Delhi HC allows DIAL to use more airport land for non-aeronautical purposes

Court asks Centre to extend all land-use liberalisation benefits to IGI Airport, at par AAI airports

The Delhi High Court on Monday directed the central government to extend benefits of liberalised land use under the National Civil Aviation Policy 2016 (NCAP 2016) to GMR Group-owned Delhi International Airport.

The judgment will enable Delhi International Airport Private Limited (DIAL) to use additional land (previously capped at five percent) for non-aeronautical purposes in Indira Gandhi International Airport (IGI Airport). DIAL holds 74 per cent equity in the IGI Airport, while the AAI owns the remaining 26 percent.

Ruling in favour of DIAL, Chief Justice G Rohini and Justice Sangita Dhingra Sehgal held that Clause 12(d) of the NCAP 2016, which had excluded existing airports under the private-public partnership model (PPP model) from availing the benefits of liberalised end-use restrictions, was unjustified and arbitrary in nature.

Concluding that both the NCAP 2016 and the Airports Authority of India (AAI) Act, 1994, were aimed at promoting the uniform and proper development of the entire aviation sector, the bench said that placing existing PPP airports in a separate class was unjustified and without any reasonable nexus of categorisation.

Rejecting the government's argument that the extension of these benefits to existing PPP airports would amount to a post-bid benefit, the order asked the central government to extend all NCAP 2016 land-use liberalisation benefits to IGI Airport, at par with other existing and future AAI airports.

"Liberalising the end use of the airport land and unlocking the potential of the same is undoubtedly to advance the public interest and for better management of the airport," the court said, while highlighting that the NCAP 2016 itself attempted to promote the expansion of non-aeronautical services.

This view of monetising airport land assets has been shared by Finance Minister Arun Jaitley in his recent budget announcement and also supported AAI Chairman G P Mohapatra. The high court verdict is expected to have an impact on all other airports currently existing under the PPP model of development.