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IN THE HIGH COURT OF JUDICATURE AT MADRAS (ORDINARY ORIGINAL CIVIL JURISDICTION) FRIDAY THE 17TH DAY OF SEPTEMBER 2021 THE HON'BLE MR.JUSTICE N.SATHISH KUMAR O.P.NO.411 OF 2018 In the matter of Arbitration and Conciliation Act 1996 And In the matter of Dispute Between:
International Aviation Academy (P)Ltd., Represented by its Chief Executive Officer, Mr.Kannan Ay And The Airports Authority of India Represented by its chairman and two others Between International Aviation Academy (P) Ltd., Rep. by its Chief Executive Officer, Mr.Kannan No.60, III Floor, Jai Durga Complex, Ashok Nagar First Avenue, Ashok Nagar, Chennai – 600 083. ...Petitioner Vs
1. Airports Authority of India, Rep. by its Chairman, Rajiv Gandhi Bhavan, Safdarjung Airport, New Delhi. 2. Regional Executive Director, Southern Region, Airports Authority of India, Chennai Airport, Chennai – 600 027.
3. Airport Director,
Salem Airport, Salem – 636 309. ...Respondents Original Petition praying that this Hon'ble Court be pleased to set aside the award dated 01.07.2017 & 08.11.2017 passed by the Hon'ble Sole Arbitrator and pass an order allowing all the claims of the Petitioner/Claimant and any other order as deemed fit by this Hon'ble court and thus render justice.
This Original Petition along with O.P.No.662 of 2018 having been heard on 03.09.2021 in the presence of Mr.I.Jayasingh Manoharan, advocate for the petitioner herein and Mr.V.Ramesh, advocate for the respondents herein and upon reading the petition and the award dated 01.07.2017 filed herein and having stood over for consideration till this date and coming on this day before this court for orders in the presence of the said advocates for the parties hereto and this court having observed that the fact remains that the Aircraft Act and the Airports Authority of India Act operate in different field and the power of the Airports Authority is wide, the very contract itself clearly shows that at the time of entering contract the person who participates in the tender must have the basic infrastructure and such being the position the contention that the contract itself is violation of the Aircraft Act is not sustainable and it is ordered:-
That the O.P.No.411 of 2018 be and is hereby dismissed.
WITNESS THE HON'BLE MR. JUSTICE SANJIB BANERJEE, CHIEF JUSTICE, HIGH COURT AT MADRAS AFORESAID, THIS THE 17TH DAY OF SEPTEMBER 2021.
Sd./-
ASSISTANT REGISTRAR (O.S. II)
//Certified to be true copy//
Dated at Madras this the day of 2021.
COURT OFFICER(O.S.)
From 25th Day of September 2008 the Registry is issuing certified copies of the Orders/Judgments.
VSP
22/10/2021 O.P.No.411 of 2018 ORDER DATED :17.09.2021 THE HON'BLE MR. JUSTICE N.SATHISH KUMAR FOR APPROVAL:09.11.2021 APPROVED ON:09.11.2021 THE HIGH COURT OF JUDICATURE AT MADRAS Reserved on Delivered on 03~09~2021 17-09~2021 CORAM:
THE HONOURABLE MR.JUSTICE N. SATHISH KUMAR O.P. Nos.411 and 662 of 2018 O.P.No.411 of 2018 International Aviation Academy (P) Ltd., Rep.by its Chief Executive Officer, Mr.Kannan No.60, III Floor, Jai Durga Complex Ashok Nagar First Avenue, Ashok Nagar, Chennai 600083. ...Petitioner / Claimant -Vs-
1.Airports Authority of India, Rep. By its Chairman, Rajiv Gandhi Bhavan Safdarjung Airport, New Delhi.
2.Regional Executive Director, Southern Region, Airports Authority of India Chennai Airport, Chennai 600027
3.Airport Director Airports Authority of India Salem Airport, Salem 636309 ...Respondents / Respondents O.P.No.662 of 2018
1.Airports Authority of India, Rep. By its Chairman, Rajiv Gandhi Bhavan Safdarjung Airport, New Delhi.
2.Regional Executive Director, Southern Region, Airports Authority of India Chennai Airport, Chennai 600027
3.Airport Director Airports Authority of India Salem Airport, Salem 636309. ...Petitioners/Respondents -Vs-
International Aviation Academy (P) Ltd., No.60, III Floor, Jai Durga Complex Ashok Nagar First Avenue, Ashok Nagar, Chennai 600083. ...Respondent / Claimant Prayer in O.P.No.411 of 2018: Petition filed under Section 34 of the Arbitration and Conciliation Act, 1996, to set aside the Award dated 01.07.2017 passed by the Sole Arbitrator and pass an order allowing all the claims of the Petitioner/Claimant.
Prayer in O.P.No.662 of 2018: Petition filed under Section 34 of the Arbitration and Conciliation Act, 1996, to set aside the Award dated 01.07.2017 by allowing the Counter Claim of the Petitioner/Respondent.
For Petitioner : Mr. I. Jayasingh Manoharan in O.P.411/2018 and Respondent in O.P.662/2018 For Respondents : Mr. V. Ramesh in O.P.411/2018 in O.P.662/2018
C O M M O N O R D E R
1.(a) Two Original Petitions are filed Challenging the Arbitral Award passed by the learned sole Arbitrator dated 01.07.2017.
1.(b) O.P.No.411 of 2018 has been filed by the Claimant to set aside the Award and to allow his Claim Statement.
1.(c) O.P.No.662 of 2018 has been filed by the Respondents before the Arbitral proceedings to set aside the Award and allow their Counter Claim.
1.(d) The parties are arrayed as per their own rankings before the Arbitral Tribunal. The Petitioner who filed O.P.No.411 of 2018 is referred as Claimant herein and the Petitioners who filed O.P.No.662 of
2018 is referred as Respondents for the convenience sake.
1.(3) Since both the Petitions are arising out of the same award, they are disposed by way of this Common Order.
2. The brief facts leading to file these Original Petitions are as follows:
2.(a) The 1st Respondent called for Tenders from the private agencies, possessing basic infrastructure and having a financial Net Worth of Rs.3 Crores, for setting up of Flying School, at 28 Airports, including Salem Airport functioning under the 1st Respondent. The Claimant participated in the tender along with others and the Claimant was declared as successful bidder for one of the two sites at Salem Airport. The 1st Respondent conveyed the same to the Claimant the formal Approval of the Allotment of land, for setting up a Flying School at Salem, by letter dated 21.12.2008. In the letter dated 23.03.2009, the 3rd Respondent conveyed the details of the allotment of land to the Claimant. It is also imposed a restriction that the covered area of the plot should be only 50% of the Plot area, i.e., 3750/2 = 1875 Sq.M. The allotment was for the period of 5 years from the date of handing over the site and it was extendable for further 5 years and then for another 5 years as mutually agreed Terms and Conditions. The License fee shall be at Rs.350/- per Sq.ft.per annum with effect from 01.04.2008 with annual Compound Escalation @ 7.5% on the 1st April every year. The rates of License Fee and Escalation shall be decided by the Respondents from time to time. The Claimant was to pay the Annual License Fee, in advance, every year for the first year same was to be paid within 15 days from the date of Allotment Letter. Apart from the said License Fee, Claimant was to pay the Royalty on gross Turnover or minimum Royalty as mentioned in NIT. The Claimant has to submit a Security Deposit of Rs.20,00,000/-. Adjusting the EMD amount for Rs.5,00,000/- paid along with Tender, the Claimant was asked to give FDR or Bank Guarantee for the balance of Rs.15,00,000/- towards Security Deposit. The Claimant paid License Fee for the year, in advance, Royalty for one year on the projected Gross Turn Over and the balance Security Deposit.
2.(b) On inspection, the Claimant found that about 2100 Sq.M.of land was unusable. After the 3rd Party inspection, the area allotted to the Claimant was brought down to 4062 Sq.M. Though the Claimant was informed that it could take up the original extent of 6138.75 Sq.M. itself, the Claimant was finally allotted to with a land measuring 5689 Sq.M on 22.06.2009. The drawing submitted by the Claimant was approved by the 1st Respondent on 30.09.2009. As there was a delay caused by the Respondent, Claimant could not get approval/license from Director General of Civil Aviation (DGCA)for more than two years. NoC was issued by DGCA, which delayed the project by another three months.
2.(c) In the meanwhile DGCA introduced “Civil Aviation Rule-M”
for Organisation Approval and the documents submitted by the Claimant were returned. The Claimant submitted new set of documents and final approval to the Claimant was granted on 12.04.2011, though the Award letter has been issued on 23.03.2009. Hence, the Student Enrolments and actual First Flying activity could only begin in March 2012 by the Claimant, due to various delay attributable to the Respondents and the DGCA. Suddenly, the 3rd Respondent encashe
