DELHI HIGH COURT REITERATES APPLICATION OF PRINCIPLES OF NATURAL JUSTICE BEFORE CANCELLATION OF AVIATION PERMITS

The #DelhiHighCourt has in a recent case of M/s AR Airways Pvt Ltd vs Union of India and Others passed a Judgment dated 15-02-2021 and discussed the #Principles of #NaturalJustice to be applied before cancellation of #AirOperatorPermits.

In this case, the Petitioner, AR Airways Ltd, has filed a Writ Petition before the Delhi High Court and challenged a Show Cause Notice dated 30-07-2020 issued by the Respondent, whereby, the #MinistryofCivilAviation denied the renewal of Security Clearance of the Petitioner Company and also cancelled the Airport Entry Permits to the Petitioner’s Employees. The Respondent passed the following Impugned Orders in relation to the Petitioner, without citing any reasons for the same:

i) The Respondent cancelled the Petitioner’s Aerodrome Entry Permit (AEP), vide Order dated 04-09-2020.

ii) The Respondent further cancelled the Petitioner’s Temporary Aerodrome Entry Permit (TAEP), vide Order dated 04-09-2020.

iii) That security clearance is a pre-requisite for grant, renewal and continued validity of Air Operator Permit (AOP). As the Petitioner’s Security Clearance was cancelled, hence, its AOP was also cancelled by the Respondent, vide Order dated 07-09-2020.

The Delhi High Court made the following observations in this case:

1- That as per various precedents and judgements of the Supreme Court and High Courts, it is well established that at the stage of the show-cause, the person proceeded against must be informed about the charges and allegations levied against him and must be given a reasonable opportunity for answering such objections. These Principles of Natural Justice have to applied in such cases, otherwise, the entire proceedings initiated by the show-cause notice gets vitiated by unfairness.

2- In the present case, the Respondent failed to inform the reasons for denial of renewal of Security Clearance and cancellation Air Operator Permit in any of the Impugned Orders or the Show Cause Notice, hence, the Petitioner could not submit effective reply to the Show Cause Notice.

3- That the Respondent disclosed the reasons for cancellation of Air Operator Permit only before the Court, that is, the Beneficial Owner of the Petitioner Company, Shri Ashok Kumar Chaturvedi was convicted of various offences under the Indian Penal Code 1860 and the Prevention of Corruption Act 1988. As per the Ministry of Home Guidelines “Conviction in the Court of law in the cases of charge sheet filed for the Prevention of Corruption Act” qualifies as criteria for denial of security clearance to a company. Hence, the Respondent’s plea was that the cancellation of the Petitioner’s Permit was justified in view of the corrupt practices carried out by the Key Managerial Personnel of the Petitioner Company.

4- However, the absence of disclosure of specific reasons for cancellation of Air Operator Permit, renders the Show Cause Notice and the Impugned Orders perfunctory in nature and violative of Principles of Natural Justice, and thus void ab initio.

Thus, the Delhi High Court set aside the Show Cause Notice and the Impugned Orders passed by the Respondent in relation to the Petitioner Company and allowed the Respondent to proceed against the Petitioner in accordance with law.

Harini Daliparthy

Senior Legal Associate

The Indian Lawyer