There is a lot of hue and cry without knowing the complete facts about the incident. I have also worked at Airport. There must be some valid reasons with immigration authority to deny temparory visa to them. I think this was the best case of granting temporary visa to kids with charging proper fees, but what went wrong is really the matter of enquiry and the guilty surely be punished.
As far as granting trasit visa to French National is concerned there would have some valid reasons for that also. For example trasit visa is given to person who has fixed onward departure from some other Airport within India within next 24 to 48 hours.