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2021 Supreme(Mad) 2173

IN THE HIGH COURT OF JUDICATURE AT MADRAS
N. Sathish Kumar, J.
M/s. Bhadra International (India) Pvt. Ltd, Rep.by its General Manager (Finance & Accounts) having its Branch Office at, Chennai – Petitioner
Versus
Airports Authority of India, Rep. by its Airport Director having office at Chennai International Airport, Chennai & Another – Respondents
O.P. No. 903 of 2019 & Appln. No. 8512 of 2019
Decided On : 06-09-2021

Advocates:
Advocate Appeared:
For the Petitioner:P.S. Raman, Senior Counsel for M/s. R. Maheswari, Advocate.
For Respondent:M/s. Father Xavier Arulraj, Senior Counsel, A. Arulmery, Advocate.

Headnote:

Constitution Of India,1950 - Article 12 - Civil Procedure Code,1908 - Rule 1 of Order 14 - Arbitration and Conciliation Act, 1996 - Section 34(2)(a)(b) - Order 14 Rule 8 - Airports Authority of India Act 1994. - Section 28 and 42 - lease agreement - Claimant entered in a lease agreement to carry out ground handling activities in Chennai Airport - It was Parent License Agreement - Agreement provides for entering into separate agreement - Accordingly separate License Agreement was entered and same was renewed on It is contention that Original Agreement did not provide for astronomical increase in lease rental - Whether Draft Regulations sent by Airport Authority of India pertaining to Lease and License Agreement which governs parties herein – Held, Airports Authority of India (Acquisition and Contract in relation to land) Regulations, 2014 - Draft regulations sent to Government indicates that short title and commencement relates to regulations to ensure that land resources of authority are put to optimum use as per Act - These regulations shall be called Airports Authority of India (Acquisition and Contract in relation to land) Regulations, 2014. - learned Arbitrator has also factually found that rents are due and notice issued by Eviction Officer is also valid in eye of law - At any event even any decision to bring revision of rents within purview of regulations such decision has been taken subsequent to Contract and parties have already agreed upon contract and continue to pay revised rent from Petitioner cannot contend that they are not payable rent till Regulations are finalized - Court view that contention lacks merit and detailed Award passed by Learned Arbitrator does not require any interference in any of grounds contemplated under Section 34 of Arbitration and Conciliation Act - Original Petition dismissed.

JUDGMENT :

(Prayer: Petition filed under Section 34(2)(b)(ii) & 34(2)(a)(iv) of the Arbitration and Conciliation Act, 1996 r/w Order 14 Rule 8 of the Original Side rules, to set aside the Award dated 06.08.2019 passed by the Sole Arbitrator in the dispute between the Petitioner and the Respondents.)

1. Challenge has been made to the Award passed by the learned Arbitrator rejecting the Claim and allowing the Counter Claim.

2. The brief facts leading to file this Original Petition is as follows:

2.a. The claimant entered in a lease agreement dated 29.11.2020 to carry out the ground handling activities in the Chennai Airport. It was the Parent License Agreement. Clause 4 of the above agreement provides for entering into separate agreement. Accordingly, separate License Agreement was entered on 05.01.2011 and the same was renewed on 23.06.2014. It is the contention that the Original Agreement did not provide for astronomical increase in the lease rental. Whereas by Circular dated 20.11.2014 the fee rates were revised with effect from 01.10.2014 in an astronomical manner. After the renewal agreement dated 23.06.2014 again the license fee was fixed at Rs.2,778/- per square meter per annum along with 7.5% annual compounded increase. Though, these two agreements were acted upon and the rents being paid at revised rates, it is the contention of the claimant that Original Agreement dated 29.11.2010 did not provide for midterm arbitrary increase in the rate of license fee applicable to licensed land, that the midterm increase now made have been arbitrarily fixed providing for 272% increase with effect from 01.01.2014. The claimant have also objected the same by their letter dated 08.12.2014. However, when the matter stood thus the Respondent issued notice dated 14.02.2017 through the Eviction Officer for payment of Rs.12,36,92,506/-

2.b. As the dispute arose, matter was referred to the Arbitrator. The main contention is that the astronomical increase in license fee is not provided for in the Parent License Agreement dated 29.11.2010. Besides the increase is not in line with the rental value in and around Chennai Airport. Such increase also made in violation of the principles of natural justice and that is also hit by the principle of legitimate expectations of the Claimant. It is further contended that the land license policy of the Airport Authority of India has not been finalized by the Authority till date. Therefore, the increase is bad in law.

3.a. It is the contention of the Respondent that the Circular dated 20.11.2014 is not pertaining to the Claimant alone and that it was a Common Circular applicable to all the licensees which hold the field for the past 4 years. The Claimant while disputing the Circular dated 20.11.2014 has not challenged the letter dated 27.10.2014 which prescribes the upward revision to which the Claimant was also one of the parties along with other licensees. Similarly, the objection of the Claimant as against the Revision was rejected by the Respondent and the same has not been challenged till date and it become final. It is the contention that the hike in rent is a policy decision of the Authority falling under Article 12 of the Constitution, it tantamounts to the public policy. As the Claimant is one of the parties to the Contract there cannot be any reference as against the Revision. It is also stated by the Respondent that in the License Agreement dated 05.01.2011 the Claimant was given initially 2,200 sq.mts.of land and due to subsequent allotments the Claimant came to occupy 7,105 sq.mts.of paved land + office space of 601.60 sq.mts. Till date the Claimant has not submitted a composite license agreement encompassing the total extent of allotment and therefore the Respondent was not in a position to handover the copy of the agreement. It is also stated that the Claimant had not renewed the license or submitted a License Agreement after 14.03.2013. The initial agreement dated 05.01.2011 has already expired by

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