In Brief
Delhi International Airport Ltd (DIAL) and Mumbai International Airport Ltd (MIAL) appealed against tariff determinations by the Airport Economic Regulatory Authority (AERA) and subsequent appellate tribunal orders. The Supreme Court examined multiple aspects of aeronautical tariff calculation under a price-cap inflation-X model. The Court upheld AERA's treatment of Fuel Throughput Charges as aeronautical revenue; the inclusion of all components in Hypothetical Regulatory Asset Base as pertaining to aeronautical services; the CPI-X formula application; and inclusion of revenue from disallowed areas. However, the Court partly allowed the appeal on the corporate tax element, holding that Annual Fees paid to AAI should not be deducted before calculating the tax component. The Court emphasized regulatory deference and rejected attempts to rewrite contractual formulas or conduct enhanced judicial scrutiny of pioneering infrastructure efforts.
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