denied any conflict of interest.

Issues:

Whether CIAL is an instrumentality of the State under Article 12 of the Constitution, making it amenable to writ jurisdiction.
Whether Ext.P4 addendum, allowing airline operators or their associates to bid, is illegal and liable to be quashed.

Arguments:

Petitioners:
- CIAL is a State instrumentality due to significant government control (e.g., 32.42% shareholding, Chief Minister as Chairman, IAS officer as Managing Director).
- Ext.P4 violates NCAP 2016 and DGCA regulations, which mandate distinct and independent ground handling agencies to ensure competition. Allowing airline operators or subsidiaries to bid undermines fair competition.
- Cited DGCA’s AIC 03/2022 and AAI Regulations (2018 & 2023) restricting airline operators to self-handling.
Respondents:
- CIAL: As a public-private partnership and non-AAI airport, it is not bound by AAI regulations. Ext.P4 encourages broader participation without disqualifying any agency, aligning with Rule 92 of the Aircraft Rules, 1937, which mandates a competitive environment.
- Air India SATS: A distinct entity from Air India with separate management and operations, it faces no conflict of interest. Ext.P4 is within CIAL’s contractual prerogative and promotes competition.
- Union of India & DGCA: AAI Regulations apply only to AAI airports. Ext.P4, if allowing airline operators beyond self-handling, may violate 2023 Regulations, but CIAL’s autonomy as a non-AAI airport prevails.

Court’s Analysis:

Issue 1 (State Instrumentality):
- Noted conflicting precedents: John George Nechupadom (2022 KHC 8035) held CIAL as a State instrumentality; Girish G (2020 KHC 289) held otherwise. The former is under appeal.
- CIAL conceded not to press the maintainability issue, reserving rights in the pending appeal. The Court assumed CIAL’s amenability to writ jurisdiction for this case.
Issue 2 (Legality of Ext.P4):
- Rule 92 of the Aircraft Rules, 1937, and DGCA’s AIC 03/2022 mandate a competitive environment and distinct ground handling agencies. For airports with over 10 million passengers annually (like CIAL), three ground handling agencies must be appointed, including the airport operator’s subsidiary, Air India’s subsidiary, and another through transparent bidding.
- Ext.P4 allows broader participation without evidence of malice, arbitrariness, or irrationality. CIAL’s discretion to set tender conditions is upheld unless proven arbitrary, per Supreme Court precedents (Afcons Infrastructure Ltd., Association of Registration Plates, Michigan Rubber, Tata Motors).
- Petitioners failed to substantiate claims of favoritism or arbitrariness. The eligibility of bidders, including Air India SATS, is for CIAL to evaluate, subject to Central Government approval.

Held:

CIAL is amenable to writ jurisdiction for the purpose of this case, without prejudice to its contentions in the pending appeal.
Ext.P4 addendum is legal and within CIAL’s prerogative to modify tender conditions to ensure competition. No evidence of arbitrariness or violation of public interest.
Writ petitions dismissed.

Disposition: Writ Petitions (Civil) Nos. 29297 & 29700 of 2024 dismissed. No interference with Ext.P4 addendum.

Key Precedents Cited:

Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corporation Ltd., (2016) 16 SCC 818
Association of Registration Plates v. Union of India, (2005) 1 SCC 679
Michigan Rubber (India) Ltd. v. State of Karnataka, (2012) 8 SCC 216
Tata Motors Ltd. v. Brihan Mumbai Electric Supply & Transport Undertaking, 2023 SCC OnLine SC 671

Advocates:

For the Petitioners: Harish Gopinath Surumi Nazar S. Ramesh Babu (Senior Advocate)

For the Respondents: Krishna T.C. Abel Tom Benny Aaron Zacharias Benny (K/001533/2023) Amrutha Selvam (K/001249/2023) Gentle C.D. (K/62/2022) George G. Poothicote D. Prem Kamath (K/1285/1998) Tom Thomas (Kakkuzhiyil) (K/000821/2008) K.R. Paul (K/000579/2006) Clint Jude Lewis (K/001973/2024) M. Rishikesh Shenoy Ann Mary V.I. Benny P. Thomas (Senior Advocate) Fereshte D. Sethna T.C. Krishna (Deputy Solicitor General of India)

Addendum, Air India SATS, Aircraft Rules 1937, Airport Authority of India (AAI), Arbitrariness, Article 12 of Constitution, Cochin International Airport Ltd. (CIAL), Competitive Environment, Conflict of Interest, Directorate General of Civil Aviation (DGCA), Ground Handling Services, Judicial Review, National Civil Aviation Policy (NCAP) 2016, Public-Private Partnership, Self-Handling, State Instrumentality, Tender Notification, Third-Party Ground Handling, Writ Petition

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