Bombay High Court
Garuda Aviation Services Pvt. Ltd vs Airport Director Of Pune Airport on 16 April, 2019
Author: G. S. Kulkarni
Bench: G. S. Kulkarni
CARBP 570-17.doc
Anand/vks IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
IN ITS COMMERCIAL DIVISION
COMMERCIAL ARBITRATION PETITION NO. 570 OF 2017
Garuda Aviation Services Pvt. Ltd. ]
A company incorporated under the provisions ]
of the Indian Companies Act and having its ]
registered office at: 142, Upper Govind Nagar ]
Malad (E) Mumbai 400 097 ] Petitioner
]
Acting through ]
it's Authorized representative ]
Mr. Avinas T. More, ]
Vs.
Airport Director of Pune Airport ]
Constituted under the provisions of Airports ]
Authority of India Act, 1994, ] Respondent
having office at Pune International Airport ]
Pune 411 032 ]
Mr. Simil Purohit i/b. Mr. V. P. Pandya, Advocate, for the
Petitioner
Mr. Mayur Khandeparkar a/w Ms Lopa Munim i/b. M/s.
Rajesh Kothari & Co., Advocate, for the Respondent.
CORAM : G. S. KULKARNI, J.
CLOSED FOR ORDER : 07.01.2019
PRONOUNCED ON : 16.04.2019
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CARBP 570-17.doc
JUDGMENT
. This petition under Section 34 of the Arbitration and Conciliation Act, 1996 (for short, "ACA") challenges an Award dated 20.11.2017 passed by the learned sole arbitrator adjudicating the disputes and differences which had arisen between the petitioner / claimant and the respondent - Airport Authority of India (for short "AAI" ) under a license agreement dated 03.03.2010.
2. FACTS:-
The - AAI had invited tenders for grant of license for the "Car Parking" contract at the Pune Airport. This license was for a period of five years for a car parking area approximately 11000 Sq. Meters outside and in proximity of the Pune Airport terminal building. A lump sum license fee per month irrespective of the profit or loss of the contractor with 10% annual escalation each year was to be paid by the licensee to the AAI.
3. The petitioner being the successful bidder, a license 2 of 20 ::: Uploaded on - 16/04/2019 ::: Downloaded on - 18/04/2019 00:37:18 ::: CARBP 570-17.doc agreement dated 03.03.2010 came to be entered between the AAI and the Petitioner, for the five year period from 13.02.2010 to 12.02.2015, unless terminated earlier for the reasons as set out in Clause 1 of the said license agreement.
4. In Clause 15 of the license agreement, parties agreed as under :-
"15. That the authority reserves to itself the right to charne the location of the Premises at any time and may at its discretion call upon the License to vacate the site and may give him an alternative premises for the purpose of this licence. In such a case, the licensee shall be bound to vacate the premises immediately and accept the said alternate premises. The entire expenditure on such shifting shall be borne by him and the licensee shall not be entitled to claim any compensation or revised in the licence fee on that score."
5. The license agreement also contained the schedule of premises, specifying space admeasuring 11000 sq. meters. The license agreement further annexes the general terms and conditions which also contained an arbitration clause (Clause 30). The parties also agreed to the special guidelines for this car 3 of 20 ::: Uploaded on - 16/04/2019 ::: Downloaded on - 18/04/2019 00:37:18 ::: CARBP 570-17.doc parking contract which specified the division of the area and the rates for the different category of vehicles. Clauses 1, 2, 21 and 22 of the Special Guide Lines for the car parking contract need to be noted which read thus :-
"1.Area approx. 11,000 sq. mtrs Capacity : four wheelers/ car approx. 300 two wheelers/scooters approx 200 Location Area Purpose A1 (in front of TB) 3300 Sq. Mtrs. 4 Wheeler/Cars A2 (Western side of TB) 700 Sq. Mtrs. 2 Wheeler A4 New Car Park Area 3500 Sq. Mtrs. 4 Wheeler/Cars (Eastern Side of CWE Office) A5 New Car Park Area 3500 Sq. Mtrs. 4 Wheeler/Cars (Western Side of CWE Office)
2. The tender may regulate the parking of vehicles at the Car Park area at Pune Airport, and charge parking fee at the following rates including Service Tax :-
a) Car/Van Parking Charges General Rs.40.00
b) Car/Van Parking Charges Premium Rs.60.00
c) Mini Bus/Bus Coaches in General Parking Rs.40.00
d) Truck/Coach/Tempo Rs.55.00
e) Two Wheelers Rs.10.00
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f) Coach parked Opp. Terminal Building Rs.120.00 (The charges per entry shall be for duration of 04 hours or part thereof)
21. The capacity area indicated is tentative. Presently, the Pune Airport is undergoing renovation work. As soon as the renovation works are completed. The Car Parking area will be modified. However, the area i. e. 11,000 Sq. Mtrs. (approx.) indicated will be made available to the contractor on completion of renovation works.
22. All the above guidelines will form part of the agreement."
6. It appears that the AAI, being so authorized under the license agreement by a communication dated 18/19.07.2011 informed the Petitioner that following a specific security alert/ messages received from the "State Police Head Quarters" and as per the instructions of the local Police authorities, it was decided that the present premium car parking in front of terminal building shall be shifted to parking area III, across approach road from 17.07.2011 ( 22 hours ) onwards, taking into consideration the high alert and the security scenario. The petitioner was requested to co-operate and close the premium car parking immediately for the said period. The petitioner responded to the said letter of the AAI, by its letter dated 21.07.2011 requesting that in view of the 5 of 20 ::: Uploaded on - 16/04/2019 ::: Downloaded on - 18/04/2019 00:37:18 ::: CARBP 570-17.doc closing of the premium car parking rebate in the licence fee of 50% for the corresponding period be granted till such time the premium car parking remains closed. However, the AAI, by its letter dated 25.07.2011 referring to Clause 15 of the license agreement did not accept this request of the petitioner for a rebate in the license fees.
7. The Petitioner, thereafter, again by its letter dated 27.07.2011 addressed to the AAI recorded that the premium car parking area was closed by the AAI and shifted within the existing area alloted to the Petitioner and no alternative space has been alloted to the Petitioner. It was stated that as the premium parking area that was originally alloted was taken back and shifted to new area carved out within the alloted area, it would tantamount to curtailment of the premium parking area alloted to the petitioner as per the license award letter. The petitioner, therefore, requested for rebate in the license fees, as the area taken over was prime, in front of the building and requested that at least 50% rebate was necessary. By a letter dated 01.08.2011, the AAI informed the Petitioner that the closing of the premium 6 of 20 ::: Uploaded on - 16/04/2019 ::: Downloaded on - 18/04/2019 00:37:18 ::: CARBP 570-17.doc car parking will be continued upto 15.08.2011 and till further notice at the Pune Airport. It was stated that as informed to the petitioner vide letter dated 18.07.2011, the premium car parking may be shifted to parking area No.3.
8. The petitioner by it's letter again raised a concern in regard to the closing of the premium car parking and requested for a rebate in the license fee by a letter dated 04.08.2011. Thereafter, again by a letter dated 18.08.2011, the AAI informed the petitioner that closing of the premium car parking will be continued till 20.08.2011. It was also recorded that the petitioner was already informed by AAI's letter dated 18.07.2011 that the same be shifted to car parking No. 3.
9. Further correspondence ensued between the parties and as seen from the letters of the petitioner to the AAI dated 24.08.2011, 14.09.2011 and 15.03.2012, the only request of the Petitioner was to seek rebate in the license fees.
10. The petitioner, finally by it's letter dated 20.10.2012 7 of 20 ::: Uploaded on - 16/04/2019 ::: Downloaded on - 18/04/2019 00:37:18 ::: CARBP 570-17.doc addressed to the AAI referring to it's various letters requested for appointment of an arbitrator and / or for grant 50% rebate due to the changes made by closure of the premium car parking which the petitioner stated had caused huge loss of business to the petitioner. Correspondence ensued between the parties between October to March, 2014. The AAI by its letter dated 27.03.2014, inter-alia informed the petitioner that if the petitioner wished to foreclose the car parking contract at the Pune Airport, the petitioner could do so under Clause 1(a), 18 & 19 of the license agreement. It appears that issues were discussed between the parties.
11. As the the AAI did not appoint an arbitrator, the petitioner approached this Court in an Application under Section 11(6) of the Act. This Court by order dated 10.12.2014 appointed a sole arbitrator to adjudicate the disputes and differences between the parties.
12. It, however, appears that the petitioner continued to execute the contract and also expressed its further willingness to 8 of 20 ::: Uploaded on - 16/04/2019 ::: Downloaded on - 18/04/2019 00:37:18 ::: CARBP 570-17.doc do so which is clear from the letter dated 16.02.2015 addressed to the AAI in which the petitioner recorded as under :-
"Without prejudice to our contentions pertaining to the said existing disputes and further without prejudice to our rights to receive compensation/rebate in the license fees for the entire period of the contract which expired on 12/02/2015 and for the period till which we manage and operate the contract at your express request and further only in view of our long standing relations with the AAI at Pune Airports and other Airports across the country we are agreeable to continue with the contract. It may be noted that we are presently paying 50% of the agreed license fees and we will continue to pay the 50% of the license fees which was applicable for the last month of the contract which expired on 12/02/2015. You are requested to further note that we seek to contend that the 50% reduction in the license fees is not sufficient or adequate recompense for the losses suffered by us during the contract and that the exact quantum would be subject to the final determination by the Learned Arbitrator."
13. On the above backdrop before the sole arbitrator, a statement of claim came to be filed by the petitioner. The nature of the claim as made by the petitioner before the arbitral tribunal can be noted as made in para 27 of the statement of claim which reads thus :-
9 of 20 ::: Uploaded on - 16/04/2019 ::: Downloaded on - 18/04/2019 00:37:18 ::: CARBP 570-17.doc "27. The Claimant states that they have suffered tremendous loss on account of the issues as is highlighted above. The Claimant states that they are entitled for being compensated as per the summary of Losses annexed at Appendix I to the Statement of Claim on account of the following heads of losses :
A. Losses due to the Respondent abruptly withdrawing the designated area of the Car Park bearing no. A-2 admeasuring 700 sq. meters meant for two wheeler parking at Pune Airport with effect from 30/10/2010 and the designated area of the Car Park bearing no. A-1 admeasuring 3300 sq. meters meant exclusively for premium parking and attracting 50% higher rates as compared to other parking area at Pune Airport, with effect from 18/07/2011 till date B Losses due to the officers of the Respondents forcibly parking their vehicles in the premium car parking area i. e. A-1 from the date of the commencement of the contract till the date the premium car park was closed."
14. The petitioner accordingly prayed for an award in the sum of Rs. 5,40,09,363/- alongwith interest and damages as set out in the Appendix I. 10 of 20 ::: Uploaded on - 16/04/2019 ::: Downloaded on - 18/04/2019 00:37:18 ::: CARBP 570-17.doc
15. The respondent - AAI contested the claim by filing their written statement, as also filed a statement of Counter Claims as under :-
Counter Claim No. 1 :- Outstanding dues towards License Fees and Interest @ 18% thereon;
Counter Claim No. 2 :- Recovery of extra charges collected by Claimant from the visitors towards Premium charges of Car Park and Service Tax;
Counter Claim No. 3 :- Interest @ 18% per annum :-
16. The Petitioner contested the Counter Claims by filing it's written statement. Parties also led their, respective evidence by examining their witnesses.
17. The learned arbitrator considering the terms and conditions of the contracts and the evidence on record, did not find favour in the claims as made by the petitioner and rejected the said claims. The Counter Claims as made by the AAI were allowed in terms of the following Award :-
"24. In the result, I do order and award.
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(i) That the Claimant do pay to the
Respondent the sum of Rs. 1,26,65,772/- as and by way of unpaid license fees for the period 1 st March, 2014 onwards;
(ii) That the Claimant do pay to the Respondent the sum of Rs. 12,75,235.31/- being interest at the rate of 18% per annum till 31 st March, 2015;
(iii) That the Claimant do pay to the Respondent interest at the rate of 18% per annum on the principal sum of Rs. 1,26,65,772/- from 1st April 2015 till payment and / or realization;
(iv) That the Respondent do pay to the Claimant costs quantified at Rs. 3,00,000/-."
18. Mr. Purohit, learned counsel for the Petitioner in assailing the impugned award has made the following limited submissions :-
i. It is submitted that as the Premium Car Parking area was taken away, the Petitioner would become entitled for the loss as suffered on that count and the claim so made before the 12 of 20 ::: Uploaded on - 16/04/2019 ::: Downloaded on - 18/04/2019 00:37:18 ::: CARBP 570-17.doc arbitral tribunal was a legitimate claim. It is submitted that the claim was proved on evidence and could not have been denied;
ii. It is submitted that alternate premises were never offered and that the Car Parking No. III which was offered as an alternate area was never identified, hence compensation of loss of business, as suffered was legitimately entitled to the petitioner;
iii. It is submitted that there was no handover or takeover measurements and thus, the contention of the AAI that alternate premises for car parking were alloted cannot be accepted. To support this, learned counsel for the petitioner has referred to question No. 99 in the deposition of the AAI's witness, which reads thus :-
"Q. 99 Would it be correct to say that from October 2010, there is a permanent shifting of the parking described as 'A2' ?
Ans: Yes, from the last week of October 2010, the said parking was shifted to Car Park No. 2 and 3.
13 of 20 ::: Uploaded on - 16/04/2019 ::: Downloaded on - 18/04/2019 00:37:18 ::: CARBP 570-17.doc iv. It is submitted that considering the above answer, it was not in dispute that the premium parking was shifted and thus, in any event, it was required to be held that there was a loss of business to the Petitioner which was required to be compensated, being an admitted fact.
19. On the other hand, Mr. Khandeparkar, learned counsel for the AAI would submit that it has been rightly held by the learned arbitrator that the petitioner was not entitled to make any claim for compensation in view of the clear terms of Clause 15 of the said agreement and that the petitioner was not entitled for any compensation for the withdrawal of the premium car parking area. It is submitted that all contentions, as urged on behalf of the petitioner are in the nature of re-appreciation of the evidence which is not permissible when the Court is called upon to exercise its jurisdiction under Section 34 of ACA. As regards the contention of the petitioner that there was no "take over" document, it is submitted that take over document was placed on record in which the car parking area which was handed over to the AAI on the expiry of the contract indicating that the area was 11000 sq. 14 of 20 ::: Uploaded on - 16/04/2019 ::: Downloaded on - 18/04/2019 00:37:18 ::: CARBP 570-17.doc meters and thus, there is no doubt whatsoever that during the entire tenure of the contract, the Petitioner took the benefit of an area of 11000 sq. meters which was the contractual area. It is submitted that in any event, there is no material / evidence to accept the petitioner's claim. The learned arbitrator would not have jurisdiction outside the contract in considering the petitioner's claim for losses. The Court's attention is also been drawn to the written statement filed on behalf of the AAI and more particularly to paragraph No. 6 to indicate that additional area was already handed over to the petitioner and that handing and taking over note was also part of the contract. It is contended that the petitioner at all material times was aware, right from the inception of the contract of the car parking area Nos. A1 and A2 could be withdrawn for operation / security reasons and accommodated in parking area Nos. A4 and A5. It is contended that as clearly averred in para 6 (a) of the written statement, the AAI vide their letter dated 18.07.2011 had informed the Petitioner that the Petitioner was required to shift the car parking area A1 and A2 to A4 and A5 and the Petitioner was given an additional area of 4000 sq. meters in car parking area Nos. A4 and A5 so that 15 of 20 ::: Uploaded on - 16/04/2019 ::: Downloaded on - 18/04/2019 00:37:18 ::: CARBP 570-17.doc the petitioner could use 11000 Sq. meters as per the agreement. It is submitted that it was never the case that the petitioner was deprived of any area or the petitioner was not permitted to use the said additional / compensatory area to be used as premium car parking, as also charge the corresponding rates. It is, thus, submitted that there is no perversity or any illegality in the award as pronounced by the learned arbitrator.
20. I have heard learned counsel for the parties. I have also perused the record and the compilation of the documents, as placed on record, being record of the arbitral proceedings.
21. At the outset, it needs to be observed that there is no dispute whatsoever on the terms and conditions, as contended in the license agreement dated 03.03.2010 under which the disputes have arisen between the parties. Prior to the license agreement in question, the petitioner was managing the car parking area at the Pune Airport and was also aware about all the intricate commercial knowhow of the contractual work in question. It is on this background, the present leave and license agreement came to be entered by the petitioner. The petitioner with open eyes agreed 16 of 20 ::: Uploaded on - 16/04/2019 ::: Downloaded on - 18/04/2019 00:37:18 ::: CARBP 570-17.doc to clause 15 under the agreement under which the petitioner agreed that the AAI reserved it's right to change the location of the premises at any time and may at its discretion call upon the petitioner to vacate the site and may give the petitioner an alternate premises for the purpose of the license. The petitioner also agreed that in such a case, the petitioner was bound to vacate the premises immediately and accept alternate premises, as also the expenditure for any such shifting was to be borne by the petitioner and the petitioner was not entitled to claim any compensation or revision in the license fees.
22. As Clause 15 of the license agreement did not entitle the petitioner to make any claim for compensation for vacating of the site or for shifting of the site, it is thus surprising as to how the petitioner could make a claim for loss of business and seeks compensation in that regard. This apart, the correspondence which is referred in some detail above, would clearly indicate that consistent demand of the petitioner was only for a rebate in the license fees. However, while making a claim before the arbitral tribunal, a claim for loss of business was made. Thus, none of the 17 of 20 ::: Uploaded on - 16/04/2019 ::: Downloaded on - 18/04/2019 00:37:18 ::: CARBP 570-17.doc limited contentions as urged on behalf of the petitioner can be accepted.
23. Apart from the above observations even assuming that there was no bar under the contract for the petitioner to seek compensation for loss of area, it is well settled that such losses / damages are required to be proved. On a query as made in this regard, it appears to be clear position on record that there was no iota of material / evidence on the basis of which a claim for quantum of damages as made could be granted by applying permissible norms for award or damages under Section 73 of the Contract Act.
24. There is much substance in the several contentions as urged on behalf of the AAI. A perusal of the award would clearly indicate that the learned arbitrator has taken into consideration the documentary and oral evidence which was placed on record. More particularly, in view of the clear terms of the licence agreement the arbitral tribunal has come to a conclusion that the claim, as made by the petitioner could not be granted. I do not 18 of 20 ::: Uploaded on - 16/04/2019 ::: Downloaded on - 18/04/2019 00:37:18 ::: CARBP 570-17.doc find that there is any perversity or illegality in the findings, as recorded by the learned arbitrator. The findings are based on evidence. The arguments as advanced on behalf of the petitioner in fact would required this Court to re-appreciate evidence and come to a different conclusion than what has been arrived at by the learned arbitrator. This is surely not permissible in exercise its jurisdiction under Section 34 of ACA. It is well settled that the arbitral tribunal would be well within its jurisdiction to interpret the terms of the contract and would be the sole authority to appreciate the evidence in considering the claims made before it. The impugned award is fair and reasonable and in no manner can be said to be perverse. The findings which are recorded by the arbitral tribunal are based on evidence. The impugned award is completely within the framework of the law and the facts of the case.
25. On a reading of the award, I do not find that the learned arbitrator in any manner, acted arbitrarily, irrationally or in any manner, ignoring the terms and conditions of the contract. Moreover, if the arbitrator was to award compensation, as urged 19 of 20 ::: Uploaded on - 16/04/2019 ::: Downloaded on - 18/04/2019 00:37:18 ::: CARBP 570-17.doc on behalf of the petitioner, the same would have been contrary to Clause 15 of the license Agreement. The law in regard to this is well settled and as seen in the decision of the Supreme Court as rightly relied on behalf of the respondents. Thus no case is made out for this Court to exercise jurisdiction under any of the parameters falling under Section 34 of the ACA.
26. Resultantly the petition fails. It is accordingly dismissed with costs of Rs.50,000/- to be paid by the petitioner to AAI within four weeks from today.
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