Statutory authority for airport levies upheld, but excess ground-handling charges were curtailed and refund limited by unjust enrichment.

A levy imposed on airport ground handling agencies was held to be amenable to writ scrutiny because the airport operator performed statutory functions and could not exclude Article 226 review by characterising the charge as contractual. The levy was valid in principle only to the extent it was traceable to the airport statute, but the demanded rates were unlawful for periods before the agency's acceptance of 2% from 4 October 1995 and before the Board's 26 December 2001 decision supporting 11%; the 10% and 15% rates were upheld for the relevant periods. Refund was confined to excess amounts not passed on, subject to unjust enrichment.

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Issues: (i) whether the writ petition was maintainable against the airport operator and whether the impugned levy could be tested in writ jurisdiction; (ii) whether the first and second respondents had statutory authority to levy licence fee or royalty on ground handling agencies and whether the rates demanded at different times were lawfully fixed; (iii) whether the petitioners were entitled to refund of the excess amounts paid.

Issue (i): whether the writ petition was maintainable against the airport operator and whether the impugned levy could be tested in writ jurisdiction.

Analysis: The challenge raised a public law issue because the authority to impose and recover the levy was traced to the statutory scheme governing airports and not to a purely private arrangement. The airport operator, though a private entity, was performing functions derived from the statute and could not avoid scrutiny under Article 226 merely by asserting a contractual character. The petition was therefore maintainable.

Conclusion: The writ petition was maintainable against the second respondent.

Issue (ii): whether the first and second respondents had statutory authority to levy licence fee or royalty on ground handling agencies and whether the rates demanded at different times were lawfully fixed.

Analysis: The power to charge fees or rent had to be found in the governing airport statutes. Regulations and OMDA could not create an independent source of levy. The Court held that the levy on ground handling agencies fell within the statutory power to charge persons given a facility for carrying on trade or business at the airport. However, the rate demanded at 2% could not be recovered for any period prior to the petitioners' express acceptance from 4 October 1995; the 10% rate was supported by the Board resolution from 3 September 1984; the 11% rate had no basis until the Board decision of 26 December 2001; and the 15% enhancement from 1 July 2007 was valid.

Conclusion: The levy was valid in principle, but the demand was unlawful to the extent of 2% for the period prior to 4 October 1995 and 11% for the period prior to 26 December 2001.

Issue (iii): whether the petitioners were entitled to refund of the excess amounts paid.

Analysis: Refund could not be ordered mechanically because the Court had to examine whether the burden had been passed on to third parties. The doctrine of unjust enrichment applied, and restitution was confined to sums not recovered from airlines or other users. The Court therefore directed an adjudication by a competent officer to determine the refundable amount and interest.

Conclusion: Refund was allowed only to the extent the petitioners established that the excess amounts had not been passed on.

Final Conclusion: The challenge succeeded only in part: the levy was upheld in substance, but the demand was curtailed for the unlawful periods and the question of refund was remitted for determination subject to the bar of unjust enrichment.

Ratio Decidendi: A levy on airport ground handling agencies must be traceable to the governing statute, and refund of amounts collected under an invalid or excessive demand is permissible only to the extent the payer proves that the burden was not passed on to third parties.

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