Nav Bharat Enterprises vs Airports Authority of India

M. Jaichandren, J.—Heard Mr. K. Doraisamy, the learned Senior counsel appearing for the petitioner and Fr. A. Xavier Arulraj, the

learned Counsel appearing for the respondent.

It has been submitted by the petitioner that tenders were called for, for the grant of licence for management of Car Parking Services at Kamaraj

Domestic Terminal and Anna International Terminal at Chennai Air Port. The petitioner had participated in the tender. The tender submitted by the

petitioner had been accepted by the competent authority by an order in No. AAM/C.2908/2005/3823, dated 17.10.2005. The Airports Authority

of India granted the licence to the petitioner for a period of five years, with effect from 17.10.2005. Clause 16 of the Special Terms and

Conditions of the order provided for an increase of the licence fee. It was stated therein that in case of modification/re-designing of the Car Park

areas at Kamaraj Domestic Terminal and Anna International Terminal during the currency of the contract resulting in increase in the Car Park areas

and the resultant increase in the revenue to the Licensee, the licence fee shall be negotiated and the negotiated amount implemented for which the

licensee shall have no objection. Various other conditions had also been stipulated, as part of the Terms and Conditions of the contract.

It has been further stated that the respondent had written a letter in No. AAM/C.ST/2006/1038, dated 28.02.2006, to the effect that the

petitioner should pay the service tax, including Education Cess at 10.2 % on the lumpsum amount of Licence Fee contrary to its order, dated

07.12.2005. After several communications were exchanged between the petitioner and the respondent by letters, dated 11.05.2006 and

18.05.2006 and in accordance with the negotiations held on 19.05.2006, the respondent had demanded, in addition to the yearly increase of 10%

on the monthly licence fee an additional increase of 7% to adjust the Service Tax at 12.24%. By a letter, dated 18.07.2006, the petitioner had

informed the respondent that it would be possible to increase the licence fee only by 3% i.e. a sum of Rs. 2,10,625/- per month in addition to the

service tax at 12.24%, apart from the 10% annual increase. It was also pointed out that there is no modification/re-designing of the car park areas

and therefore, there is no resultant increase in revenue. As per Clause 16 of the Special Terms and conditions, there was no justification for the

respondent to enhance the licence fees.

It has been further stated that instead of considering the offer made by the petitioner, the respondent had issued an order in No.

AAM/C.2908/Vol.IV/2006/359, dated 19.01.2007, not only terminating the contract, but also debarring the petitioner from participating in Air

Ports Authority of India tenders for a period of two years. Hence, the petitioner had filed the present writ petition before this Court, under Article

226 of the Constitution of India, raising various grounds therein, challenging the impugned proceedings of the respondent, dated 19.01.2007.

Learned Counsel appearing for the respondent had contested the claims made by the petitioner. However, he had pointed out that according to

Clause 30 of the General Terms and Conditions applicable to the licence agreement entered into between the petitioner and the respondent, the

petitioner ought to have referred the dispute, if any, to be resolved by way of arbitral proceedings, rather than agitating the matter before this Court

by way of a writ petition invoking Article 226 of the Constitution of India. Clause 30 of the General Terms and Conditions of the licence agreement

reads as follows:

All disputes and differences arising out of or in any way touching or concerning this Agreement (except those the decision whereof is otherwise

herein before expressly provided for or to which the Public Premises [Eviction of Unauthorised Occupants] Act and the rules framed thereunder

which are now in force or which may hereafter come into force are applicable), shall be referred to the sole arbitration of a person to be appointed

by the Chairman/Member of the Authority. The award of the arbitrator so appointed shall be final and binding on the parties. The Arbitration and

Conciliation Act 1996 shall be applicable.

On such submissions being made, this Court is of the considered view that the dispute between the petitioner and the respondent ought to be

dealt with only in accordance with Clause 30 of the General Terms and Conditions of the licence agreement, dated 30.05.2007, entered into

between the petitioner and the respondent. The learned Counsel appearing on behalf of the petitioner has not disputed this factual position.

However, from the submissions made by the learned Counsels appearing on behalf of the parties concerned, it is understood that the status quo

prevailing as on today would be maintained till the arbitral proceedings are completed. It is also made clear that the petitioner is to co-operate in

the conduct and progress of the arbitration proceedings to be initiated by the respondent. The learned Counsel appearing for the respondent has

also submitted that the arbitral proceedings would be completed, within six months from the date of receipt of a copy of this order.

With the above observations, this writ petition is disposed of. No costs.