Delhi High Court - Orders
Confederation For Concessionaire ... vs Airports Authority Of India & Anr on 17 February, 2021
Author: Prathiba M. Singh
Bench: Prathiba M. Singh
Signature Not Verified
Digitally Signed By:DINESH
SINGH NAYAL
Signing Date:20.02.2021
22:28:54
$~37
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 2204/2021 & CM APPL.6421-22/2021
CONFEDERATION FOR CONCESSIONAIRE
WELFARE & ORS. ..... Petitioners
Through: Mr. Rajiv Bansal, Sr. Advocate with
Mr. Varun Shankar, Mr. R.S.
Lakshman, Ms. Jasmeet Kaur Ajimal,
and Ms. Nandita Sharma, Advocates.
versus
AIRPORTS AUTHORITY OF INDIA & ANR. ..... Respondents
Through: Mr. Digvijay Rai and Mr. Aman
Yadav, Advocates for R-1/AAI. (M:
9873103599)
Mr. Asheesh Jain, CGSC with Mr.
Amrit Singh, Advocate for R-2. (M:
9811125100)
CORAM:
JUSTICE PRATHIBA M. SINGH
ORDER
% 17.02.2021
1. This hearing has been done through hybrid mode (physical and virtual hearing).
2. The present petition has been filed on behalf of an association of various concessionaries with the Airports Authority of India (hereinafter, "AAI"). Some concessionaires are also impleaded as co-Petitioners. The Petitioners have entered into Concession agreements or Licence agreements for owning and/or managing various duty free shops, food and beverage outlets and other retail outlets at various airports. Due to the outbreak of the COVID-19 pandemic, disputes have arisen between the Petitioners and AAI in respect of monthly payments that they have to make to the AAI, W.P.(C) 2204/2021 Page 1 of 5 Signature Not Verified Digitally Signed By:PRATHIBA M SINGH Signing Date:20.02.2021 21:38 Signature Not Verified Digitally Signed By:DINESH SINGH NAYAL Signing Date:20.02.2021 22:28:54 especially owing to the complete or partial closure of airports during the COVID-19 pandemic. It is the case of the Petitioners that the benefits extended by the AAI during this period are not sufficient and due to the low footfall they are unable to make the payments under the agreements.
3. It is submitted on behalf of the Petitioners that as per the concession agreement, the Petitioners are entitled to exit after giving 120 days' notice. On behalf of the AAI, it is argued that once the force majeure event has been operating for more than 120 days, the Petitioners would have to give further 120 days' notice before exiting. It is further submitted that the Petitioners wish to exit without incurring any further financial burden upon themselves.
4. Considering the fact that the COVID-19 pandemic is, admittedly, a force majeure event, the Petitioners ought to be able to exit from the concessionaire agreement in terms of the contractual conditions. The relevant clauses of the concessionaire agreement are extracted herein below:
"17.1 Force Majeure Event As used in this Agreement, Force Majeure Event means the occurrence of any of the Non-Political Events, the Political Events or the Other Events in India, set out in Articles 17.2, 17.3 and 17.4 respectively including the impact/consequence thereof which:
(a) is beyond the control of the Party claiming to be affected thereby (the "Affected Party");
(b) prevents the Affected Party from performing or discharging its obligations under this Agreement; and
(c) the Affected Party has been unable to overcome or prevent despite exercise of due care W.P.(C) 2204/2021 Page 2 of 5 Signature Not Verified Digitally Signed By:PRATHIBA M SINGH Signing Date:20.02.2021 21:38 Signature Not Verified Digitally Signed By:DINESH SINGH NAYAL Signing Date:20.02.2021 22:28:54 and diligence.
Xxx 17.10 Termination Due to Force Majeure Event If the period of Force Majeure continues or is in the reasonable judgment of the Parties likely to continue beyond a period of 120 (one hundred and twenty) Days, the Parties may mutually decide to terminate this Agreement or continue this Agreement on mutually agreed revised terms. If the Parties are unable to reach an agreement in this regard, the Affected Party shall after the expiry of the said period of 120 (one hundred and twenty) Days be entitled to terminate the Agreement in which event, the provisions of Article 19 shall, to the extent expressly made applicable, apply."
5. A perusal of clauses 17.1 and 17.10 of the agreement shows that the force majeure event would include any non-political event and other events which are mentioned in clauses 17.2, 17.3 and 17.4. In any event, even AAI does not dispute the fact that COVID-19 is a force majeure event. Mr. Rai submits that several of the Petitioner's members have already terminated/exited. Several other members have outstanding dues prior to the outbreak of the pandemic and that the AAI has already given sufficient benefits owing to the pandemic.
6. The court has perused the clauses relating to Force Majeure. There can be no doubt that the pandemic is a Force Majeure event. Since the Petitioners wish to terminate/exit from their respective agreements, while directing completion of pleadings and while the issues are under examination by this Court, there is a need to reduce the risk to both parties as simply postponing the exit by the Petitioners would also make it impossible for the AAI to re-allot the spaces to willing concessionaires and W.P.(C) 2204/2021 Page 3 of 5 Signature Not Verified Digitally Signed By:PRATHIBA M SINGH Signing Date:20.02.2021 21:38 Signature Not Verified Digitally Signed By:DINESH SINGH NAYAL Signing Date:20.02.2021 22:28:54 the outstandings against the Petitioners would continue to mount. Accordingly, as an interim measure, the following arrangement is directed:
i. Since COVID-19 has been prevalent for more than 120 days, in respect of each of the Petitioners, the first letter to the AAI communicating the concerned Petitioner's intention to exit, shall be considered as the first date of the notice. After expiry of 120 days from the date of this notice, the Petitioners shall be entitled to exit from the concessionaire agreement.
ii. In respect of payments prior to 31st March, 2020, the entire payment would have to be made by the concessionaires. iii. If payments upto 31st March, 2020 are paid by the concessionaires, the benefits, as extended by the AAI on account of the COVID-19 pandemic, shall be extended to such entities. iv. After the outbreak of the pandemic, since disputes have arisen as to what would be payable, the Petitioners would pay the amounts which according to them would be payable but keep all the bank guarantees alive during the pendency of the present petition. The bank guarantees shall, however, not be encashed, subject to them being kept alive.
v. AAI would not prevent exit of the Petitioners for non-payment.
7. Counter affidavit be filed within six weeks. In the counter affidavit, the outstanding payments in respect of each of the Petitioners shall be given in tabular form. Upon perusing the same, this Court would pass further orders in respect of payments, if any, required to be made by the Petitioners. Rejoinder affidavit be filed within four weeks.
8. In case of Petitioners who, either do not have a subsisting contract W.P.(C) 2204/2021 Page 4 of 5 Signature Not Verified Digitally Signed By:PRATHIBA M SINGH Signing Date:20.02.2021 21:38 Signature Not Verified Digitally Signed By:DINESH SINGH NAYAL Signing Date:20.02.2021 22:28:54 with AAI or who have given their no objection for adjustment of the security deposit, the bank guarantees shall be encashed by the authority and the AAI would be free to make the adjustments.
9. List on 24th May, 2021.
PRATHIBA M. SINGH, J.
FEBRUARY 17, 2021/dk/T W.P.(C) 2204/2021 Page 5 of 5 Signature Not Verified Digitally Signed By:PRATHIBA M SINGH Signing Date:20.02.2021 21:38