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HIGH COURT OF KERALA
SHAJI P.CHALY, J
M/S DOWINS RESOURCES PVT LTD – Appellant
Versus
THE AIRPORT AUTHORITY OF INDIA – Respondent
WRIT PETITION (CIVIL) 1565/2017
Contract - Licence Agreement - Bank Guarantee - Sec 1, 2, 3 - Court interpreted the necessity of providing reasonable time for payment under adverse financial conditions, while upholding contractual obligations.
Fact of the Case:
The petitioner was awarded licenses for vehicle parking fee collection and trolley retrieval at an airport, but defaulted on payments leading to an attempt by respondents to invoke a bank guarantee.
Finding of the Court:
The court acknowledged the petitioner's financial difficulties and granted time until March 31, 2017, to clear dues, outlining conditions for repayment to avoid invoking the bank guarantee.
Issues: Whether the petitioner should be granted further time to clear outstanding dues under the bank guarantee invocation attempt despite previous defaults.
Ratio Decidendi: The court determined that in light of financial adversity, granting reasonable time is appropriate while maintaining the enforceability of the contractual obligations.
Final Decision: Writ petition disposed; petitioner granted time to pay dues and abide by terms.
J U D G M E N T
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Petitioner has been awarded the licence for Vehicle Parking Fee Collection Rights at the International Terminal at Trivandrum International Airport by respondents 1 and 2 on 6.8.2015, evident from Ext.P2. Similarly the licence for Trolley Retrieval and Maintenance work was also awarded to the petitioner as per Ext.P4. The period of licence is three years with effect from the date of award. Petitioner has furnished bank guarantee for Rs.3,36,35,369/- as per Exts.P3, P3(a) and P5 from the 4th respondent bank. The monthly licence fee would come to more than Rs.55 lakhs. According to the petitioner, since, the date of award of contract, the petitioner company has been remitting the licence fee without default. However, from September 2016 onwards there was default and the arrears as of now demanded as per Ext.P7 is Rs.3,37,69,535/- and the respondents are attempting to invoke the bank guarantee. It is in this background challenging the attempt of the respondents to invoke the bank guarantee, this writ petition is filed by the petitioner.
2. Heard learned counsel for the petitioner, learned Standing Counsel and perused the documents on record and pleadings put forth by the petitioner.
3. Learned counsel for the petitioner reiterated the contentions raised in the writ petition. According to the learned counsel the amounts could not be paid by the petitioner due to the adverse financial economic situations prevailing in the community. The amount is not disputed, but the petitioner seeks reasonable time to pay off the amounts due to the respondents and offered to pay an amount of Rs.50 lakhs within five days from today, the same is recorded.
4. Taking note of the respective submissions made across the bar, I think it is only appropriate that reasonable time is provided to the petitioner. Therefore, petitioner is granted time to clear of the liability on or before 31.03.2017. Petitioner shall make the payment remaining due after the payment of Rs.50 lakhs as undertaken and noted above in three equated monthly instalments starting from January and ending up on 31.03.2017. Needless to say, if any of the instalments is defaulted the respondents will be at liberty to resurrect the action initiated against the petitioner and recover the amount in lump. It is also made clear that petitioner has to abide by the agreement terms and conditions.
Writ petition is disposed as above.
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