Back
IN THE HIGH COURT OF JUDICATURE AT MADRAS
M. SUNDAR, J.
Skyrams Outdoor Advertisings India Pvt. Limited, Chennai - Petitioner
Versus
Corporation of Chennai & Another - Respondent
W.P. Nos. 9222, 9225 & 10361 of 2019 & W.M.P. Nos. 9764, 9765 & 10902 of 2019
Decided On : 31-07-2019
Chennai City Municipal Corporation Act, 1919 - Section 326-D - arbitration proceedings - Coc at the time of the agreement - agreements shall hereinafter be referred to as said contracts - This Court is informed without any disputation or disagreement that these writ petitions arise out of similar/common facts and that the central theme/core issue is the same in all these three writ petitions - Notwithstanding various averments, grounds, contentions and averments in the nature of arguments raised in the affidavits filed in support of the writ petitions and counter affidavits, from the arguments that were projected at the hearing, it emerges clearly that writ petitions turn on a very narrow compass which is more in the nature of a preliminary objection to writ petitions – Held, It is not a case where Steering Group is the be all and end all of dispute resolution. As already alluded to supra, the arbitration agreement, i.e., arbitration clause between parties is a tiered arbitration, as it provides for an attempt to resolve the dispute/s amicably at the first instance, take it to Steering Group if the attempt to resolve amicably does not fructify and thereafter, if it still cannot be resolved, the matter will be referred to a three member Arbitral Tribunal in accordance with A and C Act. On an extreme demurrer, even if the argument of writ petitioners counsel that disputes are outside the ambit of Steering Group is to be accepted, it makes no difference to the arbitration clause, as Steering Group after initial attempt to resolve amicably the dispute which has to be decided within 15 days, is going to say that it is beyond its purview and it will bring it to a three member arbitral tribunal - Owing to the narrative thus far, this court sustains the threshold barrier submission which is in the nature of a firewall submission, i.e., that writ petitioners have to resort to arbitration and not file these writ petitions. This court refrains from expressing any opinion on the merits of the submissions made by writ petitioners. As already alluded to supra, the broad grounds of attack projected by writ petitioners or in other words, grounds on which writ petitions are predicated have been referred to for the limited purpose of this court satisfying itself that disputes are not in the nature of disputes which are not arbitrable. If any opinion or view is expressed by this court on the merits of the grounds of attack, that will impact the arbitration proceedings before the arbitral tribunal and therefore - Steering Group shall hold meetings at least once every fortnight to review the progress during the Implementation Period and once every two months during the Operations Period. The Steering Group shall carry out such functions and exercise such powers as are prescribed/conferred by CoC at the time of the agreement - petitions are dismissed
ORDER :
1. This common order will govern instant three writ petitions. In other words, this common order will dispose of these three writ petitions.
2. Mr. K. Doraisami, learned Senior Counsel instructed by Mr. N. Mathivanan (counsel on record for writ petitioners in all the three writ petitions) and Mr. T.C. Gopalakrishnan, Standing Counsel for Chennai Corporation on behalf of all respondents in all the three writ petitions were before this Court.
3. Pleadings are complete and with the consent of learned counsel on both sides, all three main writ petitions were taken up, heard out and are being disposed of by this common order.
4. This Court is informed without any disputation or disagreement that these writ petitions arise out of similar/common facts and that the central theme/core issue is the same in all these three writ petitions.
5. Notwithstanding various averments, grounds, contentions and averments in the nature of arguments raised in the affidavits filed in support of the writ petitions and counter affidavits, from the arguments that were projected at the hearing, it emerges clearly that writ petitions turn on a very narrow compass which is more in the nature of a preliminary objection to writ petitions.
6. Short facts shorn of details/particulars and elaboration or in other words, factual matrix that is imperative for appreciating this common order runs as follows:
(a). All three writ petitioners entered into contracts with 'Chennai Corporation' ('CC' for brevity) and these contracts are captioned 'Concession agreements'. These concession agreements shall hereinafter be referred to as 'said contracts'.
(b). In said contracts, CC is the concessioning authority and each of the writ petitioners are Concessionaires. To be noted, there are three separate contracts between CC and each of the writ petitioners, these contracts shall collectively be referred to as 'said contracts' in plural and 'said contract' in singular.
(c). Writ petitioners are inter-alia in the advertising industry, besides being in the field of erecting and maintaining bus shelters, installation of 'closed circuit television cameras' ('CCTV Cameras') at public places, erection of traffic signals, etc., This Court is informed that the line of activities of writ petitioners also includes maintenance of such installations.
(d). CC issued a tender notification calling for bids for construction and maintenance of modern stainless steel bus shelters in Chennai city on what is known as 'Build-Operate-Transfer' (BOT) basis. Suffice to say that this tender notification culminated in said contracts each of which are for 10 years period extendable by another five years.
(e). Under said contracts, writ petitioners were to dismantle the existing bus shelters, construct new modern stainless steel bus shelters and maintain the same.
(f). This court is informed that in these modern bus shelters, writ petitioners shall put up advertisements and earn revenue from such advertisements from various entities and companies which place such advertisements.
(g). Under said contracts, writ petitioners are inter-alia to pay concession fees to CC. To be noted, said contracts came to be executed on 31.12.2015 and said contracts are operating.
(h). Under the aforesaid circumstances, CC issued three separate orders/demands enhancing the concession fee which is also referred to as licence fee. The enhanced license fee was demanded and writ petitioners were put on notice that action under Section 326-D of 'Chennai City Municipal Corporation Act, 1919' ('CCMC Act' for brevity) would follow in the event of non payment.
(i). Instant writ petitions have been filed assailing aforesaid three communications (which shall hereinafter be collectively referred to as 'impugned orders/demands' in plural and 'impugned order/demand' in singular) inter-alia on grounds that this hike is steep and that it has been made contrary to covenants in said contracts, more particularly covenant in the form of Article No.17.
7.
SupremeToday
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
