OMP (I) 28/2015 Page 1 of 25

IN THE HIGH COURT OF DELHI AT NEW DELHI

Judgment Reserved on: 22^nd May, 2015

Judgment Pronounced on: 29^th May, 2015

OMP (I) 28/2015

M/S AIRWORTH TRAVEL & TOURS PVT. LTD.

.... Petitioner

Through:

Mr. Dhruv Mehta, Sr. Adv. with

Mr. Saket Sikri, Ms. Ekta Kalra

Sikri, Mr. Vikalp Mudgal & Mr.

Aditya Sikka, Advs.

versus

INTERNATIONAL AIR TRANSPORT ASSOCIATION

.... Respondent

Through:

Mr. Gopal Jain, Sr. Adv. with Ms.

Meenakshi Sood & Mr. Vidur Bhatia,

Advs.

CORAM:

HON'BLE MR. JUSTICE P.S.TEJI

P.S.TEJI, J.

1.

By this order, I shall dispose of the application/petition under Section

9 of the Arbitration and Conciliation Act, 1996 filed with the prayer

to restrain the respondent from invoking Bank Guarantee dated

24.12.2012 amounting Rs.4.10 crores, insurance cover amounting to

Rs.14,28,72,000/- and directing the respondent to revoke the notice

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OMP (I) 28/2015 Page 2 of 25

of default dated 16.02.2015.

2.

In the petition, it is averred that the petitioner is a private limited

company incorporated under the Companies Act and is in the

business of organising tour and travels. Mrs. Sonila Mehra,

Authorized Representative of the petitioner has been duly authorized

to present the present petition vide Board Resolution dated

17.02.2015. The respondent is a trade association for the world‟s

airlines representing 250 airlines and 84% of total air traffic and is

engaged in the operation of accreditation of Travel Agencies around

the world. The respondent issued a Travel Agent‟s Handbook

(Resolution 818g Edition) which governs the relation between the

petitioner and respondent. On 14.05.2007, parties entered into an

agreement whereby the petitioner was appointed as an agent for

selling the passenger air tickets. As per Clause 14 of the Agreement,

any matter reviewed by arbitration pursuant to Service Agency Rules

shall be submitted to arbitration.

3.

It is further averred in the petition that the petitioner company was

allotted IATA code bearing No.14-3-6687-0. Sub-agent of the

petitioner, namely, M/s Easy Trip Travels Pvt. Ltd. had been

purchasing tickets through the petitioner since November, 2012. A

bank guarantee bearing No.543/LG/12913 was issued by the

petitioner in lieu of prospective default. During the period

23.01.2015 to 31.01.2015, the sub-agent had purchased tickets worth

Rs.11.22 crores, whereas the petitioner purchased tickets worth

Rs.60 lakhs. The respondent had raised a demand of

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OMP (I) 28/2015 Page 3 of 25

Rs.11,80,40,844/- which was payable on 11.02.2015. The petitioner

had issued a cheque bearing No.401892 dated 09.02.2015 amounting

to Rs.11,80,40,844/-, however the sub-agent did not remit its part of

dues amounting to Rs.11.22 crores and had raised a frivolous dispute

vide suit bearing CS(OS) No.406/2015. When the petitioner did not

receive payment from the sub-agents, the petitioner immediately

intimated to the Airlines and IATA for cancellation of those tickets

for which money was not received from sub-agents. The petitioner

cancelled/refunded tickets for Rs.1.50 crores. However, the Airlines

stopped cancelling the tickets despite e-mails dated 13.02.2015 and

14.02.2015, which resulted in non-payment to IATA by the

petitioner. There was no default on the part of the petitioner as it had

taken every step to get the tickets cancelled, but the Airlines did not

cancel the tickets. On 11.02.2015, the website link of the petitioner

had been closed/shut down by the respondent.

4.

On 12.02.2015, a notice was issued to the petitioner for non-payment

of dues which was replied