Bharat Petroleum Corporation Ltd vs Delhi International Airport Pvt ...
2013 Latest Caselaw 639 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI
+      IA Nos. 7905/2011 and 12029/2011 in CS(OS) 1178/2011
                 Judgment delivered on: February 11,2013


BHARAT PETROLEUM CORPORATION LTD.                ....Plaintiff
                Through Mr. Sudhir Chandra, Sr. Adv. with
                        Mr. Avneesh Garg, Adv.

                    versus

DELHI INTERNATIONAL AIRPORT PVT LTD and anr.       ....Defendant
                 Through  Mr. Ashwani Kumar Mata, Sr. Adv. with
                          Mr. Milanka Chaudhury and Mr.
                          Sarojanand Jha, Advs. for D-1, Mr. Rajeev
                          Mehra, Sr. Adv. with Ms. Anjana Gosain,
                          Mr. Milanka Chaudhry, Mr. Ashish
                          Virmani, Ms. Prerna Shah Deo, Advs. for
                          D-2.

       CORAM:
       HON'BLE MR. JUSTICE KAILASH GAMBHIR


1.

By this order I propose to dispose of the application filed by the plaintiff

under Order 39 Rule 1 and 2 read with Section 151 CPC and application filed by

defendant No. 1 under Order 39 Rule 4 read with Section 151 CPC.

2. Before I deal with the rival contentions raised by the counsel for the

parties, it would be necessary to give a brief narration of the facts as set out by the

plaintiff in the plaint. The plaintiff, Bharat Petroleum Corporation Ltd., a public

sector oil company, is engaged in refilling of crude oil and marketing of various

petroleum products including Aviation Turbine Fuel (ATF) which is supplied to

the aircrafts of various airlines landing and taking off from the Terminal-1 (only

Domestic) of Delhi Airport. The business of storing and supplying ATF to the

aircrafts at Delhi Airport commenced some time in the year 1950 by the

predecessor-in-interest of the plaintiff i.e. Burmah Shell Oil Storage and

Distributing Company of India Ltd. which had then installed underground storage

tanks, constructed building/structure and had also placed other facilities including

bowsers for supply of fuel into aircraft at the Delhi Airport. After enactment of

the Burmah Shell (Acquisition of Undertakings in India) Act, 1976, the right, title

and interest of the said Burmah Shell Oil Storage and Distributing Company of

India Ltd. in the licensed land got transferred to the plaintiff company and since

then the plaintiff company has been carrying on the said business of storing and

supplying the Aviation Turbine Fuel to the aircrafts at the Delhi Airport.

3. It is further alleged in the plaint that the License Agreement between the

plaintiff Co. and the then International Airport Authority was renewed from time

to time and vide the last License Agreement dated 11.9.1986, the plaintiff Co. had

agreed to pay an amount of Rs. 1,65,051.37 per year to the Airport Authority for

supplying the Aviation Turbine Fuel to the Aircrafts. According to the plaintiff,

being conferred with the same rights, it had executed certain works of permanent

character at the licensed site the replacement value of which would not be less

than Rs. 3.65 crores.

4. It is further alleged in the plaint that the defendant no. 1, after taking over

all the operations of the Delhi Airport from the earlier airport authority, started

pressurizing the plaintiff Co. to stop running its business from the apron area of

the airport without any reasonable ground whatsoever in furtherance of its

unwarranted commercial gains.

5. It is also alleged in the plaint that in order to avoid the huge loss and to find

out a mutually acceptable solution, the plaintiff gave an offer to relocate its said

installed facilities, if suitable alternative land within apron area of Terminal-I was

provided by the defendant. It is further alleged that instead of paying any heed to

the proposals offered by the plaintiff, the defendant no. 1 vide its notice dated

4.5.2011 asked the plaintiff to completely close down its activities of storing the

Aviation Turbine Fuel as well as the movement of tank trucks and parking of

bowsers in the proximity of Taxiway C, Terminal-1 Apron area w.e.f. 15.5.2011.

The defendant No. 1 through the said notice also threatened the plaintiff to

demolish all structural premises in existence at the apron area in the event of the

plaintiff not discontinuing all its activities in relation to the storage of ATF,

movement of tank trucks and bowsers etc. within the said period.

6. Feeling aggrieved by the said threat extended by defendant No. 1 and to

save itself from being illegally dispossessed from the site in question, the

plaintiff has filed the present suit to seek an order of permanent injunction to

restrain the defendant No. 1 from acting or proceeding on the basis of the said

notice dated 4.5.2011.

7. This case was taken up by the Court on 13.5.2011, when defendant No. 1

was duly represented by Mr. Atul Sharma, Advocate. After hearing the arguments

of both the counsels, the Court directed both the parties to maintain status quo

with respect to the activities of the plaintiff company for storage of ATF facility

and filling the ATF in the aircrafts at Terminal-I of IGI Airport. The Court also

directed the Director General of the Civil Aviation to conduct a fresh audit of the

airfield at Terminal-I of IGI Airport and submit a report on the question whether

the ATF storage facilities of the plaintiff and the facility of filling ATF by the

plaintiff in the aircrafts at Terminal-I of IGI Airport, are detrimental to the

security and safety of the aircrafts using the air field. It would be worthwhile to

reproduce the operative Para of the said order. The same reads as under:-

"Keeping in view all the facts and circumstances of the case, it is directed that till further orders of this Court, the parties will maintain status quo with respect to the activities of the plaintiff company for storage of ATF facility and filling the ATF in the aircrafts at Terminal-I of IGI Airport. The defendant company is directed to file the letter dated 18th April, 2011 of DGCA on or before the next date of hearing and also supply a copy of the same to the plaintiff company within one week from today.

The DGCA is directed to conduct a fresh audit of

the airfield at Terminal-I of IGI Airport and submit a report within four weeks so as to whether the ATF storage facilities of the plaintiff and the facility of filling ATF by the plaintiff in the aircrafts at Terminal-I of IGI Airport, are detrimental to the security and safety of the aircrafts using the air field. The representative of the plaintiff as well as defendant will be associated while conducting audit in terms of this order."

8. Defendant No.1 filed its written statement and along with that also filed an

application under Order 39 Rule 4 read with Section 151 CPC to seek vacation of

the status quo order dated 13.5.2011 passed by this Court. Before this Court could

hear arguments on the said application moved by the defendant no. 1 under Order

39 Rule 4 CPC and stay application of the plaintiff, the DGCA filed its report

dated 3.6.2011 in compliance of the direction given by the Court vide order dated

13.5.2011. After having perused the said report, this court vide order dated

22.9.2011 gave further direction to DGCA to give a detailed report elucidating

para 5 of its report. The necessary clarification in compliance of the order dated

22.9.2011 was given by the DGCA vide its report dated 30.9.2011. The plaintiff

took leave of this Court to submit a fresh proposal for consideration of the

defendant no. 1 without prejudice to its rights and contentions and granting such

leave to the plaintiff, the Court directed the defendant no.1 to respond to such a

proposal within a period of 3 days after receiving it. Vide IA No. 19340/2011 the

plaintiff sought impleadment of DGCA as one of the defendants and by a detailed

order passed by this Court dated 9.12.2011, impleadment of DGCA as defendant

No. 2 was allowed. The Court felt that the presence of DGCA as a party to the

suit would be necessary before the Court takes a prima facie view on the said

issue of removal of ATF storage facility from the Apron area. Written statement

was also filed by defendant No.2 DGCA and replication thereto was also filed by

the plaintiff.

9. The defendant no. 1 raised various factual and legal objections in its

written statement. It referred to some of the provisions of the Aircraft Act, 1934,

namely Section 4 of the Aircraft Act, 1934 which enables the Central

Government to make rules to implement the Convention relating to International

Civil Aviation signed at Chicago on December 7, 1944 including any annex

thereto relating to international standards and recommended practices as amended

from time to time; Section 5A of the Aircraft Act, 1934 which empowers the

DGCA to issue directions for securing the safety of the aircraft operations and

also referred to some of the rules prescribed under the Aircraft Rules, 1937

namely, Rule 133 A of the Aircraft Rules, 1937 which empowers the DGCA to

issue directions relating to the operation, use, possession, maintenance or

navigation of the aircrafts; Rule 83 of the Aircraft Rules, 1937 which empowers

the DGCA to impose necessary conditions for granting or renewing the

aerodrome license in order to ensure compliance with the Convention and the

safety of the aircraft operations. In the light of the aforesaid legal provisions, the

defendant no. 1 took a stand that the defendant No. 2, DGCA is fully authorized

to carry out the inspection of the IGI Airport.

10. According to the defendant no. 1, the defendant no. 2 carried out an

aerodrome inspection of the IGI Airport during 27.2.2006 to 03.03.2006 as a part

of its licensing process and prepared a detailed inspection report. It is the case of

defendant No.1 that one of the non-compliance which was highlighted in the

subject report was that the minimum separation distance between the centre line

of taxiways used by wide bodied aircrafts and the plaintiff's installations was less

than the minimum required laid down separation distance of 47.5 meters.

11. Defendant No. 1 also referred to the detailed Civil Aviation Requirements

(CARs) issued by DGCA on 31.7.2006 under Rule 83(1) read with Rule 133A of

the Aircraft Rules, 1937 in respect of Aerodrome Design and Operations. After

giving reference to paras 1.2.2, 3.9.8 of the CAR dated 20.9.2006 which provides

for exemption procedure for non-compliances at aerodromes, the defendant no. 1

has taken a stand that the defendant no. 1 vide its letter dated 29.5.2007 requested

the plaintiff to remove its ATF facility and make alternative arrangement for

supply of fuel. Reminder letters dated 1.8.2007 and 23.8.2007 were also sent by

the defendant No. 1 reiterating its same request. The defendant no.1 also made

separate request to Indian Oil Corporation Ltd. (IOCL) to augment its storage and

pipeline facility at Palam so that the plaintiff could also supply its fuel after tying

up with the IOCL. As per defendant No. 1, on 21.4.2008, a meeting was held

between IOCL and the defendant no. 1 wherein IOCL agreed to augment its

Sadar Pipeline and in return the defendant no. 1 agreed to augment the tap off

point to accommodate the plaintiff and the HPCL at its own cost. According to

the defendant no. 1, it once again requested the plaintiff on 2.6.2008 to remove

the ATF facility at Terminal-1 and further warned that no tank lorries would be

allowed with effect from 1.9.2008.

12. It is also the case of defendant No. 1 that in order to amicably resolve the

issue, the DGCA convened a meeting, wherein the oil companies and Airport

operators were present on 22.7.2008 and after detailed discussions having taken

place in the said meeting, certain decisions were taken, one of the decision being

that defendant No.1 would invest and construct a tap off point and vehicle

parking station at Terminal-1 near the IOCL refueling facility to relocate

BPCL/HPCL. According to the defendant no. 1, as per the said decision, the

defendant No.1 completed the construction of new facility in 2009 at its own cost

of approximately Rs. 1 crore. It is also the case of defendant No.1 that the

plaintiff and HPCL failed to arrive at any understanding with the IOCL the same

being in breach of the understanding arrived at in the meeting held on 22.7.2008.

13. It is also the case of the defendant no. 1 that the defendant no. 1 also issued

a letter dated 3.9.2009 to the plaintiff thereby allotting an alternate area of 4400

sq. meters for filling ATF and bowser parking of the plaintiff and the HPCL at the

GSE parking area of the Indian Airlines at Domestic Terminal at the IGI Airport.

In the same letter the defendant No.1 also requested the plaintiff for initiating

action for relocating its operations on an immediate basis, but the plaintiff paid no

heed to the said request of defendant No.1. According to the defendant no. 1,

follow up request vide letter dated 3.10.2009 was also made by defendant No.1 to

the plaintiff but it was again of no effect.

14. It is also the case of the defendant No.1 that the plaintiff and IOCL are

using the same facility at Terminal- 3 of the same airport in an amicable manner

but so far the Terminal-1 of the airport is concerned, the plaintiff has not been

responding positive to the said proposal.

15. It is further the case of the defendant no.1 that a meeting was again held on

15.12.2010 wherein the DGCA reiterated its stand for the compliance of the

aerodrome license issued to the IGI Airport to remove the ATF facility of the

plaintiff and the HPCL located at Terminal-1 and accordingly the defendant no.1

again issued a letter dated 31.12.2010 to the plaintiff requesting it to stop the

operation of the ATF facility at Terminal-1 from 28.2.2011 and shut down the

facility by 15.03.2011. The defendant No.1 further requested the plaintiff to

restore the existing area to a ground level by 15.4.2011 and hand over the site by

16.4.2011. As per defendant No.1 another meeting was held between the plaintiff,

HPCL and IOCL on 22.2.2011 but the said oil companies again failed to arrive at

any amicable settlement and the said ground situation was explained by the

defendant no. 1 to DGCA vide letter dated 18.3.2011. It is the case of the

defendant No.1 that thereafter, DGCA vide letter dated 18.4.2011 advised the

defendant No.1 to issue notice to the plaintiff and HPCL for de-commissioning

their facilities within a period of two weeks of the notice and based on that

suggestion, defendant No.1 issued the notice dated 4.5.2011, which is the subject

matter of the present suit. (Various other objections have been raised by

defendant No.1 in their written statement and the same are not being referred to in

detail as being not relevant for the purposes of deciding the present applications)

16. In the written statement filed by defendant No. 2, the stand taken is that the

defendant No. 2 is a regulatory Authority established by the Central Government

to carry out functions concerning air safety, registration of civil aircrafts, devising

airworthiness standards, certification of aerodromes and licensing of air traffic

controllers. Defendant No. 2 is also empowered under Sections 4 and 5 of the

Aircraft Act, 1934 to frame rules for "regulating the manufacture, possession, use,

operation, sale, import or export of any aircraft or class of aircrafts and for

securing the safety of aircraft operations". Defendant No.2 has further taken a

stand that it primarily deals with air safety issues and is responsible for

implementing and enforcing air safety regulations. It is also the case of defendant

No. 2 that it has been empowered to issue Civil Aviation Requirements (CARs) in

accordance with the provisions enshrined in the Aircraft Rules, 1937 in order to

implement international safety requirements. It is also the case of defendant No. 2

that the facility of fuel storage has to move out of the apron area under any

circumstances whatsoever and defendant No.1 being the airport operator is under

an obligation to ensure expeditious relocation of the fuel site.

17. Defendant No. 2 also referred to the inspection of Airport carried out by

defendant No. 2 during 27.2. 2006 to 3.3.2006 when it was found that the fuel

storage facility on apron at Terminal-1 is not meeting the stipulated minimum

separation distance between the taxiway center line "C" and the existing ATF

facilities in accordance with the requirement of CAR Section 4, Series B, Part I,

Table 3-1. It is also the case of defendant No.2 that since the petitioner did not

choose to shift its ATF storage facilities despite repeated requests made by

defendant No. 1, the defendant No. 2 intervened for resolving the matter and

accordingly, meetings dated 22.7.2008 and 3.2.2011 were held with the stake

holders to find out an amicable solution for relocation of the storage facilities but

without any success.

18. Defendant No. 2 has further pointed out that in compliance with the

direction given by this Court vide order dated 13.5.2011, a fresh audit of the

apron, Terminal-1 at IGI Airport was carried out on 27.5.2011 when again it was

found that the said ATF facility and various other installations of the plaintiff did

not confirm to the stipulated minimum separation distance from the central line of

Taxiway "C". It is also the case of defendant No. 2 that they directed defendant

No. 1 to comply with the CAR provisions and thereafter defendant No. 1 had

issued a notice to the petitioner vide their letter dated 4.5.2011 stating therein

that any kind of activity in ATF storage facility would not be permitted from

15.5.2011.

19. Defendant No. 2 has also taken a categorical stand in its written statement

that ATF storage facility at Terminal-I is a threat to the safe and secure operations

of the Airport and poses a potential hazard for the aircrafts using the taxiway.

Defendant No. 2 has further submitted that despite the major flights operating

from Terminal -3, Terminal-I still continues to operate a large number of flights.

Defendant No. 2 has also submitted that threat to the security of aircrafts and

passengers cannot be ignored on the ground that only a few low cost airlines ply

on Terminal-1. Defendant No. 2 has further submitted that ATF facility

installation within the apron area is a safety hazard irrespective of density of

aircraft traffic on the apron.

20. Addressing arguments on behalf of the defendant no.1, Mr. Ashwini

Matta, learned Senior Advocate submitted that the jural relationship

between the plaintiff and the defendant no.1 is that of the licensee and the

licensor governed by the terms of the License Agreement dated 11.9.86

executed between the parties. Counsel also submitted that as the license of

the plaintiff was not renewed thereafter, the same came to be terminated on

31.12.1991 on the expiry of the five years extended period in terms of

supplementary License Agreement dated 9.10.87. Counsel also submitted

that since the license of the plaintiff was continuing therefore, at best the

relationship between the parties is still governed by the terms of the License

Agreement dated 11.9.86. Counsel also submitted that the plaintiff cannot

claim the license to be an irrevocable one on the ground that the plaintiff

executed works of permanent character at the site and incurred huge expenses

in the installation of the same, as under Clause 17 of the License Agreement,

the licensee has to comply with all the rules, regulations and directions issued

by the defendant no.1 or DGCA or any such other authority having jurisdiction

over the licensed premises at all times without raising any question or any

dispute. Counsel also placed reliance on Clause 24 of the License Agreement

which provides that in case the land licensed to the plaintiff is required by the

Authority for the purpose of airport development, the Authority may

determine the license by giving 90 days notice to the licensee, in which event,

licensee would be required to remove the permanent structures installed at the

land, restore the said land to its original condition and ultimately surrender its

peaceful possession to the Authority. In support of his arguments, counsel for

the defendant no.1 placed reliance on the cases Mumbai International Airport

Pvt. Ltd. v . Golden Chariot Airport & Anr., (2010) 10 SCC 422 and Ram

Sarup Gupta v. Bishun Narain Inter College & Ors. (1987) 2 SCC 555.

21. Counsel for the defendant no.1 further submitted that the defendant no.1

has no commercial interest in seeking removal of the plaintiff's ATF facility

from the apron area of the airport as the defendant no.1 has already created a

facility of tap off point at Terminal-I at a cost of approximately Rs. 1 crore in

terms of the decision taken in the Joint Meeting of the stake holders held on

26.7.2009, according to which, the plaintiff would have to avail the storage

facility of Indian Oil Corporation Ltd. (IOCL) outside the airport and pay some

charges directly to the IOCL. Counsel also submitted that since the new system

at Terminal 3, wherein the fuel is supplied through the hydrant system from tap

off point, is owned by the Joint Venture Company in which the plaintiff and

the IOCL are the highest equity holders, the plaintiff is already well-acquainted

with the system and has not to follow any new norms so far the Terminal-I is

concerned. Counsel further submitted that the defendant no.1 receives a

through put fee as on 2013 of INR 643.14/kl of the fuel uplifted at IGI Airport,

which is a fixed and uniform amount for all fuel suppliers at IGI Airport and as

the quantum of fuel uplifted always depends upon the number of aircrafts

operating from the Airport, the increase or decrease in the number of fuel

suppliers would not be of any benefit to the defendant no.1.

22. Counsel further submitted that the defendant no.1 being the holder of

aerodrome license is bound to comply with and give effect to the directions

issued by the defendant no.2 DGCA from time to time as per the mandate of

Aircraft Act, 1934 and the Rules framed thereunder and non-compliance with

any of the direction of the DGCA can result in cancellation of its aerodrome

license.

23. Counsel further submitted that the DGCA in Para 5 of its Audit Report

dated 3.6.2011 has given a finding that "presence of ATF facility installations

within the apron will remain a non-compliance and safety hazard irrespective of

density of aircraft traffic/congestion on the apron" and the said finding of the

DGCA cannot be said to be arbitrary, capricious or motivated so as to be

interfered with by this court. Counsel also argued that the DGCA is an expert

body to judge the aspects of the safety and security of the lives of the people at

the airport and therefore also this court may not interfere with the conclusion

arrived at by the said technical body. In support of this argument counsel has

placed reliance on the following judgments:-

           1. Joint   Action   Committee       of   Airline    Pilots


               Association of India & Ors. v. DGCA & Ors
              (2011) 5 SCC 435.

2. Sajeesh Babu v. N.K. Santhosh & Ors, Civil App No. 7599/2012.

3. Bajaj Hindustan Ltd. v. Sir Shadital Enterprise Ltd. & Anr (2011) 1 SCC 640.

4. Actech Information Systems Ltd. v. UOI & Ors.2008 VAD (Delhi) 321.

5. Yash Ahuja v. UOI & Ors. 2008 IX AD (Del) 373.

24. Counsel also argued that the defendant no.1 is not a 'State' under Article

12 of the Constitution of India. To support this argument, counsel submitted that

the defendant no.1 is neither created by any statute nor any financial assistance

is given to the defendant no.1 by the Government to meet the whole or any

part of its expenditure. Counsel further submitted that defendant no. 1 also does

not enjoy any monopoly status in the field of operation and management of the

airport. Counsel also submitted that there also does not exist any deep and

pervasive control of the Government on defendant no. 1 and the control, if any,

that the government exercises is merely regulatory in nature as applicable to other

bodies performing similar functions. Counsel also submitted that the functions

of the defendant no.1 are neither public functions nor are closely related to

governmental activities. Counsel lastly submitted that the defendant no. 1 is not

created by transfer of any government department but is an independent private

company. In support of his arguments, counsel placed reliance on the following

judgments:-

1. Pradeep Kumar Biswas v. Indian Institute of Chemical Biology (2002) 5 SCC 111.

2. Ajay Hasia v. Khalid Mujib Sehravardi (1981) 1 SCC 722

3. Zee Telefilms Ltd. v. UOI (2005) 4 SCC

25. Counsel also submitted that the plaintiff cannot allege any violation of

principles of natural justice on the part of the defendant no.1 in issuing the

notice dated 4.5.2011 as before writing the said notice, the defendant no.1

had been consistently issuing letters to the plaintiff for shifting its ATF

facility from the apron area. Counsel also submitted that, in fact, in the Joint

Meeting of the DGCA held on 22.7.2008, wherein the plaintiff, HPCL,

defendant no.1 and IOCL participated, the plaintiff had agreed to shift its

facility and in turn the defendant no.1 had also agreed to construct a tap off point

and vehicle station at Terminal-1. Counsel further submitted that in fact in

terms of the said assurance given by the plaintiff, defendant no. 1 constructed

the tap off point at a cost of Rs. 1 crore and even agreed to allot area to the

plaintiff and HPCL for topping of refuellers and parking of bowsers, but the

plaintiff later retracted from its assurance to shift its facility. Counsel also

referred to further meetings that took place between the parties on 15.12.2010

and 22.2.2011 and submitted that since the plaintiff failed to comply with the

directions given by the defendant no.1 and defendant no.2, the defendant

no.1 was left with no option but to issue the notice dated 4.5.2011.

26. Counsel also argued that the plaintiff and HPCL's ATF facility

installations covering an area of 61.5/68m are situated within the apron area

surrounded by the aircraft filling stand and the audit team constituted by

defendant no.2 physically verified that the minimum separation distance

between the taxi way from central land and plaintiff's ATF installations do

not confirm with the requirements of the laid down distances in terms of

CAR Section 4 B Part I Table 3-1. Counsel thus submitted that the existing

ATF facility installations of the plaintiff within the apron area and the

non-compliance of the minimum separation from the taxi way "C" Central

Land continues to be a safety hazard in respect of density of aircraft traffic

or congestion on the apron area of the Terminal-I.

27. Addressing arguments on behalf of defendant no.2, Mr. Rajiv Mehra,

Learned Addl. Solicitor General of India strongly contended that the DGCA is

basically concerned with the security and safety issues relating to aircraft

operations. Counsel submitted that the DGCA is a regulatory body established

by the Central Government and in terms of Section 4 & 5 of the Aircraft Act

1934, it is duly empowered to frame rules for regulating the manufacture,

possession, use, operation, import or export of any aircraft or securing the

safety of aircraft operations. Counsel for defendant No.2 also submitted that the

Indian Government is a party to the convention relating to the International Civil

Aviation, which was signed at Chicago on 7.12.1944, having ratified the same on

19.1.1955. Counsel also submitted that in the said Convention, an organization

with the name of International Civil Aviation Organization was formed with the

aim and objective to develop the principles and techniques of International Air

Navigation and to foster the planning and development of International Air

transport so as to achieve the laid down objectives, one of them being to ensure

safe, regular, efficient and economical air transport. Counsel further submitted

that defendant No. 2, being a part of the said International Aviation Organization,

takes into consideration various guidelines and norms laid down by the said

organization towards modernization and for better security and safety of its

Airports and the air passengers. Counsel invited attention of the Court to Section

5-A of the Aircraft Act, 1934 and Rule 133 A of the Aircraft Rules, 1937 in

support of his submissions. Counsel also invited attention of this Court to clause

3.4.7 of the Aerodrome Design manual to support his arguments that the fuel

farms of the plaintiff must be located outside the apron area of the Airport.

28. Counsel for defendant No. 2 further placed reliance on the three inspection

reports prepared by the technical audit team, the first report prepared in 2006 and

other two dated 3.6.2011 and 30.9.2011, to support his contention that ATF

facility of the plaintiff within the apron area poses a threat to the safety of the

passengers. Counsel also submitted that the facility of internal storage in the

apron area was provided in the year 1950, but now no such facility exists

anywhere in the world and therefore, there is nothing wrong in the decision of the

defendants to remove the plaintiff's ATF facility from the apron area and allow

the plaintiff to take hospitality of Indian Oil Corporation Ltd. for providing fuel to

the aircrafts of Terminal-1 from the tap off point.

29. Counsel also submitted that the defendant No.2 is a technical body and

therefore, this Court should give due weightage to the views given by the

technical experts who recommend shifting of the ATF facility from the apron area

of Terminal-1, Delhi Airport.

30. Counsel also submitted that the issue of safety is more important than

shifting of the ATF facility of the plaintiff from the apron area, as even with the

removal of the facility from the apron area; the plaintiff would continue to supply

the fuel to the aircrafts of Terminal-1 from the tap off point.

31. Combating the aforesaid arguments, Dr. Sudhir Chandra, Sr. Advocate

appearing for the plaintiff submitted that the said ATF facility of the plaintiff has

been in existence within the apron area for the last more than 50 years and the

defendants have never complained that the existence of the said ATF facility

within the apron area poses any safety threats to the passengers during all these

years. Counsel also submitted that the Rules only envisage about the requirement

of maintaining a particular distance of the storage facility from the central line of

taxiway "C" and the plaintiff has shown its total willingness to maintain such a

distance as per the laid down norms. Counsel submitted that the defendants have

come up with the suggestion to remove the plaintiff's ATF facility from the apron

area to achieve their commercial motives.

32. Counsel further submitted that the plaintiff has already given three

alternative proposals to the defendants for maintaining the minimum stipulated

separation distance so as to meet the distance norms prescribed under CAR and

even for shifting of the ATF fuel facility within the apron area, but none of the

proposals have been accepted by the defendants. Counsel also submitted that

issue of security has already been given up by the defendants while the issue of

safety as raised by the defendants is a bogey in the light of the said three

alternative proposals given by the plaintiff.

33. Counsel further submitted that license of the plaintiff is an irrevocable

license in terms of Section 60 of the Indian Easement Act, 1982 as acting upon

the license; the plaintiff has raised structure of permanent character by incurring

expenses out of its own pocket. Counsel thus submitted that having entered into

an irrevocable license, the plaintiff's ATF facility structure cannot be demolished

or removed from the site by the defendants.

34. Counsel further submitted that the defendants being an instrumentality of

'State' must not only act fairly but should also adhere to the principles of natural

justice which they have undeniably failed to observe. Counsel submitted that the

threatening action of the defendants to remove the ATF facility of the plaintiff

from the apron area is arbitrary and capricious. Counsel submitted that the notice

dated 4.5.2011 sent by defendant No. 1 is illegal on the very face of it as the same

fails to comply with the terms of the License Agreement dated 11.9.1986 which

prescribes the notice period to be of 90 days as against the 10 days' notice period

given in the impugned notice. Counsel submitted that even the defendant no. 2

has failed to serve a separate notice on the plaintiff.

35. Counsel also submitted that the aircraft traffic at Terminal-1 has reduced

considerably after the commissioning of Terminal-3, as a huge number of

aircrafts which earlier operated from Terminal-I have started operating from

Terminal-3 and hence the threat to the safety of the aircrafts, as alleged by the

defendants, is totally unwarranted and such a plea is raised by the defendants with

malafide intentions to throw out the plaintiff from the site in question.

36. Counsel further submitted that if the ad-interim injunction order granted by

this Court is not confirmed then it will result into causing serious loss, harm and

prejudice to the rights of the plaintiff, which neither can be assessed in terms of

money nor can be compensated by any other means. Counsel further submitted

that at the interim stage, the Court is required to take only a prima-facie view in

the matter and not direct the demolition of the structure which is in existence at

the site for more than 30 years.

37. Counsel also submitted that the defendant No.2, DGCA is not a competent

authority to assess the danger of fuel storage within the apron area and rather it is

the authority under the Explosives Act, which is competent and authorized to

analyze the safety aspects with regard to the existence of the ATF facility within

the apron area.

38. Counsel for the plaintiff placed reliance on the following judgments in

support of his aforesaid arguments:-

1. Ram Swarup Gupta (dead) by Lrs. Vs. Bishun Narain Inter college & Ors (1987) 2 SCC 555

2. Mahabir Auto Stores & Ors. Vs. Ludhiana Oil Corporation & Ors (1990) 3 SCC 752

3. BCCI & Anr. Vs. Netaji Cricket Club & Ors., 2005(4) SCC 741

39. I have heard learned counsel for the parties at considerable length and

given my anxious and thoughtful consideration to the arguments advanced by

them. I have also perused the various documents placed on record by both the

parties.

40. The plaintiff was granted a license in respect of land admeasuring

approximately 2464.06 sq.m., 529.27 sq.mts., 891.31 sq.mts. and 516.73 sq.mts.

for the purpose of service station and hydrant facilities vide License Agreement

dated 11.9.1986 duly executed by International Airport Authority of India for a

period of five years commencing w.e.f. 1.1.1982 till 31.12.1986. The yearly

license fee as was fixed between the parties was Rs. 1,65,051.37 which was

subject to revision w.e.f. 1.11.1985 and thereafter at an interval of every three

years or at such intervals as may be approved by the Board of International

Airport Authority of India. For better appreciation of the controversy in hand, the

relevant clauses of the License Agreement are reproduced as under:-

"1. This license shall commence on 01.01.1982 and shall be in force for a period of five years from 01.01.1982 to 31.12.1986 unless terminated earlier under the provisions of this agreement.

3. The rate of license fee payable by licensee shall be subject to revision by the Authority with effect from 01.11.1985 and thereafter at an interval of every three years or at such intervals as may be approved by the Board of International Airport of India from time to time and licensee agree to pay such revised license fee without any protest.

           6. The      licensee     shall  construct   the
           building/structure/installation   strictly    in

accordance with plans and specifications to be approved by the Authority in writing and conformity with such directions as the Authority may give in this behalf or in connection therewith.

11. The said land/building shall be deemed to be public premises as defined in the Public Premises (Unauthorized Occupants Evictions) Act, 1971 notwithstanding that the licensee has constructed a building on the said land.

17. The licensee shall observes at all times without any question or dispute all rules,

regulations and directions issued from time to time by the Authority and/or by Director General of Civil Aviation and such other authorities having jurisdiction over the locality wherein the premises are situated, which are intended to safeguard or facilitate the use of the locality by aircraft or for any other purposes.

           24. If the premises shall during the term of the
           license be required      by the Authority for the
           purpose     of Airport development of which the

Authority shall be the sole judge, the Authority shall be entitled by notice in writing giving 90 days time to determine the license and call upon the licensee to vacate the land/building/structures/installations. The licensee hereby agrees that within the period named in any such notice or any extension granted thereto, the licensee shall remove the structures and installations constructed by him and then standing on the licensee and foundation thereof as required by such notices and shall level and restore the land to its original condition and carry out all such work whenever so required to the satisfaction of the Authority and the licensee shall surrender and peacefully give up possession to the authority of the licensee premises as required in such notice.

25. In the event of termination of license by the Authority pursuant to notice under clause 24, the licensee shall be entitled to a compensation calculated on the following basis:

(a) In the case of movable structures, plants, machinery, or other installations, half of the actual expenses not including and supervision charges, incurred in the removing of such structures, plant, machinery, installations and other re-erection of the new site offered by the Authority (if no new site is offered, half of the probable expenses or re-erection), such compensation not to exceed half of the expense of the erection by the licensee of the structure or the installation upon the licensee premises and to be vacated by the licensee plus half of the expenses

of any authorized additions and alterations thereto.

(b) In the case of immoveable structure, a sum equal to the residual value of the structures elected or in course of erection by the licensee upon the licensed premises and of any authorized addition or alternation s thereto, such residual values being the cost of construction multiplied by a fraction expressing the reaction of the number of years remaining unexpired to the terms of 5 years hereby granted and the cost of construction being the amount as may be agreed by the Authority and the licensee as the actual cost of the erection of the said structure including any fixtures, or electric, water supply and sanitary fittings or furniture within the said structures of machinery, tanks, pipelines or other removable equipment.

The licensee shall have no further claim whatsoever for compensation against the Authority arising out of or in consequence of the service of such notice to vacate the said plot(s) of land hereby licensed.

26. If the licensee shall desire to determine this agreement he shall give the Authority 90 days clear notice in writing of such desire and shall upto the time of such determination pay the amounts due and perform and observe the covenants on his part therein before contained, then immediately on the expiration of such notice, this license shall cease but without prejudice to the rights remedies to which the Authority has become entitled in respect of any antecedent claim or beach of the covenant.

27. If the license fee hereby reserved or any part thereof shall be unpaid for 30 days after becoming payable or if any covenant on the part of the licensee shall not be performed or observed and the licensee after receiving reasonable notice in writing from the Authority has failed to remedy such breach of covenant or if the licensee shall go into liquidation (sage for purpose of amalgamation or reconstruction) it shall be lawful for the Authority any time to terminate this license and to

re-enter upon the licensed premises or any part thereof and the licensee shall on such termination peacefully give up possession of the licensed premise and all buildings and erection standing thereon to the Authority without any right to compensation whatsoever and thereupon this license shall absolutely determined but without prejudice to the right of action of the Authority in respect of any antecedent breach of the licensee‟s covenants herein contained.

PROVIDED ALWAYS AND IT IS HEREBY AGREED AND DECLARED that in the event of the determination of this license by forfeiture for no-

payment of license fee as aforesaid, if the licensee pays to the Authority the license fee in arrears together with the interest and costs at any time before the actual hearing of the legal proceedings to enforce for such forfeiture, the licensee shall been titled to be relieved against such forfeiture.

28. In the case of such breach of the terms of this licensee minor offences and complaints coming to its notice for which opinion of the Authority this agreement need not be terminated, the Authority may at its discretion recover compensation from the licensee up to the limit of the security deposit of the licensee. The decision of the Authority in this respect shall be final and binding on the licensee.

29. In the event of the Airport falling into disuse, or being moved into another site, this license shall ipso factor terminate as from the date of such happening and the licensee shall be absolved from payment of any further license fee under the agreement and shall be at liberty to remove all their buildings etc. installed upon the premises.

30. If the Airport falls into disuse or is moved to another site, then the Authority shall not be liable to pay any compensation to the licensee. However, in the event of the airport being moved to another site the Authority may in its absolute discretion

although it is not obliged to do so, offer the licensee a suitable plot of land on the new site on the same terms and conditions as provided under the agreement.

31. The following provisions shall also apply with regard to the buildings/structures and fixtures put up by the licensee on the land belonging to the Authority:

(a) The licensee has a right to remove any materials or buildings on the site within 30 days of the expiry of the license unless extended provided that if the licensee has failed to so remove any material/buildings/installations or equipment on the site, they shall become the property of the Authority without payment of any compensation therefore and the licensee shall have no further claim thereto. The licensee shall make good any damage caused to the site in removing buildings/structures/installations. Provided further that in case the Authority desires to acquire the said buildings/structures/installations.

Provided further that in case the Authority desires to acquire the said buildings/structures/installations and convey its decision not less than one calendar month before the expiry of the period of license and offers to pay as compensation therefore an amount of money to be stated therein, the licensee shall on the expiry of the license surrender and hand over possession to the Authority of the said buildings/structures/installations and receive the said compensation. In case the licensee disputes the adequacy of the said compensation, the same shall be referred to arbitration as herein provided but notwithstanding the reference of the disputes to arbitration, the building/structures/installations shall be handed over to the Authority by the licensee on the expiry of the license.

(b) In the vent of determination of this license on account of the breach of the terms and conditions of this license, the buildings and structures shall vest absolutely in the Authority, without any liability for payment of any compensation to the

licensee.

(c) In the event of determination of the licensee pursuant to notice under clause 24 thereof, the licensee shall be entitled to retain the compensation payable under clause 25 without any obligation to accept the new plot of land offered."

41. The aforesaid license of the plaintiff was extended for a further period of

five years w.e.f. 1.1.1987 on the same terms and conditions on the payment of

the revised license fee vide supplementary agreement dated 9.10.1987 duly

executed between the parties. It is not in dispute between the parties that no

further agreement in writing was executed between them although the plaintiff

continued to supply the Aviation Turbine Fuel (ATF) from the licensed premises.

However, the plaintiff has claimed that an irrevocable license was granted by the

licensor in favour of the plaintiff as under the terms of the License Agreement the

plaintiff was permitted to raise permanent structures by incurring its own

expenses in terms of Section 60(b) of the Indian Easement Act, 1882.

42. Section 52 of the Indian Easement Act, 1882 defines license, while Section

60 of the said Act enumerates two situations in which the license can be regarded

as an irrevocable license. Both these provisions are reproduced as under:-

52. "License" defined-

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.

60. License when revocable-

A license may be revoked by the grantor, unless

(a) it is coupled with a transfer of property and such transfer is in force;

(b) the licensee, acting upon the license, has executed a work of a permanent character and incurred expenses in the execution.

43. From the aforesaid definition of license as envisaged under Section 52 of

the Indian Easement Act, 1882, it can be inferred that the license means grant of a

right, by a person to the other, 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 for the other to do and such right does not amount to an easement or an

interest in the property. The right so conferred is license. The grant of license may

be express or implied which can be inferred from the conduct of the grantor.

License may be purely personal, gratuitous or contractual.

44. In the facts of the present case, the plaintiff has claimed its license to be an

irrevocable license by virtue of Section 60 of the Indian Easement Act, 1882 as

under the terms of the License Agreement, the plaintiff was permitted to execute

works of permanent character after incurring its own expenses in the execution

thereof. It is not in dispute between the parties that the plaintiff itself erected the

structure of permanent character i.e. fuel storage tanks etc. at the licensed site by

incurring its own expenses. Therefore, the moot question that arises in the present

case is whether in the teeth of the aforesaid terms and conditions of the License

Agreement, which clearly restricts the rights of the licensee and in fact spells out

the circumstances under which the licensor can terminate the license of the

plaintiff and take over the entire land including the structure existing thereon and

also order demolition of such structures, yet such a licence can be said to be an

irrevocable license. As already discussed above, the revocability or irrevocability

of the license in terms of Section 60(b) of the Indian Easement Act, 1882 would

depend upon the express or implied terms of the contract entered into between the

parties and if revocability of the license can be inferred from the terms of the

contract entered between the parties while keeping in mind the other surrounding

facts and circumstances, then the license will not be termed as irrevocable even if

the licensee has executed work of permanent character on the licensed land.

Explaining the principle behind Section 60 of the Act, the Hon'ble Supreme

Court in the case of Ram Sarup Gupta (dead) by LRs v. Bishun Narain Inter

College and others reported in 1987(2) SCC 555 in following Para held as under:

9. License as defined by Section 52 of the Act means grant of permission, by a person to the other, 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. Such right does not amount to an easement or any interest in the property. The right so conferred is license. The grant of license may be express or implied which can be inferred from the conduct of the grantor. Section 60 provides that a

license may be revoked by the grantor unless; (a) it is coupled with a transfer of property and such transfer is in force; (b) the licensee, acting upon the license, has executed a work of permanent character and incurred expenses in the execution. Revocation of license may be express or implied.

Section 62 enumerates circumstances on the existence of which the license is deemed to be revoked. One of such conditions contemplate that where license is granted for a specific purpose and the purpose is attained, or abandoned, or if it becomes impracticable, the license shall be deemed to be revoked. Section 63 and 64 deal with license's right on revocation of the license to have a reasonable time to leave the property and remove the goods which he may have placed on the property and the licensee is further entitled to compensation if the license was granted for consideration and the license was terminated without any fault of his own. These provisions indicate that a license is revocable at the will of the grantor and the revocation may be expressed or implied. Section 60 enumerates the conditions under which a license is irrevocable. Firstly, the license is irrevocable if it is coupled with transfer of property and such right is enforced and secondly, if the licensee acting upon the license executes work of permanent character and incurs expenses in execution. Section 60 is not exhaustive. There may be a case where the grantor of the license may enter into agreement with the licensee making the license irrevocable, even though, none of the two clauses as specified under Section 60 are fulfilled. Similarly, even if the two clauses of Section 60 are fulfilled to render the license irrevocable yet it may not be so if the parties agree to the contrary. In Muhammad Ziaul Hague v. Standard Vacum Oil Company, 55 Calcutta Weekly Notes 232 the Calcutta High Court held that where a license is prima facie irrevocable either because it is coupled with a grant or interest or because the licensee erected the work of permanent nature there is nothing to prevent the parties from agreeing expressly or by necessary implication that licence nevertheless shall be

revocable. On the same reasoning there is nothing to prevent the parties agreeing expressly or impliedly that the license which may not prima facie fall within either of the two categories of license (as contemplated by Section 60) should nevertheless be irrevocable. The same view was taken by Das, J. (as he then was) in Dominion of India v. Sohan Lal AIR 1950 EP 40. Bombay High Court has also taken the same view in H.F. De Souza v. Children's Education Uplift Society AIR 1959 Bom 533 . The parties may agree expressly or impliedly that a license which is prima facie revocable not falling within either of the two categories of license as contemplated by Section 60 of the Act shall be irrevocable. Such agreement may be in writing or otherwise and its terms or conditions may be express or implied. A license may be oral also in that case, terms, conditions and the nature of the license, can be gathered from the purpose for which the license is granted coupled with the conduct of the parties and the circumstances which may have let to the grant of the license.

45. It has been agreed between the parties under Clause 27 of the License

Agreement that if any covenant on the part of the licensee is not performed or

observed and the licensee after receiving reasonable notice in writing from the

licensor fails to remedy such breach of covenant, then it shall be lawful for the

licensor to terminate the license at any time and re-enter upon the licensed

premises and further that on such termination it would be incumbent upon the

licensee to give possession of the licensed premises to the licensor including all

buildings and erection standing thereon without any right of compensation

whatsoever. Under Clause 31 of the License Agreement, the licensee has been

given a period of 30 days from the date of expiry of the license, to remove any

material or building from the site and on its failure to remove such building,

installation etc., the same shall become the property of the licensor without

payment of any compensation to the licensee. There is yet another clause i.e.

Clause 11 of the License Agreement, which clearly states that land/building shall

be deemed to be public premises as defined in the Public Premises (Unauthorized

Occupants Evictions) Act, 1971 notwithstanding that the licensee has constructed

a building on the said land and this clause by itself is sufficient to show that the

parties never intended to create irrevocable license in favour of the licensee even

though the licensee was permitted to erect a structure of permanent nature on the

licensed land. In the light of the clauses contained in the License Agreement, this

Court is not persuaded by the argument of the counsel for the petitioner that the

license of the petitioner was irrevocable in terms of Section 60(b) of the Indian

Easement Act, 1882. In fact the terms and conditions of the License Agreement

dated 11.9.1986 read with supplementary agreement dated 9.10.1987 clearly

demonstrates that the license of the petitioner was revocable due to non-

adherence/non-fulfillment of various obligations casted upon it. The raising of the

structure of permanent character at the licensed site by the plaintiff will not render

the license irrevocable in the face of aforementioned terms and conditions of the

Lease Deed which clearly reflect that the parties had agreed upon the contrary.

Here, one can also not lose sight of the fact that no further extension in writing

was granted by the licensor in favour of the plaintiff after the execution of the

supplementary agreement dated 9.10.1987 and nor the plaintiff took any steps to

seek renewal of its License Agreement on the expiry of 5 years license period in

terms of the supplementary agreement dated 9.10.1987, which came to an end on

the date 31.12.1991. Therefore, the plaintiff cannot claim itself to be a licensee in

terms of Section 60(b) of the Indian Easement Act, 1882 by any stretch of logic.

46. Dealing with the next issue of controversy, whether the defendant no. 1

behaved in an arbitrary fashion and violated the principles of natural justice in

issuing the notice dated 4.5.2011 against the plaintiff. Vide impugned notice

dated 4.5.2011, defendant No. 1 called upon the plaintiff to discontinue its

activities in relation to the storage of ATF and the movement of tanks and trucks

and parking of browsers in the proximity of taxi way "C" Terminal-1 apron area

from 15.5.2011. Defendant No.1 further notified the plaintiff that after 15.5.2011,

no activities at the apron area shall be allowed and if the plaintiff still continues to

operate from the apron area then it shall demolish all the structures and premises

of the plaintiff's ATF facility at the apron area.

47. Although this notice was issued by defendant No. 1 in the first week of

May, 2011 but there is a long history of about 5 years attached to this issue during

which various deliberations and correspondences had taken place between the

parties. The whole controversy started after the inspection of the IGI Airport was

carried out by the audit team of DGCA from 27.2.2006 to 3.3.2006 for the

purpose of issuing aerodrome license, when in the said report it was observed by

the DGCA that the said ATF facility of the plaintiff and that of HPCL were not

maintaining the minimum separation distance from the taxi way "C".

48. The then Airport Authority of India, in response to the said audit report,

submitted its status report vide its letter dated 17.3.2006, informing the DGCA

about various actions taken by it in furtherance of the observations made by the

DGCA in the said audit report. Its status with regard to the requirement of

maintaining the minimum stipulated distance between the central line of taxiway

"C" and the ATF facility of the plaintiff was articulated in Column 12 of the

report, whereby it was informed that the issue of shifting the fuel dump from the

apron area was being taken up by the authority with the oil companies to provide

them with an alternative site. In the meanwhile, DGCA issued Civil Aviation

Requirements (CARs) dated 31.7.2006 and 20.9.2006 in respect of aerodrome

design & operations and the exemption procedure for non-compliance of the

requirements at aerodromes. Thereafter, after taking over the IGI airport, the

defendant No. 1 vide its letter dated 29.9.2006 sought exemption from DGCA in

so far as non-compliance of requirement of maintaining the minimum stipulated

distance between the central line of taxiway "C" and the installation of ATF

facility by the plaintiff was concerned. But as the said requirement was necessary

to be complied with ultimately, the defendant no. 1 started taking steps to solve

the said issue of non-conformity amicably. In pursuance thereof, the defendant

no. 1 wrote letters dated 29.5.2007, 1.08.2007 and 23.8.2007 to the plaintiff

requesting it to shift its ATF facility from the apron area to some alternate site. It

would also be pertinent to refer to the minutes of the meeting which had taken

place between the stake holders, on the said issue of relocation of the filling

stations of the plaintiff, and of HPCL from Terminal-1. Minutes of the said

meeting which was held in the office of defendant No. 2 i.e. DGCA on 22.7.2008

are reproduced as under:-

1. DIAL has stated that the matter had been taken with BPCL & HPCL on several occasions pursuing for relocation of their fuel depots. The Fuel Vendors had been requesting for alternate location to put up their establishments which couldn‟t be acceded due to space constraint. In the meeting, DIAL further proposed that BPCL and HPCL can be provided space for parking of refuellers in the nearby area alongside IOC and to utilize tinkering facility from IOCL as per the hospitality agreement amongst these agencies being followed at all places.

2. DG asked IOCL whether it was open to providing hospitality to BPCL/HPCL and likely time frame for set up the added facility for the above purpose. IOCL informed that it was willing to provide hospitality to both BPCL/HPCL provided separate space was provided by DIAL to BPCL/HPCL for topping up of refuellers and parking of their bowzers. DIAL confirmed that additional space would be provided to BPCL/HPCL for parking of their vehicle and the topping of refuellers. The

space identified for BPCL/HPCL was the NACIL GSE area at domestic apron.

3. DG wanted DIAL to provide parking space to BPCL/HPCL commensurate with their existing space allocated to them (excluding the tankage). DG further made it pertinent to DIAL that they would follow up the matter for relocation of NACIL‟s GSE facility for facilitating the space requirement of BPCL and HPCL.

4. BPCL stated that they wanted additional space for development of new underground tankage in lieu of the existing underground facility, failing which they wanted to setup a new pipeline from its fuel tank at T2 along the northern periphery of the Airport to the domestic apron at their own cost of approx Rs.25 Crores.

DIAL observed that it was no longer on environmentally acceptable practice to setup on underground fuel storage tank. DG wanted DIAL may consider the BPCL proposal for laying the peripheral pipeline, provided the same is feasible and doesn‟t affect the overall Master Plan of IGI Airport, Delhi.

5. IOCL clarified that the total cost of augmenting their facility to provide hospitality to provide BPCL/HPCL would be about Rs. 3 Crores. DIAL also clarified that the cost of setting up northern peripheral pipeline from BPCL international facility would be approximately Rs. 25 Crores, and post 2010 when most full fare airlines would shift to Terminal 3, this facility would become underutilized. In response, the BPCL representative stated that the cost will be borne by them and the project is likely to be completed within four to six months against the proposal of IOCL which would take six to eight months for its completion. Further, HPCL can also provide fuel on the hospitality basis as is being done presently in the domestic terminal.

6. DG asked HPCL whether they had any object to availing the hospitality of IOCL. HPCL representative stated that they have no objection availing the hospitality of IOCL if alternate refuelling facility is provided by DIAL to them.

The meeting concluded with the following decisions and actions to be taken:

a. BPCL/HPCL have agreed to relocate their airfield fuel storage from the present location in the domestic apron to the location proposed by DIAL also in Domestic Apron.

b. DIAL would relocate Air India‟s GSE parking area and provide the said parking land to both BPCL/HPCL commensurate with their existing facilities (excluding tankage).

c. In the interim period, IOCL would augment its facility and offer hospitality to BPCL/HPCL within 4 to 6 months for BPCL/HPCL to avail hospitality for refuelling.

d. DIAL will facilitate to the extent possible BPCL‟s proposal for laying the peripheral pipeline, provided the same is feasible and doesn‟t affect the overall Master Plan of IGI Airport, Delhi.

49. To follow up the said decisions as were taken in the said meeting, letters

dated 3.9.2009 and 3.10.2009, copies of which have been placed on record, were

sent by defendant No. 1 to the plaintiff but the plaintiff failed to act upon the

understanding arrived at between the oil companies in the aforesaid meeting.

Thereafter, another meeting was held on 22.2.2011 between stake holders and

again the issue could not be amicably resolved between the oil companies.

Ultimately, DGCA vide letter dated 18.4.2011 called upon the defendant No.1 to

issue notice to the plaintiff and HPCL for de-commissioning their ATF facilities

from the licensed site within a period of two weeks and further asked the

defendant no. 1 to initiate action against the said oil companies in case they fail to

comply with the given directions. It is in compliance with such direction given by

the DGCA that the defendant No. 1 issued the notice dated 4.5.2011 against the

plaintiff. It is thus seen that sufficient time was given to the plaintiff to shift its

ATF facility from the apron area but the plaintiff did not take any steps in that

regard even after a separate tap off point was commissioned by the defendant no.

1. In such circumstances, it cannot be said that the defendant no. 1 acted

arbitrarily or did not follow the principles of natural justice in issuing the

impugned notice to the plaintiff.

50. As far as power and authority of DGCA to issue such directions on the

defendant no. 1 is concerned, it is an undeniable fact that DGCA is a regulatory

body governing the safety aspects of the civil aviation in India. It is the DGCA

alone which has been entrusted with the responsibility of licensing various

aerodromes in the country in accordance with Part XI of Aircraft Rules 1937;

developing and issuing orders, rules, advisory circulars and guidance material in

relation to aerodrome standards and practices; reviewing plans and designs for

new aerodromes or further development of, or modification of existing

aerodromes to ensure the requirements of DGCA and ICAO are complied with;

carrying out surveillance inspection and safety oversight of aerodromes to

ascertain that the conditions as mentioned in the aerodrome license under Part XI

of the Aircraft Rules, 1937 are complied with; etc. Relevant provisions of the

Aircraft Act, 1937 and the Rules framed thereunder are extracted below:-

UNDER AIRCRAFT ACT, 1937

5. Power of Central Government to make rules.- (1) Subject to the provisions of section 14, the Central Government may, by notification in the Official Gazette, make rules regulating the manufacture, possession, use, operation, sale, import or export of any aircraft or class of aircraft and for securing the safety of aircraft operation.

5A. Power to issue directions- (1) The Director- General of Civil Aviation or any other officer specially empowered in this behalf by the Central Government may, from time to time, by order, issue directions, consistent with the provisions of this Act and the rules made thereunder, with respect to any of the matters specified in clauses (aa), (b), (c), (e), (f), (g), (ga), (gb), (gc), (h), (i), (m) and (qq) of sub-section (2) of section 5, to any person or persons using any aerodrome or engaged in the aircraft operations, air traffic control, maintenance and operation of aerodrome, communication, navigation, surveillance and air traffic management facilities and safeguarding civil aviation against acts of unlawful interference], in any case where the Director- General of Civil Aviation or such other officer is satisfied that in the interests of the security of India or for securing the safety of aircraft operations it is necessary so to do. (2) Every direction issued under sub-section (1) shall be complied with by the person or persons to whom such direction is issued.

Section 5(2)(b) provides for "the licensing, inspection and regulation of aerodromes, the conditions under which aerodromes may be maintained, the prohibition or regulation of the use of unlicensed aerodromes"; and

Section 5(2)(m) provides for "the measures to be taken and the equipment to be carried for the purpose of ensuring the safety of life"

                UNDER AIRCRAFT RULES, 1937

                133A.     Directions     by    Director-General-

(1) The Director-General may, through Notices to Airmen (NOTAMS), Aeronautical Information Publication, Aeronautical Information Circulars (AICs), Notices to Aircraft Owners and Maintenance Engineers and publication entitled Civil Aviation Requirements, issue special directions not inconsistent with the Aircraft Act, 1934 or these rules, relating to the operation, use, possession, maintenance or navigation of aircraft flying in or over India or of aircraft registered in India.

83. Conditions governing the grant of licence

- (1) An aerodrome licence shall be granted or renewed subject to such conditions as the Director-General considers necessary to ensure compliance with the Convention and the safety of aircraft operations.

(2) While a licence is in force, no alterations to the landing area or to the buildings or other structures on the aerodrome which may affect the safety of aircraft shall be undertaken save with the previous approval of the Director-General and application for such approval shall be addressed to the Director- General and shall be accompanied by full particulars with plans of any such alterations including alterations to surrounding obstructions which may affect the safety of aircraft.

(3)The necessary approval may be granted or withheld and if granted may be granted subject to such conditions (including conditions involving a revision of the original conditions of licence) as the Director-General may think fit.

(4) If any alteration of the nature referred to in sub-rule (2) is undertaken without the previous approval of the Director-General, the licence may be cancelled.

(5) The licensee shall maintain the aerodrome in a fit state for use by aircraft and adequately marked to the satisfaction of the Director General during the whole period of the currency of the licence and shall, if the aerodrome becomes unserviceable, immediately notify the Director-General.

51. The aforesaid legal provisions clearly demonstrate the fact that the DGCA

is a competent authority fully empowered to issue directions which includes

directions in the form of Civil Aviation Requirements(CARs) with regard to the

operation, use, possession, maintenance or navigation of aircraft flying in or over

India or of aircraft registered in India. Dealing with the challenge made to some

of the Civil Aviation Requirements(CARs) issued by DGCA, which were the

subject matter of controversy in the case of Joint Action Committee of Airline

Pilots v. Director General of Civil Aviation, 2011 (5) SCC 435, the Hon'ble

Apex Court held that the DGCA has ample powers to issue such directions in

exercise of its power under Rule 133 A r/w Sections 4A, 5, 5A of the Act

provided such executive instructions do not run contrary to the statutory

provisions or whittle down the effect of the statutory provisions. The relevant

Para of the judgment is reproduced as under:-

"17. CAR 2007 is neither a statute nor a subordinate legislation. The provisions contained in section 4-A, 5 and 5-A of the 1934 Act and Rules 42-A and 133-A of the 1937 Rules make it evident that the same are merely executive instructions which can be termed as "special directions". The executive instruction can supplement a statute or cover areas to which the statue does not extend, but it cannot run contrary to the statutory provisions or whittle down their effect. (vide State of M.P. v. G.S. Dall & Flour Mills, 1992 Supp (1) SCC 150).

...

22. Thus, it is evident from the above that executive instructions which are issued for guidance and to implement the scheme of the Act and do not have the force of law, can be issued by the competent authority and altered, replaced and substituted at any time. The law merely prohibits the issuance of a direction, which is not in consonance with the Act or the statutory rules applicable thereunder."

52. The relevant Civil Aviation Requirements (CARs) issued by DGCA under

Rule 83(1) read with Rule 133 A of the Aircraft Rules, 1937 which are subject

matter of controversy in the present case are reproduced as under:-

Para 1.2.2 of CAR dated 31.7.2006-

"at an existing aerodrome where the standards set forth in this CAR are not complied with, must be identified and

exemption from the DGCA may be sought by the license holders with submission of the plan or time scale to bring the facility in compliance with the standards. The plan and the time scale shall be recoded in part (c) of the aerodrome manual after the approval of the DGCA."

Para 3.9.8-"the separation distance between the centreline of the taxiway and the centreline of the runway, the centreline of a parallel taxiway or an object shall not be less than the appropriate dimension specified in Table 3.1 except that it may be permissible to operate with lower separation distance at an existing aerodrome if an aeronautical study indicates that such lower separation distances would not adversely affect the safety or significantly affect the regularity of operations of aeroplanes."

53. These CARs provided for the exemption procedure for non-compliance of

the requirements at aerodromes and also for the requirement of maintaining a

minimum separation distance between the Centre-line of the taxiway and the

Centre-line of the runway at the airport.

54. A bare perusal of the above legal provisions and the authority cited, thus,

take us to the conclusion that the DGCA being an autonomous authority has full

discretion to issue directions to the concerned airport authority to ensure the safe

and secure operations of the civil aviation in India and issuing CARs is one such

step to achieve the aforesaid objective. Such CARs have to be mandatorily

complied with by the licensees, the non- compliance of the same could otherwise

lead to the cancellation of their license by virtue of section 83(1) read with

section 133A of the Aircrafts Rules, 1937.

55. Having said so, coming to the meat of the matter now- Whether the

existence of ATF facility of the plaintiff and the infrastructure attached therewith

within the apron area poses any security and safety threats to the airport

operations necessitating removal of the plaintiff's said facility from the apron

area.

56. Civil Aviation is the fastest growing arm of the India's transport

infrastructure. During the last one decade the civil aviation sector has grown at a

phenomenal pace and India has emerged as one of the largest civil aviation

market in the world. The airport operations in India have expanded considerably

not only in terms of domestic passenger volume but also in terms of number of

operational airports, passenger handling capacity and air cargos and to meet such

an unprecedented growth in aviation sector, improvement of infrastructure

facilities on several fronts is the need of the hour. There is an urgent need for

India to have world class gateway airports providing aviation services and

passenger/ cargo facilities of global standards in a safe and secure environment.

The government and the concerned authorities need to put an effort towards

optimum utilization of the existing airports by addressing the problems of

outdated terminal infrastructure, inadequate ground handling systems and poor

passenger amenities without compromising on the security and safety aspects.

57. Working on the same lines, with a view to ensure a safe and danger-free

environment at the Terminal-1 of the IGI airport, which now needs to be

developed and modernized to keep pace with the growing needs of the society at

large, inspection of the Terminal-I of the airport was carried out by the expert

team of DGCA in the year 2006. The relevant portion of the report, under the

heading TAXIWAYS, is reproduced as under:-

           "2.5     TAXIWAYS

           2.5.1.    xx xx xx

           2.5.2     xx   xx xx

2.5.3 The distance between the centerline of Taxi lane „C‟ (used by wide body aircraft) and Bharat Petroleum Installation is 36.5 m instead of 42.5 m."

2.5.4 xx xx xx..."

58. On the first date of hearing in the present suit, the DGCA was called upon

by the court, to conduct a fresh audit of the airfield at Terminal-1 of IGI Airport

so as to determine as to whether the presence of the ATF storage facility of the

plaintiff at Terminal-I of IGI Airport is detrimental to the security and safety of

the aircrafts using the air field. The court also directed that representatives of the

plaintiff as well as the defendant to be associated with the expert team of the

DGCA while conducting audit in compliance of the said order. Fresh audit was

accordingly conducted by the expert team of DGCA in association with the

representatives of the plaintiff and the defendant. For better appreciation, the

relevant observations of the said audit team in their report dated 27.5.2011 are

reproduced as under:-

"2. Audit team carried out the site inspection of the Apron. The BPCL and the HPCL ATF facility installation covering an area of 61.5*68 m are situated within the Apron surrounded by the aircraft parking stands. The apron is located between runway 27/09 and runway 28/10 (refer Annexure2). The Apron Taxiway "C" designed for code E type of aircraft is running on the western side of the BPCL ATF facility installation. The taxiway "C" serves the dual purpose of Apron Taxiway connecting the above mentioned two runways and Aircraft Stand Taxi land for aircraft parking stands on the apron in Terminal-I. The operating Code D and E aircraft using the taxiway "C" are found not meeting the minimum separation distance requirement between object and Apron Taxiway/Aircraft Stand Taxi lane under the provisions of Civil Aviation Requirement (CAR) Section 4 Series B Part-1 Table 3-1"

59. Vide orders dated 22.9.2011 this Court gave further direction to the DGCA

to submit a detailed report elucidating Para 5 of its audit report dated 27.5.2011.

In compliance of this direction, an additional report dated 30.9.2011 was filed by

the DGCA through their Director, Aerodrome Standards elucidating Para 5 of

their earlier report and relevant portion of the additional report is reproduced as

under:-

"The above referred report filed by this office was mainly based on the following two issues contained in the Hon‟ble court order dated 13th May 11.

i) Whether the existing fuelling facilities of M/s BPCL at terminal-I of IGI Airport is detrimental to the safety of the aircraft operations.

ii) Whether the reduction of the number of aircraft movements or congestion of the aircraft on the apron reduces the risk.

Para 5 basically addresses the second part of the court order. The safety concerns related with the presence of installation in the middle of the apron are detailed below.

(a) There are two active taxiways/taxilanes i.e. „C‟ and „A‟ on the West and East side of the fuelling facility respectively and aircraft stands all around the facility.

(b) Any installation within active apron is considered a hazard and constitutes risk to the aircraft operations, whereas the installation in question is a facility where fuel is stored and fuel bowsers/vehicles are parked.

(c) Due to its presence in the middle, the oil tankers from outside are required to come inside the airport and thereafter fuel is transferred to the underground fuel tanks.

(d) Having such installation in the middle of an active apron, having continuous aircraft movements with passengers on board, is considered unsafe and undesirable because of inherent risks involved with the kind of operations being undertaken there.

(e) Further, the jet blast caused by aircraft movements around the fuelling facilities, ramp handling operations involving number of personnel and vehicles in boarding and de-boarding of passengers, baggage loading and offloading close to the fuel storage area induces further risk.

Conclusion Although the non-compliance can be addressed by

shifting the objects in the fuel farm to a distance of 47.5 m from taxiway centre line, in view of the safety concerns discussed above, relocation of the facility from the apron area is recommended."

60. The plaintiff also gave certain alternative suggestions so as to maintain

their ATF facility within the apron area after the perusal of the additional audit

report dated 30.9.2011 of the DGCA, which was again not agreeable to the

defendant No. 1. The relevant contents of the letter dated 6.12.2011 issued by the

defendant no. 1, containing the response to the proposals offered by the plaintiff,

are reproduced as under:-

"Having given anxious consideration to the proposals, in view of the requirements of the Master Plan for the Airport, DIAL is unable to accede to the proposals put forth by the BPCL in the aforesaid affidavit except that if BPCL at their own cost establish their own storage/ tankage facility outside the Airport site(as defined under OMDA) and links the same( BPCL‟s cost) to the tap off point already provided by DIAL( Mark "X" in the map annexed hereto as Annexure I). DIAL would be willing on similar treatment basis to license to BPCL, the tap off point at Mark "X" above.

Alternatively, DIAL has no objection if BPCL and IOCL agree to enable BPCL to draw fuel from the tap off point at Mark "X" connected to current Tap off point Mark "Y"(in the map annexed hereto as Annexure A) by either using current storage/tankage facility of IOCL or establish another such facility for BPCL and connect the same( at BPCL‟s cost) to the Tap off point at Mark "Y"."

61. With the aforesaid observation of defendant no.1 that has been guided by

the views taken by the expert audit team of the DGCA, which has been consistent

in its findings right from the very first date of inspection that was carried out by

its team in 2006, there remains no lingering doubt in the mind of the court

that the existence of plaintiff's ATF facility along with its operations of

browsers and fuelling tanks at the apron area of Terminal -I can pose a

danger to the aircraft operations at the apron area. The said audit team of the

defendant no. 2 comprises of the technical experts and they can be considered as

the best judges to assess the safety requirements of the aerodromes and the

measures to be adopted for ensuring the safety and security of the lives of the

people at the airport. The court should generally refrain from interfering with

such findings of the technical expert team of an executive body. Here, support

may be drawn from the observations made by the Apex court in Joint Action

Committee of Airline Pilots v. Director General of Civil Aviation(supra)

wherein the court observed that where there is a question of challenging the

public policy, it is well settled that the public authority must be given a very

long rope, full freedom and full liberty in framing the policy. Relevant

portion of the said judgment is reproduced as under:-

"It is a question of challenging the public policy and it is well settled that public authorities must be given a very long rope,

full freedom and full liberty in framing policies, though the discretion of the authorities cannot be absolute and unqualified, unfettered or unanalyzed. The same can be the subject matter of judicial scrutiny only in exceptional circumstances where it can be shown to be arbitrary, unreasonable or violative of the statutory provisions. More so, the courts are not well equipped to deal with technical matters, particularly, where the decisions are based on purely hyper-technical issues. The court may not be able to consider competing claims and conflicting interests and conclude on which way the balance tilts."

62. Dealing with the case of judicial review over the decision of the expert

body, the Hon'ble Apex Court in Bajaj Hindustan Ltd. v. Sir Shadilal

Enterprise Ltd. & Anr., (2011) 1 SCC 640, held in the following paras as under:-

"The power to lay policy by executive decisions or by legislation includes power to withdraw the same unless it is by mala fide exercise of power, or the decision or action taken is in abuse of power. The doctrine of legitimate expectation plays no role when the appropriate authority is empowered to take a decision by an executive policy or under law.

The court leaves the authority to decide its full range of choice within the executive or legislative power. In matters of economic policy, it is settled law that the court gives a large leeway to the executive and the legislature. Granting licences for import or export is an executive or legislative policy.

The Government would take diverse factors for formulating the policy in the overall larger interest of the economy of the country. When the Government is satisfied that change in the policy was necessary in the public interest it

would be entitled to revise the policy and lay down a new policy."

63. On the similar lines, the Hon'ble Division Bench of this court in the

Actech Information Systems Ltd. v. UOI & Ors, 2008 V AD (Delhi) 321,

observed that-

"Judicial review of administrative decisions is limited to examining whether the decision making process is vitiated by any illegality, procedural irregularity or perversity. The Court does not sit in appeal over the decision so long as the process leading to the same is found to be satisfactory and free from anyone of the infirmities mentioned above. In cases where the decision making process involves technical expertise, the scope of review gets further reduced. That is because the courts are not equipped with the expertise necessary to sit in judgment over the decisions taken by experts."

64. No doubt that the facility of the plaintiff or his predecessors in interest has

been in existence at the apron area since a long period of 50 years, with no

objection with regard to the safety aspect having ever been raised by the earlier

airport authority, as is the case of the plaintiff, but such a private right of the

plaintiff to continue carrying out such business from the apron area cannot be

allowed to come in the way of implementing a new social methodology or policy

thought of on the lines of international standards by the public authority like

DGCA in the present case. The private treaties entered between the government

and the private party can be overrided by the changed policy of the government if

such change in policy is sought to be brought for larger public interest and is

guided by reasons and rationale. Here, regard may also be given to the settled

legal position that private interest must always stand subordinate to the public

good and in case of conflict between the private interest and public interest, the

latter must prevail over the former. The main reason and rationale given by these

experts recommending shifting of ATF facility from the apron area is to secure

safety of the operation of the aircrafts. The experts are not satisfied even with the

plaintiff shifting its facilities backwards so as to maintain the minimum stipulated

distance of 47.5m from the taxiway, but recommend relocation of the facility

from the apron area altogether. According to them, such relocation of the

plaintiff's facilities of tanks, bowsers etc. to an outer area of the terminal, would

help in minimizing the congestion at the apron area which is a busy site prone to

threats of jet blasts caused by aircraft movement, ramp handling operations etc. In

my view, therefore, such recommendation by the expert team, that comprises of

the technical experts who are considered to be the best judges to assess the safety

requirements of the aerodromes, does not call for any interference.

65. The court is also not convinced and rather astounded seeing the approach

of the plaintiff in the present case in so much as the plaintiff being a holder of a

revocable license, has been putting all kinds of conditions for shifting its storage

facility from the apron area, either by shifting the same backwards so as to

maintain the distance of 47.5 meters from the taxiway "C" line as per the laid

down norms or by shifting to any other place within the apron area, and is not

ready to supply the fuel from the tap off point in collaboration with the IOCL on

the same pattern as is existing at Terminal-3 of the IGI airport, the working of

which it is quite familiar with.

66. The plaintiff has not disputed the fact that defendant No. 1 has already

invested more than Rs. 1 crore in making a provision of tap off point and is

further prepared to provide an alternate location outside the apron area to the

plaintiff. Counsel for the plaintiff has also failed to specifically point out any

kind of commercial motives either of the defendant no.1 or defendant no.2 in

the removal of the ATF facility of the plaintiff from the apron area. In the

absence of demonstrating any arbitrariness, extraneousness, unreasonableness or

any violation of the statutory provision on the part of these defendants, this court

is not persuaded to accept the case set up by the plaintiff that the defendants acted

in furtherance of accomplishing their unwarranted commercial interests in ousting

the plaintiff from the apron area.

67. The Court also does not deem it necessary to give any final view as to

whether defendant No. 1 is an instrumentality of State or a private company free

from the control of the State at this interim stage as the defendant No. 1,

irrespective of it being an instrumentality of State or not, had to mandatorily

comply with various instructions issued by defendant No. 2 and undeniably the

defendant no. 1 has acted only in accordance with the said directions given by the

DGCA for the purpose of securing safe aircraft operations at the apron area,

Terminal -I without violating any principles of natural justice (as has already

been discussed in details above).

68. In the light of the above discussion and based on the triple test for the grant

of ad-interim injunction viz (1) whether the plaintiff has strong prima facie case

to succeed on merits (2) whether the balance of convenience lies in favour of the

plaintiff and (3) whether the plaintiff will suffer irreparable loss and injury if the

injunction is not granted in its favour, this court finds that all the three principles

lean in favour of the defendants and against the plaintiff. The plaintiff has not

been able to establish a prima-facie case in its favour. The grant of injunction in

favour of the plaintiff would pose serious safety threat to the aircraft operations at

Terminal-I which would be detrimental to the public interest. While taking into

consideration the comparative mischief or the balance of convenience, in my

considered view, the defendants' inconveniences in the event of grant of the relief

of temporary injunction in favour of the plaintiff will be far greater as the issue of

safety of the aircraft operations has to be given greater weightage and importance

than the private interest of any commercial body. The grant of temporary

injunction in favour of the plaintiff would also cause irreparable and irreversible

injury to the sagacious cause of the defendants.

69. In the light of the above discussion, the plaintiff is not entitled to the grant

of ad-interim injunction. IA No. 7905/2011 under Order 39 Rule 1, 2 CPC is

accordingly dismissed. The status quo order granted by the court on 13.5.2011 is

hereby vacated and IA No. 12029/2011 under Order 39 Rule 4, CPC moved by

the defendant no. 1 is accordingly allowed.

70. It is ordered accordingly.

KAILASH GAMBHIR

February 11, 2013