[Cites 2, Cited by 0]
Calcutta High Court
Paichmuthu Pandara Thevar vs The Airports Authority Of India on 10 February, 2026
Author: Shampa Sarkar
Bench: Shampa Sarkar
ORDER OCD - 11
IN THE HIGH COURT AT CALCUTTA
COMMERCIAL DIVISION
ORIGINAL SIDE
AP-COM/73/2026
PAICHMUTHU PANDARA THEVAR
VS
THE AIRPORTS AUTHORITY OF INDIA
BEFORE:
The Hon'ble JUSTICE SHAMPA SARKAR
Date: 10th February 2026
Appearance:-
Mr. Kallol Basu, Advocate
Mr. Nilanjan Pal, Advocate
Mr. Aurin Chakraborty, Advocate
...for the petitioner.
Mr. Suhrid Sur, Advocate
... for respondent.
1. The parties entered into a license agreement dated January 16, 2023. On
the basis of the said agreement, the petitioner was to, inter alia, operate a
canteen facility in front of the old domestic terminal at Netaji Subhash
Chandra Bose International Airport. The agreement was for a period of
seven years, commencing from April 22, 2023. The petitioner furnished a
bank guarantee as security. The respondent handed over the demarcated
site in front of the airport for operation of the canteen, on February 10,
2023. According to the petitioner, a high mast pole in front of the said
area was creating problems towards fabrication of the shed of the canteen.
The petitioner also informed the respondent that the access to the canteen
was closed due to the construction of the Metro. Accordingly, large
numbers of potential customers were unable to access the canteen facility
which led to reduction of the sales by 70%. The petitioner requested the
respondent to refund the earnest money, by an email dated November 2,
2023. The respondent informed the petitioner that the petitioner was
liable to pay dues including license fees, utility and facilitation charges,
CAM charges, electricity charges, telephone bills etc., amounting to
Rs.27,22,842.7. The respondent also informed the petitioner that if the
payments were not made within the time stipulated in the letter, interest
would be levied. By an email dated November 20, 2023, the respondent
further requested the petitioner to make payment of the dues within three
days, failing which the respondent would be constrained to take necessary
steps. By another email dated December 27, 2023, the petitioner
informed the respondent that during the subsistence of the agreement, the
petitioner had already suffered huge loss due to non-removal of the high
mast pole, establishment of illegal stalls, food counters by other vendors
who had encroached into the land next to the canteen facility. The
petitioner requested reduction of the license fee by 60%. The respondent
informed the petitioner that the petitioner was liable to pay outstanding
dues amounting to Rs.36.4 lakh. On July 25, 2024, the respondent
issued a notice demanding payment of outstanding dues to the tune of Rs
31,73,196.04. The petitioner informed the respondent that it was unable
to settle the dues. Again, a notice requesting payment of outstanding
dues was served to the petitioner by the respondent with a condition that
if the same were not paid within seven days from receipt of the notice, the
respondent would encash the security deposit and/or the bank guarantee.
Further notices were issued to the petitioner for payment of the
outstanding dues with interest amounting to more than Rs.50 lakh.
Thus, disputes cropped up between the parties.
2. The agreement provides that all disputes and differences between the
parties would be resolved by a Dispute Resolution Committee [DRC] at the
first instance to be set up at the Airport, failing which the dispute shall be
referred to arbitration of a person to be appointed by the Chairman /
Member / RED of the Authority. The petitioner invoked arbitration by a
notice dated September 4, 2025. It is specifically pleaded in paragraph 18
of this application, that 50% of the outstanding dues had already been
deposited by the petitioner. Details of such payment had been
enumerated in a letter written by the petitioner to the respondent.
3. According to Mr. Sur, learned advocate for the respondent, before
reference of the disputes to the Dispute Resolution Committee, the
licensee was required to first deposit 50% of the disputed amount in the
form of bank guarantee, which would be valid for at least two years. Thus,
he submits that this application is premature and the dispute should not
be referred to arbitration. He further submits that by taking advantage of
the reference, the petitioner will not pay the license fee for the subsequent
periods.
4. The referral court is only required to, prima facie, satisfy itself as to the
existence of an arbitration clause and refer the dispute. It is the duty of
the referral court to uphold the principle of competenz-competenz by
ensuring that the arbitration agreement entered into between the parties
is upheld. The contention of Mr. Sur that the dispute cannot be treated
asarbitrable, and reference cannot be embarked upon, unless 50% of the
disputed amount is deposited, is an issue of jurisdiction and arbitrability,
which can be decided by the learned arbitrator, if raised at the appropriate
stage. With regard to the dispute as to the dues payable by the petitioner
and whether the petitioner was entitled to reduction of the amount on
account of various inconveniences in the running of the business, as
elaborated in the notice invoking arbitration, are again matters of
evidence. It is submitted by both the parties that the DRC was not
constituted. Moreover, the petitioner has rightly approached this Court as
unilateral appointment of an arbitrator by the respondent is no longer
permissible in law. Mr. Sur's contention that the petitioner will use this
order to avoid payment of the license fee is not accepted. This reference is
in no way an injunction upon the respondent from claiming the license
fees for the subsequent periods.
5. Under such circumstances, the application is allowed, by appointing Mr.
Kushik Dey [9830467715] as the learned arbitrator to resolve the disputes
between the parties. This appointment is subject to compliance of Section
12 of the Arbitration and Conciliation Act, 1996. The learned Arbitrator
shall fix his remuneration, in terms of the Schedule of the Act. All
questions with regard to arbitrability of the dispute, admissibility of the
claim, limitation etc. are kept open to be decided by the learned arbitrator,
if raised.
(SHAMPA SARKAR, J.)
S. Kumar
