Travel Agents Association of India vs Union of India and Others

A.S. Bopanna, J.—The petitioners are before this Court seeking implementation of the circular dated 17.12.2012 passed by the second respondent (Annexure-Y); to declare resolution 818g passed by the third respondent as being contrary to the Aircraft Act, 1934 (''the Act'' for short) and Aircraft Rules, 1937 (''the Rules'' for short). The petitioners are also seeking for issue of direction to the third respondent and its member Airline Corporation to pay minimum base commission on gross passenger fare and other charges as was being paid prior to October 2008 and for other ancillary reliefs. The members of the petitioners-association claim to be IATA accredited i.e., the third respondent herein. The respondents No. 4 and 5 who have impleaded themselves are the Airline Operators. By such accreditation, the travel agents get access to the Airline members within the scope of the Sales Agency agreement which would facilitate the sale of international and domestic tickets and would also ensure the standard procedure to deal with the member Airlines. Sale Agency Agreement is stated to have been entered into by IATA with individual Travel Agents who are all members of the petitioners-association. Pursuant to such agreement, since the members of the petitioners-association were facilitating the ticket reservations etc, they were being paid commission by various member Airlines governed under the resolution 016a whereunder the rate of commission to an accredited agent was fixed at 9%. Subsequently the third respondent passed a country specific resolution vide resolution 810i where the amount of remuneration was also introduced along with commission as an alternative. It is the case of the petitioners that such resolution did not have the approval of the second respondent and even though the same was opposed by the petitioner, the commission payable was reduced from 9% to 7% with effect from January 2002 and further reduced to 5% in 2004.

The Travel Agents and their association made several representations and also approached this Court in W.P. Nos. 12368/2005 and 14978/2005. The said petitions were disposed of on 20.12.2007 recording the submissions of the learned counsel for the parties and allowing the representations to be made for consideration. The circulars dated 11.05.2009 and 27.07.2009 were issued stating that all member Airlines of respondent No. 3 need to observe the provisions of the Act and Rules. Despite all this, the commission which had been reduced from time to time has been made as 0% commission, but they were permitted to charge transaction fees directly from the customer. Pursuant to a writ petition filed before the High Court of Kerala, detailed discussions were held between the representatives of the Government, Airline Corporation and Travel Agents and an order dated 05.03.2010 was passed by the second respondent holding that the transaction fee is a part of tariff and there is no requirement for the consumers to pay the same. Hence, Rule 135 was to be followed by the Airlines to determine the tariff which also included the commission. Despite all the earlier proceedings, the third respondent has proceeded to pass the resolution 818g which incorporate the words "any commission or other remuneration" and as such the petitioners are aggrieved by the non-payment of commission by the member Airlines of the third respondent. The petitioners are therefore before this Court.

The private respondents have filed their separate objection statement. Apart from seeking to justify the Resolution 818g relating to the remuneration of the Agents accredited to IATA and the same being pursuant to the contract between the parties regarding which the statutory respondents have no role to issue any directions, the private respondents have also raised the threshold contention relating to the maintainability of these writ petitions. Firstly, it is contended that this Court does not have territorial jurisdiction to entertain the petition as the respondents do not have the seat of power or offices herein and the petitioners are also situate in Mumbai and as such they are not within the jurisdiction of this Court. Secondly, it is contended that the relationship between the members of IATA and the Airline agencies is purely contractual and the Resolution 818g being essentially contractual between private parties, no Mandamus can be issued by this Court in exercise of its writ jurisdiction under Article 226 of the Constitution. Above all, it is contended that these petitions are barred by the principles of res judicata as the petitioners had failed before this Court when the same grievance was raised at an earlier point wherein, the matter being contractual was also noticed by this Court.

Heard Sri. S.S. Ramdas, learned Senior Counsel on behalf of Sri. Abhilash Raju, learned Counsel for the petitioners, Sri. Kalyan Basavaraj, learned Assistant Solicitor General, Sri. Padmanabha Mahale, learned Senior Counsel for M/s. M.V. Kini & Co., and Sri. Sandeep Grover, learned Counsel for the respective respondents and perused the petition papers.

Though the learned Senior Counsel for the petitioners has referred in detail to the provisions in Section 5(2)(ab) of the Act and Rule 3(54A) and 135 of the Rules to contend that in view of the provisions contained therein, an obligation is cast on the second respondent as the statutory authority to direct the third respondent to provide for payment of commission to the agents as it forms a part of the tariff, the contention raised on behalf of the respondents with regard to the present petition being barred by res judicata needs to be adverted at the outset. Only thereafter, if need be, the other threshold contentions relating to jurisdiction and exercise of power under Article 226 of the Constitution or the merits will arise for consideration. This is so, since it is evident from the writ papers that the same parties were before this Court on earlier occasions, but whether that constitutes a bar for the present petitions needs to be examined.

The learned Counsel for the fourth and fifth respondents in order to contend that these petitions cannot be entertained once over again has relied on the decision in the case of State of U.P. and another Vs. Labh Chand, wherein, in a circumstance where the first petition filed by the petitioner therein on the ground of non-exhaustion of the alternate statutory remedy had been dismissed and when the High Court had entertained the subsequent writ petition filed by the same petitioner by relying on the decisions of the Hon''ble Supreme Court, the same was disapproved. In that context, it was held that when the High Court in the first instance had refused to entertain the first writ petition on the ground of non-exhaustion of statutory alternate remedy and it had been rightly and properly exercised, the same could not have been ignored by the same High Court when the party files a second writ petition respecting the same subject matter and it could not have been entertained.

The learned Senior Counsel for the petitioners on the other hand has relied on the following decisions on that aspect of the matter to contend that these petitions are maintainable:

i) The case of The State of Orissa Vs. Sudhansu Sekhar Misra and Others, wherein it was noticed that though reference to ''cadre'' was made in the earlier decision, the question considered in the earlier case was as regards the scope of expression "control over district court" in Article 235 and the reference to cadre was only incidental. Hence, it is held that a decision is only an authority for what it actually decides and what is of essence in a decision is its ratio and not every observation found therein nor what logically follows from the various observations made in it.

(ii) The case of Hoshnak Singh Vs. Union of India (UOI) and Others, wherein the contention that the appeal must fail for the same reason for which the earlier petition was dismissed since the cause of action for both the petitions was the same was noticed, yet it was further noticed that the earlier petition was dismissed by a non-speaking one word order ''dismissed''. In that context, it was held that the High Court may as well dismiss the petition in limine on the ground of delay or laches or on the ground of alternative remedy. Hence, it was held that the second petition after pursuing the alternative remedy would not be barred by the principles analogous to res judicata. It is further held that more often a petition under Article 226 is dismissed on the ground that before invoking the extraordinary jurisdiction of the High Court, it is expected that the petitioner should exhaust the alternative remedy and in such situation, the petition is dismissed in limine. If after exhausting the remedy under the statute, even if the petitioner fails therein and the original order under challenge had merged in the appellate or revision order, the second petition under Article 226 would not be barred by the principles analogous to res judicata because the cause of action is entirely different and the merger of the order cannot stand in the way of invoking the jurisdiction of the High Court. It is also held that if a writ petition is dismissed in limine and an order is pronounced in that behalf, whether or not the dismissal would constitute a bar would depend upon the nature of the order. If the order is on merits, it would be a bar; if the order says that the dismissal was for the reason that the petitioner was guilty of laches or that he had an alternative remedy, it would not be a bar except in cases indicated in the judgment.

(iii) The case of Government of Karnataka and Others Vs. Smt. Gowramma and Others, wherein it is held that the Courts should not place reliance on decisions without discussing as to how the factual situation fits in with the fact situation of the decision on which reliance is placed. Observations of Courts are neither to be read as Euclid''s theorems nor as provisions of the statute and that too, taken out of their context. The observations must be read in the context in which they appear to have been stated. The judgments of Courts are not to be construed as statutes.

Apart from citing the above decisions, the learned Senior Counsel for the petitioner also sought to distinguish the decision cited by the learned Counsel for the fourth and fifth respondents by contending that the observations made therein is in a circumstance where the petitioner therein had re-approached the Court once over again with the same case without even exhausting the alternative remedy for which purpose it was dismissed at the first instance. It is contended that in the instant facts, the petitioners had approached the authorities after the disposal of the earlier petition, but their grievance was not redressed and as such there is no bar to invoke the jurisdiction by a fresh petition.

A perusal of the decisions noticed above would indicate that the case of State of Orissa (supra) and the case of Government of Karnataka (supra) relied on by the learned Senior Counsel for the petitioners is rendered in the context of considering the scope of a binding decision so as to act as precedent and in that context, the observations as noticed above was made. As such, the same would not be of assistance in the instant case where the consideration is as to whether in relation to the same issue between the same parties, the view taken earlier by the Court would bar the subsequent petition on the same issue, being analogous to res judicata. From the other two decisions noticed above, it is clear that if the first petition between the parties is dismissed due to the non-exhaustion of the alternate remedy, if the petitioner re-approaches the Court without exhausting the alternative remedy, the second petition would be barred. On the other hand, if in such circumstance the petitioner avails the alternative remedy, but fails therein and thereafter approaches the High Court, the petition is to be entertained and to be considered on merits of the rival contentions. It is in that context the manner of consideration of the earlier petitions before this Court needs to be adverted, so as to appreciate the said position.

While on the aspect of res judicata, the law is no more res integra that the principles of res judicata and constructive res judicata is applicable to writ proceedings as well. Hence, whether the matter which is directly and substantially in issue was also directly and substantially in issue in the earlier proceedings also needs to be examined. In that view, a reference made to the order dated 20.12.2007 in W.P. No. 12368/2005 and 14978/2005 (Annexure-F) passed by this Court would disclose that the petitioners herein were also the petitioners therein. Though the Resolution 810i of the third respondent herein was the subject matter, the issue pertained to the payment of commission to the agents in the context of the same being reduced. To the extent, as to whether it is a contractual matter or as to whether the second respondent has a statutory obligation to discharge was not decided therein. However, on the concession made by the learned Senior Counsel for the parties, to the extent of filing a representation and hearing the same was recorded and the petitions were disposed of.

The petitioners no doubt had made a detailed representation thereafter, but the same has not fructified into beneficial consideration for the petitioners. The petitioners would however rely on the Circulars and Communications dated 11.05.2009, 29.05.2009, 22.06.2009 and 27.07.2009 (Annexures-H to M). The perusal of the same would only indicate that the second respondent has issued instructions to adhere to Rule 135 of the Rules which relates to ''tariff''. The fact that the Airline operators are required to adhere to the tariff as per rules cannot be in dispute and to that extent, the second respondent can secure compliance is clear from the provision, but the circular and communications relied cannot lead to a conclusion that the second respondent can even enforce payment of commission to the agents by their principal, which is in the realm of contract between the contracting parties. Further, the order dated 05.03.2010 (Annexure-N) and the Circular (Annexure-M) is issued pursuant to the consideration ordered in WP(C) No. 16551/2009 by the Kerala High Court, wherein after detailed consideration, though with regard to the adherence to Rule 135 is emphasized, it has been held that the second respondent cannot lay down the quantum of commission payable by Airlines to agents and this has been conveyed to the High Court of Kerala and it has also been noticed by the High Court of Kerala in its subsequent order.

It is in the above background that the Resolution 818g which came into effect from 01.06.2011 which is now the subject matter in these petitions and the considerations made with regard to that Resolution also requires to be noticed. In fact the order dated 28.07.2011 (Annexure-S) would disclose that the second respondent has passed an order holding that payment of commission is a commercial arrangement between Airlines and Travel Agents and the second respondent has no role to play. In the light of these developments where the second respondent has also asserted that they have no role regarding payment of commission, the earlier writ petition filed by the petitioners; the issues raised therein and the nature of consideration made therein by this Court becomes relevant for consideration so as to come to a conclusion as to whether these writ petitions should be held to be barred or not.

The learned Senior Counsel for the petitioners with reference to the same has sought to contend that the relief prayed in the earlier petitions and these petitions is not the same. It is also contended that in any event, no decision on merits has been rendered, but liberty of filing representation was given and since the same has not been considered favorably, the petitioners are entitled to approach this Court as held in the cited decisions. To appreciate the said contention, a detailed reference to the earlier proceedings is necessary to be made. The copy of the order dated 31.05.2012 passed in W.P. Nos. 17600/2011, 10935/2011 and 3699/2012 (GM-RES) relied heavily by the respondents to seek dismissal of these petitions on the ground of res judicata is at Annexure- T to the petition.

A perusal of the order at Annexure- T will disclose that the petitioners in W.P. Nos. 32308/2013 and 38249/2013 are the respective petitioners in the earlier W.P. No. 17600/2011 which is one among the petitions disposed of by the common order. The prayers made in each of the petitions therein has been extracted in the order. To grant the benefit of the consideration of the representation, directed in the earlier order dated 20.12.2008 in W.P. No. 14878/2005 referred above is also one among the prayers therein. Further, the Resolution 818g assailed in these petitions was also assailed, seeking declaration that the same is null, void and unenforceable in India, being contrary to the Aircraft Act and Rules. In a connected petition, mandamus for payment of minimum base commission of 5% on each ticket as it existed prior to 01.10.2008 was also sought. The objection statement filed to those petitions by the fourth and fifth respondents herein who were the seventh and fifteenth respondents therein is available at Annexure-R3 to the objection statement filed herein. It is seen that very similar objections were raised therein also. In that view, the ultimate consideration made by the learned Judge while disposing of those writ petitions is to be noticed.

The rival contentions in a consolidated manner has been referred in paragraphs 4 and 5 of the order at Annexure-T. The consideration thereof and the conclusion reached is recorded in paragraphs 7 to 10 of the order. Since it forms the basis for the consideration of the maintainability or otherwise of these petitions, it would be profitable to extract the same for easy reference, which reads as hereunder,

I have given anxious consideration to the submission of the learned counsel. During the course of arguments, it is brought to the notice of the Court that the subject matter regarding payment schedule as well as the payment of commission can be referred to a Travel Agents'' Commissioner who is stationed in New Zealand.

All the learned counsel appearing for the Airlines submitted that if all the Travel Agents represented by their Association would come forward for a dialogue regarding the payment schedule as well as the payment of commission, they would certainly give a patient hearing regarding their grievance and act accordingly.

I am of the view that these writ petitions can be disposed of reserving liberty to the petitioners to have a dialogue with the Airlines for the relief sought for. I am of the view that the dispute inter se between the petitioners as well as the respondents i.e. Travel Agents would stem from the contract and its terms. Hence, the question of this Court stepping in and granting the relief under Article 226 of the Constitution does not arise.

Be that as it may, since the entire issue is sought to be resolved by having a dialogue, the question of keeping these petitions pending until it is over does not arise. In the event no consensus is arrived at between the parties, it is open for them to have the dispute resolved by an Arbitrator as envisaged under the contract.

(emphasis supplied)

From a careful perusal of the order, it appears to be categorical that though the learned Judge has indicated that the writ petitions could be disposed of reserving liberty to the petitioners to have a dialogue with the Airlines, a considered view has been taken that the dispute inter se between the petitioners as well as the respondents i.e. Travel Agents would stem from the contract and its terms. It is further concluded that the question of this Court stepping in and granting the relief under Article 226 of the Constitution does not arise. The learned Judge has not stopped at that, but in view of the dialogue being permitted as agreed by the parties, it has also been clarified that in the event no consensus being arrived between the parties, it is open for them to have the dispute resolved by an Arbitrator as envisaged under the contract.

Thus, when it is clear that the issues raised in the said writ petitions and these writ petitions are both directly and substantially the same, I am unable to persuade myself to accept the contention of the learned Senior Counsel for the petitioners that the prayers made in the earlier petitions and these petitions are different. Further, the distinction sought to be made that in the cited case, State of U.P. and Another (supra) it was a case of approaching the Court without availing the alternative remedy after disposal of the first petition, whereas the petitioners herein have made representation and since the same was not considered, their petition is maintainable is also not acceptable. I am of such opinion since as noticed, this Court apart from holding that it is a contractual matter and that exercise of power under Article 226 of the Constitution will not arise, has also foreclosed the remedy to the petitioners from re-approaching this Court by indicating the remedy that is available by Arbitration as envisaged under the contract if the dialogue fails. Hence, it is not a non-speaking one word dismissal as in the case of Hoshnak Singh (supra). The said order has attained finality. In such situation, this Court taking a different view by exercise of writ jurisdiction is barred in the light of the observations made in the earlier order between the same parties.

While on this aspect, it is also necessary to refer to the order dated 27.11.2012 passed in WP (C) No. 21908/2011(K) by the High Court of Kerala relied on by the learned Counsel for the respondents. All issues raised herein, including the provisions contained in Section 5 of the Act and Rules 3(54A), 135(1)(2)(2A) and (2B) of the Rules were referred and examined in the background of powers contained under Sections 5A and 5(2)(ab) and the contentions of the petitioners was negatived. What is further to be noticed from the said order is, in paragraph 24 of that order, the learned Judge while considering the contention relating to the power of the second respondent-DGCA to regulate the payment of Commission, was of the opinion that it depends on the terms of contract and is not liable to be probed by invoking the discretionary jurisdiction under Article 226 of the Constitution. What is important is that while concluding so, the learned Judge has also relied on the order dated 31.05.2012 passed by this Court in W.P. No. 17600/2011 (Annexure-T) herein which is the sheet anchor of the case of the respondents to contend that the present petition is barred, which I have already discussed elaborately. Hence, I certainly cannot take any other view, contrary to the view which has already been taken in the earlier proceedings relating to the same subject matter. When the above noticed position is clear, all other contentions that have been urged including the contention that the cargo agents are being paid Commission are all contentions which can only be urged before the Arbitrator to enable consideration about the nature of the contract agreed between the parties. Hence, it is not necessary to advert to the details of the contention. Further, in view of the above conclusion, the need for going into the details of the order dated 16.09.2013 (Annexure-Z) also does not arise for consideration. The applications in IA Nos. 5 and 6/2014 in both these petitions are therefore liable to be disposed of as unnecessary.

For all the aforestated reasons, these writ petitions stand dismissed with no order as to costs. The pending applications are also disposed of.