In January, the Directorate General of Civil Aviation (DGCA) slapped a penalty of Rs 20 lakh on Kolkata's Netaji Subhas Chandra Bose International Airport for violating safety regulations by neglecting runway maintenance.
In May, the DGCA imposed penalties on three private-sector airlines -- SpiceJet, Vistara and IndiGo.
SpiceJet was penalised Rs 10 lakh for training its Boeing 737 Max aircraft’s pilots on a faulty simulator that could have compromised flight safety.
Vistara was fined Rs 10 lakh for allowing an inadequately trained pilot to land a flight with passengers on board at Indore airport.
IndiGo was fined Rs 5 lakh for not allowing a specially abled child to board a flight at Ranchi airport.
Beginning in May 2021, about Rs 1 crore has been collected in the form of penalties and deposited in the Consolidated Fund of India, people in the DGCA familiar with the development said.
Imposition of penalties like the ones on Kolkata airport and the three airlines has been possible because the rules have changed and the aviation watchdog has been armed with the power to fine entities under its purview for wrongdoing.
Speculation had arisen that DGCA received the power to fine aviation entities as a way for the government to exercise greater control over aviation after the handover of Air India to the Tata Group.
Tata Group received control of Air India in January after emerging as the successful bidder for the airline it offered to purchase for Rs. 18,000 crore.
Experts maintain that the powers DGCA is now exercising has nothing to do with the sale of Air India.
DGCA gets sharper teeth
It is a change from the times when DGCA had to approach the courts in case it had a case for fining an airline – those were the years when the DGCA was limited to imposing administrative and logistic penalties.
The Aircraft Act, 1934 the statute relating to securing safe aircraft operations and ensuring civil aviation in line with international standards, was amended by the Aircraft (Amendment) Act, 2020, explained Aakanksha Joshi, a partner at the law firm Economic Laws Practice.
The amended Act raised the maximum penalty for breach of any provision of the Aircraft Act or the Aircraft Rules from Rs 10 lakh to Rs 1 crore.
The 2020 Amendment also added Section 10A to the Aircraft Act, enabling the central government to appoint officers for deciding penalties. The government vested DGCA with the power to decide and impose penalties, Joshi added.
The Aircraft Act, 1934 and Aircraft Rules, 1937, did not prescribe any financial penalties, said Gaurav Dayal, a partner at Lakshmikumaran & Sridharan Attorneys. The Rules too were amended in 2020.
It makes sense to arm the regulator with the authority to impose penalties on aviation entities for offences without always leading to the suspension of their licenses, said Neha Singh, an associate partner at Link Legal.
It became necessary to change the rules after audits performed by the International Civil Aviation Organisation (ICAO) in 2012 and 2015 indicated a need to reinforce the regulator’s powers and allow its officials to impose heavier fines on individuals or organisations for breaching legal provisions.
ICAO observed that DGCA lacked the legal power to impose financial penalties, which were possible only with the support of a court ruling, said Singh.
Given that it is not practical to prosecute entities for each and every offence, provisions for the imposition of fines were included in the Aircraft Act to arm the DGCA and Bureau of Civil Aviation Security with the power to impose financial penalties.
According to Joshi, the Aircraft Act is silent about what to do with the money collected in the form of penalties and it will go to the Consolidated Fund of India.Under Article 266(1) of the Constitution, all revenue by way f Income Tax, Central Excise, Customs and other receipts flowing to the Government in connection with the conduct of Government business, that is Non-Tax Revenue, are credited to the Consolidated Fund of India, which finances government expenditure.