Madras High Court
M/S.Evolve Business Ventures vs The Airport Director on 7 December, 2021
CMA No.3495 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 07.12.2021
CORAM:
THE HONOURABLE MR.JUSTICE R.SUBRAMANIAN
CMA No.3495 of 2021
and CMP No.20200 of 2021
M/s.Evolve Business Ventures,
A Proprietary concern-
Represented by its Proprietor,
Mrs.MamtaLunked
No.18/1, S.Kariappa Road,
Model House Cross Road,
Basavanagudi,
Bangalore -560 004. ... Appellant
Vs
The Airport Director,
The Airport Authority of India,
Chennai Airport,
Chennai – 600 016. ... Respondent
Prayer: Civil Miscellaneous Appeal filed under Section 37 (2) (b) of the
Arbitration and Conciliation Act, 1996, to set aside the condition passed in
the impugned order, dated 08.11.2021 in MA No.19 of 2021 in Arbitration
O.P.No.9 of 2021 passed by the Hon'ble Arbitrator.Mr.Kannan (Rtd) as
presiding sole Arbitrator.
1/9
https://www.mhc.tn.gov.in/judis
CMA No.3495 of 2021
For Appellant : Mr.N.R.Elango,
Senior Counsel for
Mr.S.Rajakumar
For Respondent : Mr.R.Sankaranarayanan,
Additional Solicitor General
Assist by
Mr.Ramaswamy Meyyappan
JUDGMENT
This appeal is directed against the interim order made by the
Hon'ble Arbitrator under Section 17 of the Arbitration and Conciliation Act.
2. The matter relates to the payment of concessionaire fee payable
by the appellant to the Airport Authority of India. The appellant was given
a right to establish stalls in the Airport, let them out to individual
entrepreneurs and collect charges from them. He was required to pay a
particular fee for the said right. He was also required to furnish a security
deposit by way of bank guarantee and liquid cash. The dispute arose
between the parties and lock down imposed due to the pandemic also added
to the plight of the parties. The dispute was referred to Arbitration and
when the Arbitrator entered upon arbitration, the appellant sought for stay of
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CMA No.3495 of 2021
the proceedings for termination that were launched by the respondent
namely the Airport Authority of India. While granting stay, the Hon'ble
Arbitrator imposed certain conditions regarding the bank guarantee, cash
deposit towards security deposit as well as the amounts payable as
concessionaire fee. Leaving aside the disputed amounts, the Hon'ble
Arbitrator took the admitted amounts and directed the appellant to pay a
sum of Rs.15.8 crores towards alleged arrears which consisted of the
admitted liability of 10.8 crores and an assumed interest of Rs.5 crores. A
further direction to replenish the bank guarantee for a sum of
Rs.20,25,92,102/-, apart from a direction to make cash deposit of
Rs.4,06,78,980/- was also made. The sum of Rs.1,65,00,000/- that remains
after adjustment of alleged arrears due to the encashment of the bank
guarantee, was also to be adjusted. Therefore, the total security that was to
be provided was fixed at Rs.25,97,71,082/-.
3. Aggrieved by the conditions imposed by the Arbitrator, the
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CMA No.3495 of 2021
claimant before the Arbitrator is on appeal under Section 37 of the
Arbitration Act.
4. I have heard Mr.N.R.Elango, learned counsel appearing for the
appellant and Mr.R.Sankaranarayanan, learned Additional Solicitor General
appearing for the respondent.
5. While Mr.N.R.Elango, learned counsel appearing for the
appellant would contend that the Hon'ble Arbitrator himself should have
taken into account the pandemic and the effect of the lock down imposed,
while directing deposit of 15.8 Crores towards arrears. He would add that if
the concession that was given to other concessioners under the scheme for
concession evolved by the Airport Authority of India on 14.08.2020 is
applied to the appellant, the amount payable by the appellant would be
much less as there is a provision for waiver of 50 % of the security deposit.
Relying upon the scheme for concession, dated 09.12.2020, Mr.N.R.Elango,
would contend that if the concessions provided under Clause 3 are applied,
he is required to maintain only 50% of the security deposit and hence, the
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CMA No.3495 of 2021
direction of the Arbitrator to maintain 100% of the security deposit may not
be appropriate.
6. Contending contra, Mr.R.Sankaranarayanan, learned Additional
Solicitor General would submit that the benefits of the concession
announced vide scheme, dated 09.12.2020 will not be available to the
appellant since the scheme dated 09.12.2020 is only the extension of the
original scheme dated 14.08.2020 which prohibits extension of the
concession to persons who are in default. Therefore, according to learned
Additional Solicitor General, the directions of the Arbitrator takes care of
the interest of both the parties and considering the limited scope of appeal
under Section 37 of the Arbitration and Conciliation Act, interference is not
called for.
7. I have considered the submissions of the learned Senior
counsels on either side.
8. The question whether the appellant would be entitled to
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CMA No.3495 of 2021
concession or not, will have to be decided by the Arbitrator while he
concludes the Arbitration. At the same time, the interest of the respondent
namely the Airport Authority of India also be protected. No doubt, the
pandemic had resulted in dislocation of business for various people. The
Hon'ble Arbitrator had taken care to balance the interest of the parties by
directing maintenance of the security deposit and payment of admitted
arrears along with certain portion of the interest. While I find no ground to
interfere with the direction of the Arbitrator to maintain the security deposit,
that is to furnish bank guarantee for a sum of Rs.20,25,92,102/- and to make
cash deposit of Rs.4,06,78,980/-, as regards the payment of the admitted
arrears namely 10.8 crores along with assumed interest of Rs.5 crores, in my
considered opinion, is a little harsh.
9. Without going into the merits and demerits, considering the
nature of the dispute and the nature of the business that is being carried out
by the appellant which is very much dependent on the actual passenger
traffic in the Airport, I am of the opinion that the interest portion namely the
direction to deposit the assumed interest of Rs.5 Crores could be set aside
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CMA No.3495 of 2021
and the appellant is directed to pay a sum of Rs.10.8 Crores under Clause
3(a) and comply with the directions in Clause 3 (b) of the order of the
Arbitrator, dated 08.11.2021. I make it clear that I am not interfering with
the discretion exercised by the Hon'ble Arbitrator.
10. This appeal is disposed of with the above modification.
Pursuant to the modification of the interim order of the Arbitrator, the
claimant shall pay a sum of Rs.10.8 crores which may be adjusted to the
alleged arrears, replenish the bank guarantee to the extent of
Rs.20,25,92,102/- and make a cash deposit of Rs.4,06,78,980/-. All this
shall be done on or before 24.01.2022, failing which, the appeal will stand
dismissed.
11. In view of the fact that I have extended the time for the
compliance of the interim order of the Arbitrator, I request the Arbitrator to
defer the arbitration proceedings till 24.01.2022 to enable the appellant to
comply with the order and thereafter participate in the Arbitration. It is
made clear that the appellant shall pay the current dues from 1st November
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CMA No.3495 of 2021
2021 and continue to pay current dues without default. No costs.
Consequently, connected miscellaneous petition is closed.
07.12.2021
Index:Yes / No
Speaking / Non-Speaking order
vum
R.SUBRAMANIAN, J.
https://www.mhc.tn.gov.in/judis
CMA No.3495 of 2021
vum
CMA No.3495 of 2021
and CMP No.20200 of 2021
07.12.2021
https://www.mhc.tn.gov.in/judis
