Madras High Court
Hindustan Engineering Institute ... vs The Union Of India on 17 September, 2008
Author: A. Kulasekaran
Bench: A. Kulasekaran
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 17.09.2008 CORAM : THE HONOURABLE MR.JUSTICE A. KULASEKARAN W.P. No. 23809 of 2007 W.P. Nos. 12577 and 13367 of 2008 -o- WP No. 23809 of 2007 Hindustan Engineering Institute Centre rep. By its Director Anand Jacob Verghese 40, G.S.T. Road, St. Thomas Mount .. Petitioner Chennai 600 016 Versus 1. The Union of India rep. By Secretary to Government Ministry of Civil Aviation Rajiv Gandhi Bhavan New Delhi 110 003 2. The Airports Authority of India rep. by its Chairman Rajiv Gandhi Bhavan New Delhi 3. The Regional Executive Director (SR) Airports Authority of India Chennai Airport Chennai 600 027 4. The Manager (ATC) Airports Authority of India Pondicherry Airport Pondicherry 605 008 5. The Director General of Civil Aviation Rajiv Gandhi Bhavan New Delhi .. Respondents WP No. 12577 of 2008 Hindustan Engineering Institute Centre rep. By its Director Anand Jacob Verghese 40, G.S.T. Road St. Thomas Mount Chennai 600 016 .. Petitioner Versus 1. The Union of India rep. By Secretary to Government Ministry of Civil Aviation Rajiv Gandhi Bhavan New Delhi 110 003 2. The Airports Authority of India rep. by its Chairman Rajiv Gandhi Bhavan New Delhi 3. The Regional Executive Director (SR) Airports Authority of India Chennai Airport Chennai 600 027 4. The Manager (ATC) Airports Authority of India Pondicherry Airport Pondicherry 605 008 5. The Director General of Civil Aviation Rajiv Gandhi Bhavan New Delhi 6. M/s. Montis Aviation Academy AJ-70, AJ 3rd Street, 9th Main Road Anna Nagar West Chennai 600 040 .. Respondents WP No. 13367 of 2008 Hindustan Engineering Institute Centre rep. By its Director Anand Jacob Verghese 40, G.S.T. Road, St. Thomas Mount .. Petitioner Chennai 600 016 Versus 1. The Union of India rep. By Secretary to Government Ministry of Civil Aviation Rajiv Gandhi Bhavan New Delhi 110 003 2. The Airports Authority of India rep. by its Chairman Rajiv Gandhi Bhavan New Delhi 3. The Regional Executive Director (SR) Airports Authority of India Chennai Airport, Chennai 600 027 4. The Senior Manager (ATC) Airports Authority of India Pondicherry Airport Pondicherry 605 008 5. The Director General of Civil Aviation Rajiv Gandhi Bhavan New Delhi .. Respondents WP No. 23809 of 2007: Petition filed under Article 226 of The Constitution of India praying for a Writ of Mandamus directing the second respondent to renew the license granted to the petitioner at Civil Aerodrome Pondicherry measuring approximately 33.5m X 35m as shown in the sketch annexed to the license dated 28.10.1994. WP No. 12577 of 2008: Petition filed under Article 226 of The Constitution of India praying for a Writ of Certiorari calling for the records relating to the impugned proceeding of the second respondent calling for invitation of expression of interest for setting up of flying schools/aircraft maintenance workshops at various airports in India as published in The Hindu newspaper dated 17.03.2007, and all further proceedings such as calling for financial bids and short listing the successful bidders, quash the same. WP No. 13367 of 2008: Petition filed under Article 226 of The Constitution of India praying for a Writ of Certiorari calling for the records relating to the impugned proceeding of the fourth respondent in AAI/PC/OPS/2008-09 dated 30.05.2008, quash the same. For Petitioner : Mr. V. Selvaraj in all the Writ Petition For Respondents : Mr. M. Ravindran Additional Solicitor General for Mr. B. Damodaran for RR1 & 5 in all the Writ Petition COMMON ORDER
In all these three cases, the parties are one and the same except one difference namely in WP No. 12577 of 2008, apart from other respondents, the 6th respondent is added and the issues involved are also more or less identical, hence, they are disposed of by this common order.
2. In WP No. 23809 of 2007, the petitioner seeks for a Writ of Mandamus directing the second respondent to renew the license granted to the petitioner at Civil Aerodrome Pondicherry measuring approximately 33.5m X 35m as shown in the sketch annexed to the license dated 28.10.1994.
3. In WP No. 12577 of 2008, petitioner seeks for quashing the proceedings of the second respondent inviting expression of interest for setting up flying schools /aircrafts maintenance workshops at various airports in India as published in the Hindu English Newspaper dated 17.03.2007.
4. WP No. 13367 of 2008 has been filed seeking for quashing of the proceedings of the fourth respondent in AAI/PC/OPS/2008-09 dated 30.05.2008.
5. The third respondent has filed counter affidavit in WP No.13367 of 2008 on 30.06.2008.
6. The fourth respondent has filed counter affidavit in MP No. 2 of 2008 in WP No. 23809 of 2007 on 12.04.2008; MP No. 1 of 2007 in WP No. 23809 of 2007 was filed to vacate the interim order dated 21.07.2007; additional affidavit in WP No. 23809 of 2007 on 28.04.2008 and counter affidavit in WP No. 12577 of 2008 on 05.06.2008.
7. The respondents 1 and 5 have filed counter affidavit in WP No. 23809 of 2007 on 12.05.2008; better counter affidavit in WP No. 23809 of 2007 on 15.05.2008; better counter affidavit in WP No. 23809 of 2007 on 15.07.2008; counter affidavit in WP No. 12577 of 2008 dated Nil June 2008; better counter affidavit in WP No. 12577 of 2008 on 15.06.2008 and better affidavit in WP No. 12577 of 2008 on 15.07.2008.
8. The learned counsel appearing for the petitioner submitted as follows:-
The petitioner is a society registered under the Societies Registration Act, established several educational institutions namely Hindustan College of Engineering, Hindustan College of Arts and Science, Hindustan Institute of Engineering and Technology etc., The petitioner also started Orient Flight School, hereinafter called as Petitioner School, in the year 1994 after obtaining necessary license from the second respondent. On 28.10.1994 the fourth respondent also granted 1171.5 Sq. Meters of land in the Pondicherry Airport by way of license for a period of five years ending with 27.10.1999 for parking the aircrafts inside the Hanger and also to carry out the aircraft maintenance work besides setting of training classes for students. On 20.07.1995, an agreement/license for construction of temporary building/structure or installation was granted to the petitioner school to put up structures in the premises on payment of license fee of Rs.220/- per sq.meter with 10% escalation every year. The petitioner sought for renewal of license but the second respondent directed the petitioner school to continue as licensee without renewing the license, however they received the annual rent with 10% escalation every year. On 29.11.2004, the petitioner school requested the authorities to renew the license for which the fourth respondent sent a letter calling upon the petitioner to vacate and handover possession of the premises within 30 days. On 16.07.2005, 18.07.2005, 21.07.2005 and 13.08.2005, the petitioner sent letters to the respondents seeking to renew the license of the petitioner school otherwise the training of the students of the petitioner school will be paralised and their future will be jeopardised. In the meanwhile, the petitioner sought permission to import 4 single piston Engine Cessna 172 Aircrafts for imparting flight training for which a letter was received from the second respondent stating that the hanger space allotted at Pondicherry could not accommodate additional aircrafts and that already eviction notice to vacate the hanger had been issued by the fourth respondent. On 13.10.2005 and 25.03.2006, letters were sent to the fourth respondent and third respondent respectively by the petitioner requesting for renewal of license. On 23.05.2006, the fourth respondent sent a letter requesting the petitioner to pay Rs.50,00,000/- towards continued occupation of the hanger, which was also duly remitted by the petitioner. On 29.05.2006, a letter was received from the first respondent granting permission to import Cessna 172 Aircrafts, however, directed the petitioner to approach the fifth respondent. On 26.06.2006, a letter was received from the second respondent informing the petitioner that damages would be claimed for continued occupation of the premises as determined by the competent authority which was opposed by the petitioner on the ground that the demand for payment of damages and royalty is not justifiable. Thereafter, the second respondent invited tenders by giving publication in The Hindu newspaper dated 17.03.2007 for setting up a flying school at Pondicherry Airport with condition that the successful bidder has to establish the flying school within 12 months. Though the petitioner has challenged the said tender by filing W.P. No. 12577 of 2008, they participated in the tender in which one M/s. Montis Aviation Academy has offered Rs.18,37,50,000/- and the petitioner offered Rs.9,76,80,000/- and the petitioner was called upon to match the offer made by H1 namely M/s. Montis Aviation Academy but the same was not agreed upon by them. On 15.06.2007, the second respondent arbitrarily directed the petitioner to give an undertaking that if the petitioner is not successful in the proposed tender for flying schools at Pondicherry, they have to vacate the premises. The fourth respondent has also sent a letter dated 30.05.2008 to the petitioner stating that the airfield would be closed on 04.06.2008 for undertaking airport expansion, runway extension/strengthening; that the airports authority of India has been established by the Airports Authority of India Act, 1994; that Section 12-A of the Act empowers the authoriity to license the premises of an airport; that airports authority of India has been established to provide for betterment of civil aviation, including establishment of aviation school centers for training of pilots, establishment of training institutions and workshops, whereas Airports Authority of India has not proposed to establish any training institution and workshop on its own on the other hand it invited tenders for setting up of flying schools at Pondicherry Airport by private operators; that the tender documents shows that Airports Authority of India is only interested in making profit and not interested in protecting the training institutions which are already in existence; that the flying school established by the petitioner caters to the needs of students from Tamil Nadu, Kerala and Pondicherry by charging minimum fees; that the petitioner school is having necessary aircrafts, reference books, audio and video VCDs and DVDs; that airports authority of India failed to consider the request of the petitioner for renewal of license without any valid evidence; that if the petitioner school is closed, more than 100 students, who are undergoing training at various stages will be put to irreparable loss; that under Section 12 A (2) of the Act, the Airports Authority of India cannot lease the airport without previous approval of the Central Government, whereas, in this case, the second respondent invited tenders by issuing notification dated 17.03.2007 without obtaining prior permission from the first respondent, hence, the same is invalid; that the fourth respondent, in its communication dated 30.05.2008 threatened to close the airfield under the pretext of airport expansion, runway extension/strengthening; that the length and breadth can be increased without closing the airfield, hence, the impugned communication dated 30.05.2008 was issued to paralyse the petitioner's institution. The respondents without taking note of the petitioner's experience in the field of imparting training of pilots and the infrastructure provided by it, arbitrarily refused to renew the licence. In the said circumstance, WP No. 23809 of 2007 was filed by the petitioner on 11.07.2007 seeking for renewal of the license; W.P.No. 12577 of 2008 was filed on 19.05.2008 seeking to quash the tender notification dated 17.03.2007 and W.P. No. 13367 of 2008 was filed on 02.06.2008 to quash the proceedings of the fourth respondent dated 30.05.2008 and prayed for allowing all the writ petitions. In support of his contention, the learned counsel for the petitioner relied on the below mentioned decisions:-
i) (M. Pentiah and others vs. Muddala Veeramallappa and others) AIR 1961 SC 1107
ii) (Dr. H.S. Rikhy and others vs. The New Delhi Municipal Committee) 1962 SCR 604
iii) (Bhikraj Jaipuria vs. Union of India) AIR 1962 Supreme Court 113
iv) (Haridwar Singh vs. Begun Sumbrui and others) AIR 1972 Supreme Court 1242
v) (Indian Administrative Service (SCS) Association, UP and others vs. Union of India and others) 1993 Supp (1) Supreme Court Cases 730
9. Mr. M. Ravindran, learned Additional Solicitor General of India appearing for the respondents 1 to 5 submitted as follows:-
The petitioner approached the fifth respondent by sending a letter dated 03.03.1993 to grant approval for starting a flying school which was accorded vide letter No.AV22011/1/87FG dated 03.03.1993, thereafter, the petitioner obtained permission from the fifth respondent and again approached the third respondent for allotment of land for construction of hanger by their letter dated 16.03.1994, which was forwarded to the second respondent and the same was placed before the National Airports Authority Board for consideration, which also approved the proposal and conveyed it to the third respondent with a direction to allot actual area required for the purpose vide their letter dated 27.10.1994; that the third respondent, in their letter dated 26.12.1994 directed the fourth respondent to allot 35.00 X 33.5 meters of land to the petitioner at Pondicherry Airport and the fourth respondent, by their letter dated 28.10.1994 allotted land to the petitioner for a period of five years from 28.10.1994 and an agreement was also executed to that effect on 20.07.1995; that the petitioner while constructing hanger encroached 51.12 sq.meter of land over and above the land allotted to them and the fourth respondent issued a notice dated 12.01.1996 to the petitioner to stop the construction activities; that the petitioner, in their letter dated 07.12.1995 had pleaded for allotment of encroached area as additional area allotted to them; that the respondents have considered the petitioner's request in the interest of trainees and regularised the unauthorised occupation by their letter dated 25.04.1996; that the license granted to the petitioner expired on 28.10.1999 and on application for renewal made by the petitioner, the same was renewed for a further period of five years ending with 27.10.2004 with revised rate of license fee for the extended period; that the petitioner, in their letter dated 29.11.2004 requested the fourth respondent to renew the license for further period of five years, but the fourth respondent, in his letter dated 06.07.2005 informed the petitioner that the request of renewal is not accepted and directed the petitioner to vacate the premises within 30 days which is not challenged, however, the petitioner did not vacate, hence, the respondents informed the petitioner that it is liable to pay damages; that no bill for license fee was raised by the respondents and the petitioner was directed to deposit Rs.50 lakhs towards damages and the same would be adjusted after the competent authority quantified under the said heading; that the petitioner remitted Rs.20 lakhs on 05.05.2006 and after persuasion, remitted another Rs.30 lakhs on 08.06.2007; that the petitioner is liable to pay damages as per the existing Rules for their unauthorised occupation; that in the meantime, the second respondent has called for invitation of expression of interest for setting up of flying school/aircraft maintenance workshop at various airports in India, including Pondicherry Airport, which was published in The Hindu dated 17.03.2007 in which the petitioner also participated; that the petitioner has applied for permission to take a container containing two dismantled Cessna aircrafts to the hangers on a specific undertaking dated 15.06.2007 that in the event of the petitioner not being successful in the tender for flying school for pondicherry airport, they would vacate the premises; that the petitioner's tender was considered along with 29 tenderers; that the petitioner is one among the four tenderers shortlisted for submitting the financial bids; that two sites have been identified for setting up of two flying school at Pondicherry airport and the highest bidder would be offered one of the two sites and the second site would be offered to the second highest tenderer subject to the condition to match the bid of H1; that the petitioner was informed through the letter of the fourth respondent dated 09.01.2008 to give his willingness as to whether they could match the offer of H1, but the petitioner has not responded properly; that in view of the interim order dated 21.07.2007 granted by this Court in MP No. 1 of 2007 in WP No. 23809 of 2007, the respondents are unable to invite the H1 to select the site of their choice; that the respondents inadvertently mentioned in some of their communication, the tender notification and counter the transaction between the petitioner and the respondents as lease instead of license, hence, the additional counter affidavit dated 15.07.2008 was filed by them to the effect that they wrongly mentioned as 'lessee' in the earlier counter instead of 'licensee' and prayed to read it as 'licensee'; that Corrigendum dated 17.07.2008 was hosted in the website to that effect; that under Section 11 of the Act, the Airports Authority of India shall act on business principles in discharge of its functions under the Act; that Section 20 empowers the authority to enter into and perform and contract necessary for the discharge of its functions under the Act subject to the provisions of Section 21; that Section 21 deals with the mode of execution of contract and it empowers the authority to enter into contract by its Chairperson or such other member of such officer of the authority; that prior approval of Central Government is required in respect of any contract for acquisition or sale of immovable property or for lease of property if the contract period is more than 30 years; that in compliance of the above said provisions, the Government also framed regulations for classification of the contracts and regulation 2 of the AAI (Contract) Regulation 2003 clearly elucidates three classes of contracts wherein clause 2 (b) clearly deals on contracts which can be executed with the approval of the authority; that it is clear from the reading of the above provision that the authority is empowered to enter into lease of its property upto 30 years; that Section 12 (A) (2) of the Act is not applicable to the case on hand; that approval of Central Government is mandatory only when the Airports Authority leases out the property to carry out the functions defined under Section 12 of the Act and setting up flying schools are not part of the functions as enumerated under Section 12 of the Act; that flying schools are meant to train pilots, who operate the aircrafts, so it relates to Airline's function whereas the respondents are managing the airports and providing Air Traffic Control and air navigational supports to the pilots who fly the aircrafts; that the respondents have established various training institutes and services under Section 12 (3) (d) and (q) of the Act and flying schools are not covered under the Act; that the advertisement dated 17.03.2007 is purely commercial and it is meant for generating income for the sustained growth of the authority; that the petitioner cannot take shelter under Section 12 (A) of the Act; that a Memorandum of Understanding was signed between the Airports Authority of India and State Government of Puducherry for expansion of Puducherry Airport; that as per the memorandum of understanding, the Puducherry government agreed to give 261 acres of additional land at their cost to the Airports Authority of India, at the first stage, in addition to existing 120 acres of land and the Airports Authority of India shall extend the length and width of the existing runway and the apron etc., and also connect terminal buildings and other buildings to facilitate ATR 72 operation at the initial stage and bigger aircrafts later on; that the Puducherry Government had already acquired 50 acres of land and handed over the same to the Airports Authority of India for the purpose of expanding the airport; that the acquisition proceedings in respect of adjoining 211 acres of land lying in the State of Tamil Nadu is also in progress; that Airports Authority of India also prepared a master plan and got it approved and floated tender for the work of expansion and strengthening of the runway at Pondicherry Airport; that the tenders were opened on 14.02.2008 and the work was awarded on 07.03.2008 to successful bidder namely M/s. Vishal Infrastructures Limited for a bid amount of Rs.19,77,45,342.30; that as per the terms and conditions of the work order, the contractor has to complete the work within six months from the 10th day after issuance of work order and complete it on or before 16.09.2008 but because of the delay, the work commenced only on 19.04.2008; that since the petitioner's institution is located in middle of the project site, the respondents are unable to proceed with the project work effectively; that without closing the airfield, strengthening/expansion of runway is not possible, particularly in a small airport like Pondicherry Airport; that the fourth respondent sent a communication dated 30.05.2008 stating that air field would be closed for undertaking airport expansion, runway extension/ strengthening; that the petitioner, without challenging the order of refusal of extension of lease challenged only the order dated 30.05.2008 in WP No. 13367/2008; that the petitioner has been running the institute by collecting exorbitant fee from the students; that the respondents 2 to 4 being public sector undertakings cannot favour the petitioner alone, hence, they have rightly called for tender for setting up flying schools at various airports; that the petitioner has also participated in the tender and he was placed H2 and the petitioner was also called upon to match the offer made by H1, hence, WP No. 23809 of 2007 praying for renewal of license, WP No. 12577 of 2008 seeking to quash the tender notification dated 17.03.2007 and WP No. 13367 of 2008 seeking to quash the intimation dated 30.05.2008 for closing of airport are liable to be dismissed as untenable in law; that under Section 12 (q) of the Act, Airports Authority of India has power to establish training institute and workshop but they are for training of staff employed by the Airport Authority of India; that no approval under Section 12A of the Act is required for calling tenders to grant license for five years to establish flying schools and prayed for dismissal of all the writ petitions.
10. The arguments of both sides were considered and records produced by them were perused. The petitioner was granted license dated 28.10.1994 for construction of temporary building, structure or installations in the lands approximately measuring 33.5m X 35m at the Civil Aerodrome at Pondicherry for five years between 28.10.1994 and 27.10.1999. The petitioner and the second respondent entered into an agreement dated 28.07.1995. In and by the terms of the agreement, at the expiration of the said period, license could be renewed at the option of the Chairman of the second respondent for such period and upon such terms and conditions as the Chairman of the second respondent thinks fit and proper. The petitioner, while constructing the hanger encroached 51.12 sq.m. Of land over and above the land allotted to it, hence, the fourth respondent has sent a letter dated 12.01.1996 to the petitioner to stop the construction, however, the petitioner, in their letter dated 07.12.1995 pleaded for allotment of the said land, which was also granted by the respondents. At the expiry of five years, the petitioner submitted an application for renewal of license for further period of five years ending with 27.10.2004, which was also granted by the respondents. After expiry of second five years, the petitioner, in their letter dated 29.11.2004 requested the respondents to renew the license for further period from 27.10.2004 to 26.10.2009, which was rejected by the second respondent by their letter dated 06.07.2005 and called upon them to vacate the premises within 30 days from the date of receipt of the letter. The letter dated 06.07.2005 of the second respondent is extracted hereunder:-
"Please refer your letter dated 29.11.2004 Your request for renewal is not accepted by the competent authority.
As the license has already expired (on 27.10.2004) you are requested to vacate the premises and handover the vacant land to AAI within 30 days from the date of receipt of this letter.
You are also requested to clear all the outstanding dues immediately.
Please acknowledge receipt of the letter."
The said order dated 06.07.2005 of the second respondent was not challenged by the petitioner.
11. On 23.09.2005, the first respondent has passed an order rejecting the permission sought for by the petitioner to import 4 single piston cessna 172 aircrafts for imparting flying training and other allied service, on the ground that the fourth respondent has directed them to vacate the hanger at the Pondicherry airport, but they did not vacate. Thereafter, the second respondent, in their communication dated 23.05.2006, called upon the petitioner to deposit Rs.50 lakhs for their occupation beyond 27.10.2004, towards damages and the same was also paid by the petitioner, of course on various dates. In the meantime, the second respondent felt that due to open sky policy and liberalisation resulted in new airlines participation, which ultimatedly increased the demand for trained commercial pilots and aircraft engineers necessiated to establish more flying schools and aircraft maintenance, consequently invited 'expression of interest' (EOI) for setting up of flying schools, aircraft maintenance workshop at various airports and published the tender notification in The Hindu newspaper dated 17.03.2007. In the said notification, it is made clear that license would be issued for five years for setting up flying school, aircraft maintenance etc., The petitioner submitted their EOI on 21.03.2007, however, requested the respondents to modify para No.6 of the tender relating to eligibility criteria, but the fact remains the same was not granted. The said condition NO.6 is as follows:-
"6. Those private flying clubs on AAI land whose license has expired and those whose license is still valid may be allowed to take part in the tender. However, in the event of their not being successful in the tender they have to vacate the existing premises and handover the same to AAI"
12. The petitioner, in their letter dated 08.06.2007 sought for renewal of license as well as permision to park the two dismantled aircrafts. On 15.06.2007, the second respondent sent a reply permitting to park the said dismantled aircraft 2 Nos. inside the airport, pending finalisation of the tenders subject to certain conditions namely (i) There are no outstanding dues and (ii) a clear undertaking be furnished by the petitioner to the effect that in the event of their not being successful in the tender for flying schools for Pondicherry airport, the petitioner shall vacate the premises and handover to the second respondent without any protest after settlement of all payment as demanded by the second respondent by way of adjustment of the damages/security deposit of Rs.50 lakhs, however, without prejudice to the rights and remedies of the second respondent to resume possession of the land from the petitioner. On 15.06.2007 itself, the petitioner has sent a letter of undertaking as required by the respondents, as follows:-
"With reference to your letter No.AAI/SR/M/12(26) (OFS)/LM/dated 15.06.2007, in order to take two number dismantled aircraft in the container to OFS Hanger, we hereby give the undertaking as per para 2 (ii) of the letter that in the event of OFS not being successful in the tender for flying school for Pondicherry Airport, we shall vacate the premises and handover to AAI without any protest after settlement of all payments as demanded by AAI, by way of adjustment of the Security Deposit of Rs.50 lakhs. Further, this is without prejudice to the other rights and remedies of AAI for getting the area vacated..."
13. Thus, the petitioner managed to continue the possession of the lands of Pondicherry Airport beyond 27.10.2004. The petitioner, having participated in the tender invited by the second respondent and agreed to vacate in any by their letter dated 15.06.2007 that in event of their not being successful in the tender invited by the second respondent, suppressed the participation in the tender and filed WP No. 23809 of 2007 on 11.07.2007 seeking for a Writ of Mandamus directing the second respondent to renew the license granted to it. In view of the fact that the petitioner has not challenged the order of rejection of renewal dated 06.07.2005, it is not open to it to seek for a Mandamus to direct the respondents to renew the license, hence, WP No. 23809 of 2007 is liable to be dismissed.
14. Where one person grants, to another or to a definite number of other persons, a right to do or continue to do, in or upon the immovable property of the grantor, something which would, in the absence of such right, be unlawful and such right does not amount to an easement or an interest in the property, the right is called a license. A person continuing in occupation of such premises after revocation of the license is still liable to pay damages for its use and occupation. If at any time such damages had been paid or accepted, it could not undo the effect of the revocation of the license. Followed (1976-4-SCC-119 para-11) wherein it was held as under:-
11. While rejecting the facts of the case the learned Judge of the High Court states a fact in paragraph three of the judgment that the respondent was ordered to deposit in court Rs.29 per month which he did. We are happy to note that the learned Judge has rightly not rested his judgment on this ground of deposit of rent by the respondent. There was nothing to show in the records of this case that the appellants had ever accepted any money either in or outside the Court from the respondent after March 31, 1966 by way of any rent of the licensed premises. A person continuing in occupation of such premises after revocation of the license is still liable to pay compensation or damages for its use and occupation. If at any time such compensation has been paid or accepted, it could not undo the effect of the revocation of the license.
15. It is well settled that licensee has no vested right to seek renewal. In this case, the petitioner is a licensee for a fixed period and its request for renewal beyond 2004 is rejected by the respondents.
16. The petitioner has belatedly filed WP No. 12577 of 2008 on 19.05.2008 seeking to quash the tender notification dated 17.03.2007 on the grounds that the second respondent has no right to 'lease' the premises of the airport without previous approval of the first respondent; the petitioner's existing flying school cannot be compared with new entrants and the tender notification dated 17.03.2007 is against public interest as well as interest of civil aviation. Admittedly, the petitioner participated in the tender and offered Rs.9,76,80,000/- and one Montis Aviation Academy, the sixth respondent in WP No. 12577 of 2008 offered highest amount of Rs.18,37,50,000/-, hence, WP No. 12577 of 2008 is untenable in law. The second respondent, invoking clause No.I, Page Nos. 12 and 13 of the financial bid document called upon the petitioner to match the offer of the said person by their letter dated 09.01.2008, for which the petitioner has not agreed upon. In such event, the petitioner ought to have surrendered possession as per its undertaking dated 15.06.2007, but it deliberately failed. It is also necessary to mention that in the tender documents, of course, the second respondent, without taking due care, in certain places, employed the word 'lease' instead of 'license' but in the vital parts of the tender schedule as well as the format of agreement, it is found mentioned as 'license'.
17. The petitioner, taking advantage of the said mistake took a plea relying on Section 12-A (i) of the Act to say that without the previous approval of the Central Government, the tender notification dated 17.03.2007 was issued. Section 12-A and 21 of the Act runs as follows:-
"12-A. Lease by the authority.-(1) Notwithstanding anything contained in this Act, the Authority may, in the public interest or in the interest of better management of airports, make a lease of the premises of an airport (including buildings and structures thereon and appertaining thereto) to carry out some of its functions under Section 12 as the Authority may deem fit;
Provided that such lease shall not affect the functions of the Authority under Section 12 which relates to air traffic service or watch and ward at airports and civil enclaves (2) No lease under sub-section (1) shall be made without the previous approval of the Central Government (3) Any money, payable by the lessee in terms of the lease made under Sub-section (1) shall form part of the fund of the Authority and shall be credited thereto as if such money is in the receipt of the Authority for all purposes of section 24.
(4) The lessee, who has been assigned any function of the Authority under sub-section (1), shall have all the powers of the Authority necessary for the performance of such function in terms of the lease.
21. Mode of executing contracts on behalf of the Authority.-(1) Every contract shall, on behalf of the Authority, be made by the Chairperson or such other member of such officer of the Authority as may be generally or specially empowered in this behalf by the Authority and such contracts or class of contracts as may be specified in the regulations shall be sealed with the common seal of the Authority;
Provided that no contract exceeding such value or amount as the Central Government may, from time to time, by order, fix in this behalf shall be made unless it has been previously approved by the Authority;
Provided further that no contract for the acquisition or sale of immovable property or for the lease of any such property for a term exceeding thirty years and no other contract exceeding such value or amount as the Central Government may, from time to time, by order fix in this behalf shall be made unless it has been previously approved by the Central Government.
(2) Subject to the provisions of sub-section (1), the form and manner in which any contract shall be made under this Act shall be such as may be specified by regulations (3) No contract which is not in accordance with the provisions of this Act and the regulations shall be binding on the Authority."
18. Section 12-A of the Act relating to lease by the authority. It empowers the authority in the public interest and for better management of airports to lease the premises of an airport to carry out some of its functions under Section 12 of the Act, as the authority may deem fit, provided such lease shall not affect the functions of the authority under Section 12 of the Act, which relates to air traffic service or watch and ward at airports and civil enclaves and no lease under Section 12-A(1) of the Act shall be made without previous approval of the Central Government.
19. Section 21 of the Act relates to mode of executing contract as well as fixing ceiling of the value of the contract and tenure of the contract. The first proviso relating to value of the contract. It is submitted by the learned Additional Solicitor General appearing for the respondents that till date, no ceiling, in terms of money is fixed by the Central Government. The second proviso relating to tenure of contract i.e., if the term exceeds 30 years, prior approval of the Central Government is required. It is an admitted fact that in compliance of Section 21 of the Act, necessary regulations have been framed for classification of the contracts and Regulation 2 of AAI (Contract) Regulation 2003 clearly elucidates three classes of contracts wherein Clause 2 (b) deals with contract, which can be executed without the prior approval of the Government. After filing of the writ petition, the second respondent realised the mistake and rightly issued a corrigendum dated 17.07.2008 correcting the mistake of lease into license. The license originally granted to the petitioner for five years and the impugned tender notification issued for five years were made in exercise of powers conferred under Section 21 as well as Regulation 2 of AAI (Contract) Regulations 2003, for which no prior permission of Government of India is necessary, hence, both are valid. The petitioner having admitted the powers of the respondents in issuing license and subjected itself to the license originally issued and extended and also later participated in the impugned tender, precludes its from going back. For the said reasons, the averments relating thereto made by the petitioner are rejected. The decisions relied on by the learned counsel for the petitioner viz., i) (M. Pentiah and others vs. Muddala Veeramallappa and others) AIR 1961 SC 1107 ii) (Dr. H.S. Rikhy and others vs. The New Delhi Municipal Committee) 1962 SCR 604 iii) (Bhikraj Jaipuria vs. Union of India) AIR 1962 Supreme Court 113 iv) (Haridwar Singh vs. Begun Sumbrui and others) AIR 1972 Supreme Court 1242 v) (Indian Administrative Service (SCS) Association, UP and others vs. Union of India and others) 1993 Supp (1) Supreme Court Cases 730 are not applicable to the facts of this case.
20. The other averment of the petitioner that tender notification is against the public interest and interest of civil aviation is rejected as devoid of merits. Hence, the WP No. 12577 of 2008 is liable to be dismissed.
21. The petitioner claimed that they have existing flying school, hence, they cannot be compared with new entrants. The second respondent, while considering the eligibility of the petitioner and others, who participated in the tender, shortlisted the petitioner, but the petitioner not agreed to match H1. A tender can be rejected in view of inadequacy of prices quoted, however, before rejection, negotiating with all tenderers for realising higher amount is a valid procedure. Similarly, retaining the option to accept the highest tender, if negotiation did not yield a significiantly higher bid is also in public interest. Followed (Food Corporation of India vs. Kamadhenu Cattle Feed Industries) AIR 1993 SC 1601 wherein in Para 10, it was held thus:-
10. From the above, it is clear that even though the highest tenderer can claim no right to have his tender accepted, there being a power while inviting tenders to reject all the tenders, yet the power to reject all the tenders cannot be exercised arbitrarily and must depend for its validity on the existence of cogent reasons for such action. The object of inviting tenders for disposal of a commodity is to procure the highest price while giving equal opportunity to all the intending bidders to compete. Procuring the highest price for the commodity is undoubtedly in public interest since the amount so collected goes to the public fund. Accordingly, inadequacy of the price offered in the highest tender would be a cogent ground for negotiating with the tenderers giving them equal opportunity to revise their bids with a view to obtain the highest available price. The inadequacy may be for several reasons known in the commercial field. Inadequacy of the price quoted in the highest tender would be a question of fact in each case. Retaining the option to accept the highest tender, in case the negotiations do not yield a significantly higher offer would be fair to the tenderers besides protecting the public interest. A procedure wherein resort is had to negotiations with the tenderers for obtaining a significantly higher bid during the period when the offers in the tenders remain open for acceptance and rejection of the tenders only in the event of a significant higher bid being obtained during negotiations would ordinarily satisfy this requirement. This procedure involves giving due weight to the legitimate expectation of the highest bidder to have his tender accepted unless outbid by a higher offer, in which case acceptance of the highest offer within the time the offers remain open would be a reasonable exercise of power for public good."
22. In this context, it is necessary to refer to Section 11 of the Act, which empowers Airport Authorities of India to discharge its functions under this Act so far as may be on business principles.
23. Though the respondents are entitled to recover the possession of land from the petitioner pursuant to the letter dated 06.07.2005 rejecting the request of the petitioner for renewal of license and for the non-compliance of the provisions of clause 1 of page Nos. 12 and 13 of the financial bid as well as its own undertaking dated 15.06.2007, the respondents could not evict them in view of the order dated 21.07.2007 passed by this Court in MP No. 1 of 2007 in WP No. 23809 of 2007 and also pendency of other two writ petitions. Thus, the continuance of possession by the petitioner is unjustifiable in law.
24. The second respondent entered into a Memorandum of Understanding with the Union Territory of Pondicherry for expansion of Puducherry Airport thereby Union Territory of Puducherry agreed to give 261 acres of additional land at their cost to the second respondent, at the first stage for expansion of the length and width of the existing runway and the apron etc., and also connect terminal buildings and other buildings to facilitate ATR 72 operation at the initial stage and bigger aircrafts later on. It is stated that the Union Territory of Puducherry also initiated acquisition proceedings. The second respondent, after getting approval of its master plan, floated a tender for the work of expansion and strengthening of the runway at Pondicherry Airport. Thereafter, the tenders were opened on 14.02.2008 and the work was awarded on 07.03.2008 to successful bidder namely M/s. Vishal Infrastructures Limited for a bid amount of Rs.19,77,45,342.30. As per the terms and conditions of the work order, the contractor has to complete the work within six months from the 10th day after issuance of work order and complete it on or before 16.09.2008. It is the case of the respondents that the land in occupation of the petitioner is situate in the middle of the project site, hence they are unable to proceed with the project work effectively, with the result, they sent a letter dated 30.05.2008 to the petitioner informing the closure of airfield. Thus, the petitioner prevented not only not only the highest bidder namely M/s. Montis Aviation Academy from taking steps to open the flying school, but also prevented the second respondent from expanding the length and width of the existing runway, apron etc., Hence, this Court is of the considered view that the order dated 30.05.2008 is valid and the WP No. 13367 of 2008 is liable to be dismissed.
25. The learned counsel for the petitioner submitted that under Section 12 (d) and (q) of the Act the Airports Authority of India has to establish training schools or institution or centre for training of its officers and employees in regard to any matter connected with the purpose of this Act as well as to establish training institutes and workshops, but without doing so, it invited tenders from private persons. The respondents replied that under Section 12 (d) and (q) of the Act, the Airports Authority of India has power to establish training institutes and workshops for the staff employed by them, but not for pilot training.
26. Section 2 (a) of the Act defines 'aeronatucial communication station' which means a station in the aeronautical communication service including aeronautical practising service, aeronautical fixed service, aeronautical mobile service and aeronautical radio communication service. Section 2 (d) of the Act defines 'air traffic service' which includes flight information service, alerting service, air traffic advisory service, air traffic control service, area control service, approach control service and airport control service. Section 2 (e) of the Act deals with 'air transport service' which includes any service, for any kind of remuneration, whatsoever, for the transport by air of persons, mail, or any other thing, animate or inanimate, whether such service relates to a single flight or series of flights. Section 2 (i) of the Act speaks about 'civil enclave' which means the area, if any, allotted to an airport belonging to any armed force of the Union, for use by persons availing of any air transport services from such airport or for the handling of baggage or cargo by such service, and includes land comprising of any building and structure of such area. Section 12 of the Act contemplates the functions of the Airports Authority of India namely to manage the airport, the civil enclaves and aeronautical communications efficiently. Further, it shall be the duty of the authority toprovide air traffic and air transport services at any airport and civil enclaves. A conjoint reading of Sections 12 (1), (2) and (3) (d), (q) of the Act makes it clear that the training schools, institutions and workshop mentioned therein are only to train the officers employed by the Airports Authority of India, which has nothing to do with the flying schools, hence, the argument of the Counsel for the petitioner that it is the duty of the Airports Authority of India to open flying schools is nothing but a misconception of law and the same is rejected.
27. For the above said reasons, all the writ petitions are dismissed. No costs. Consequently, connected miscellaneous petitions are closed.
rsh To
1. The Union of India rep. By Secretary to Government Ministry of Civil Aviation Rajiv Gandhi Bhavan New Delhi 110 003
2. The Airports Authority of India rep. by its Chairman Rajiv Gandhi Bhavan New Delhi
3. The Regional Executive Director (SR) Airports Authority of India Chennai Airport Chennai 600 027
4. The Manager (ATC) Airports Authority of India Pondicherry Airport Pondicherry 605 008
5. The Director General of Civil Aviation Rajiv Gandhi Bhavan New Delhi