The Kerala High Court dismissed appeals against a lower court order holding that airline commission to ticketing agents is a contractual matter, not a statutory tariff charge enforceable by writ.
Writ appeals and writ petitions dismissed without any order as to costs.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE THE CHIEF JUSTICE MR.NAVANITI PRASAD SINGH & THE HONOURABLE MR. JUSTICE RAJA VIJAYARAGHAVAN V
FRIDAY, THE 9TH DAY OF JUNE 2017/19TH JYAISHTA, 1939
WA.No. 275 of 2013 () IN WP(C).17408/2012 ------------------------------------------AGAINST THE JUDGMENT IN WP(C) 17408/2012 of HIGH COURT OF KERALA DATED 27-11-2012
APPELLANT/PETITIONER:
IATA AGENTS ASSOCIATION OF INDIA(IAAI) REP.BY ITS PRESIDENT, MR BIJI EAPEN, 39/6800,C-3,5TH FLOOR, VALLAMATTAM ESTATE, RAVIPURAM, COCHIN-682015
BY ADVS.SRI.P.RAVINDRAN (SR.) SRI.M.R.SABU
RESPONDENTS/RESPONDENTS:
1. THE DIRECTOR GENERAL OF CIVIL AVIATION TECHNICAL CENTRE OPP.SAFDARJUNG AIRPORT, NEW DELHI-110003
2. AIR INDIA LTD AIR INDIA BUILDING, 17TH FLOOR, NARIMAN POINT, MUMBAI-400021, REP BY ITS EXECUTIVE DIRECTOR-COMMERCILA , MR. F.J. VAZ
3. JET AIRWAYS INDIA LTD SIROYA CENTRE, SAHAR AIRPORT ROAD, ANDHERI(EAST)MUMBAI-400099, REP.BY ITS VICE PRESIDENT PASSENGER SALED INDIA, MS SONU KRIPALANI R1 BY ADV. SRI.N.NAGARESH, ASSISTANT SOLICITOR GENERAL R2 BY ADV. SRI.M.GOPIKRISHNAN NAMBIAR R2 BY ADV. SRI.P.GOPINATH R2 BY ADV. SRI.P.BENNY THOMAS R2 BY ADV. SRI.K.JOHN MATHAI R3 BY ADV. SRI.K.JAYAKUMAR (SR.) R3 BY ADV. SRI.M.P.KRISHNAN NAIR
THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 09-06-2017, ALONG WITH WPC NO.13123/2013 & WA NO.1136/2015, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
VPS
“C.R.”
NAVANITI PRASAD SINGH, C.J. & RAJA VIJAYARAGHAVAN V., J.
W.A. Nos.275 OF 2013, 1136 of 2015 & W.P.(C) No.13123 of 2013
Dated this the 9th day of June, 2017
JUDGMENT
Navaniti Prasad Singh, C.J.
2.The appellant in W.A. Nos.275 of 2013 & 1136 of 2015, who is the petitioner in W.P.(C) No.25752 of 2013, is an association of IATA accredited travel agents in India. They claim to be ticket selling agents, who sell tickets and get business to various Airlines, domestic and international. The submission on behalf of the appellants would be that Rule 3(54A) of the Aircraft Rules, 1937 defines “Tariff” to include the commission payable to the agents and further Rule 135 requires every air transport
undertaking to establish “tariff” having regard to all relevant factors including cost of operation, characteristics of service, reasonable profit and generally prevailing tariff. Explanation
W.A. Nos.275/13 & 1136/15 & W.P.(C) No.13123/13 2
(b) to sub Rule (2A) of Rule 135 is also referred to, to contend that “tariff” as published or advertised in any other way shall show a complete break-up of the total amount, indicating the fare, tax, fees or any other charge and fees has been explained to mean the amount payable to the service providers for provision of any service or facility to the passengers. The submission thus would be that commission payable to an agent is a statutory charge, statutorily payable and to be statutorily shown as a part of the tariff, as also on the ticket to be issued. That being so, the Airlines must fix commission for each ticketing transaction and show it as a part of the tariff. The relevant provisions are quoted hereunder:
Rule 3(54A) : “Tariff” means any fare, rate or charge collected by an air transport undertaking for the carriage of passengers, baggage or cargo, including the commission payable to the agents, and the conditions governing such fair, rate or charge.
Rule 135 .Tariff (1) Every air transport undertaking operating in accordance with sub-rules (1) and (2) of rule 134, shall establish tariff having regard to all relevant factors, including the cost of operation, characteristics of service, reasonable profit and the generally prevailing tariff.
(2)Every air transport undertaking shall cause to be published the tariff established by him under sub-rule (1) in his website or two daily newspapers, and shall display such tariff in a conspicuous part of his office and in the office of his agent, if any.
(2A) The tariff to be published under sub-rule (2) or advertised in any other way shall show the following particular, namely:-
W.A. Nos.275/13 & 1136/15 & W.P.(C) No.13123/13
3
(a) the total amount payable by a passenger; and
(b)a complete break-up of the total amount, indicating the fare, tax, fees or any other charge, if any, separately.
Explanation;- For the purposes of this sub-rule, -
a)tax means the amount payable to the Government; and
b)fees means the amount payable to the service providers for provision of any service or facility to the passengers.”
xxxxxx xxxxx xxxxxx
3.On the other hand, the learned counsel for some of the Airlines, who have been arrayed as respondents, submits that Airlines have their own packages for their ticketing agents. It is open to any person to join those packages and they would accordingly be remunerated. But, the contention that commission is a statutory obligation and must form part of the tariff, meaning thereby in respect of every ticket sold, cannot be accepted. For, according to the learned counsel, commission is a contractual remuneration payable by a principal to the agent and is a pure and simple commercial contract. It is submitted that what the appellant seeks to do is to convert a purely contractual obligation, by giving it a
W.A. Nos.275/13 & 1136/15 & W.P.(C) No.13123/13 4
statutory colour, and then seek for a mandamus for its payment. Such a relief cannot be granted.
4.Sri.P.Ravindran, learned senior counsel appearing for the appellant, drew our attention to Exts.P2 and P3 as available in W.P.(C) No.25752 of 2013, to contend that the Director General of Civil Aviation had directed the Airlines to implement its decision regarding commission payable to agents. He further
refers to Ext.P13 appellate order of the Central Government to buttress his contention that commission is a statutory liability arising between principal and agent, and in absence thereof the agents cannot exist. It is pointed out that it is an amount payable as a remuneration for service rendered. It is thus submitted that in exercise of the statutory appellate power even the Central Government has held out that commission has
to be paid. According to the learned Senior Counsel, commission is a statutory liability and on the same being withheld, a mandamus should issue.
W.A. Nos.275/13 & 1136/15 & W.P.(C) No.13123/13 5
done indirectly. Whether commission has to be paid by a principal to his agent or what should the commission be, are matters of pure contract between two contracting parties. No writ petition can be filed for enforcement of payment of commission or fixing the rate thereof. If no writ petition could be filed for the same then, by the ingenious process of giving it a colour of statute, the relief cannot be sought for.
6.We are clearly of the opinion that when Rule 3(54A), being in the definition part of the rules, as reproduced above, says that if commission is payable to the agent, it has to be shown separately in the ticket, the meaning is clear . It is only when commission is payable that it should be included in the tariff. It is not a compulsion to pay as it is only an interpretation/definition clause. Similarly, Rule 135 talks about fixation of tariff. It does not make it mandatory that commission has to be paid under the colour of law. If it was so, it would clearly amount to taxation. That power is not there. The only effect of Rule 3(54A) read with Rule 135 is wherever a charge by whatever name it may be called, is levied
W.A. Nos.275/13 & 1136/15 & W.P.(C) No.13123/13 6
in lieu of services being rendered by an agent for the benefit of the principal, if the agent is entitled for commission, it must be shown separately. No part of the Rules make it obligatory for any Airlines to fix commission much less for each transaction entered into by an agent. Those are purely contractual matters beyond public law domain and lies exclusively in private law field. The writ jurisdiction is not the remedy in such a situation.
We, therefore, find no reason to interfere with the order of the learned Single Judge. These writ appeals as well as the writ petitions are consequently dismissed.
SD/NAVANITI PRASAD SINGH, CHIEF JUSTICE
SD/-
RAJA VIJAYARAGHAVAN V., JUDGE
vps
2 issues framed by the court
Whether commission payable to ticket selling agents is a statutory charge forming part of the tariff under the Aircraft Rules, 1937.
Whether a high court writ of mandamus can be issued to compel airlines to fix commission rates contractually payable to agents.
2 provisions across 1 enactments
IATA Agents Association of India Rep by its President Mr Biji Eapen
Director General of Civil Aviation
Air India Ltd
Jet Airways India Ltd
Navaniti Prasad Singh
Raja Vijayaraghavan V
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
