[Cites 2, Cited by 0]
Uttarakhand High Court
M/S Manish Taxi Service And Another ... vs The Airports Authority Of India on 20 March, 2026
2026:UHC:1941-DB
Reserved
IN THE HIGH COURT OF UTTARAKHAND
AT NAINITAL
HON'BLE THE CHIEF JUSTICE SRI MANOJ KUMAR GUPTA
AND
HON'BLE SRI JUSTICE SUBHASH UPADHYAY
JUDGMENT RESERVED ON : 16.03.2026
JUDGMENT PRONOUNCED ON : 20.03.2026
WRIT PETITION (M/B) No. 381 OF 2025
M/s Manish Taxi Service and another .......Petitioners
Versus
The Airports Authority of India ...Respondent
&
WRIT PETITION (M/B) No. 383 OF 2025
M/s Manish Taxi Service and another .......Petitioners
Versus
The Airports Authority of India ...Respondent
Counsel for the petitioners : Sri Jitendra Chaudhary, learned
counsel.
Counsel for the respondent : Sri Digvijay Rai, Sri Shobhit Saharia
and Sri Y.S. Chaudhary, learned
counsel.
JUDGMENT :
(Per Sri Manoj Kumar Gupta, C.J.)
1. These writ petitions are between the same parties and
arise out of a Concession Agreement executed by the respondent
in favour of petitioner No. 1 (proprietorship concern of petitioner
No. 2), and are, therefore, being decided by this common order.
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2. In WPMB No. 381 of 2025, the petitioners have
approached for quashing of the termination notice / order dated
31.05.2025, issued by the respondent, i.e. Airports Authority of
India (for short hereinafter referred to as 'AAI') terminating the
Concession Agreement dated 07.11.2023 for default on part of the
petitioners in fulfilling their obligations regarding payment of
license fee and maintaining a specified amount of bank guarantee
and for restraining AAI from interfering in the functioning of the
petitioners in pursuance of the Concession Agreement dated
07.11.2023.
3. In WPMB No. 383 of 2025, the petitioners have
challenged the Notice Inviting Tender (NIT) dated 01.05.2025 for
grant of short term license for operating snack bar at Dehradun
Airport and allotment, if any, made in pursuance thereof, and also
for restraining AAI from interfering in the functioning of the
petitioners as a concessionaire on basis of Concession Agreement
dated 07.11.2023.
4. The facts, necessary for disposal of the writ petitions,
are as follows:
(a) On 25.01.2023, respondent-AAI issued an e-tender
notice inviting request for proposal (RFP) for Concession to Design,
Fit out, finance, develop, market, operate, maintain and manage
the Food and Beverage outlets at Dehradun Airport for a period of
seven years. Thereunder, 10 F&B outlet sites having gross floor
area 429.61 square meters was earmarked for the purpose. The
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term of concession was seven years. Six bidders participated in the
tender process. The petitioner firm was declared L-1 during the
financial round Stage-II, as it quoted highest price at the rate of
Rs. 51.70 per passenger. On 24.05.2023, a letter of intent was
issued in favour of the petitioner firm.
(b) According to Clause-9 of LOI, the petitioner firm was
required to deposit security in shape of bank guarantee under
phase-1 in a sum of Rs. 7,46,67,208/- with validity of four years
from the date of commencement of the Concession Agreement with
the respondent-AAI. The petitioners deposited the said amount in
three parts, (a) BG of Rs. 1 crore issued by HDFC Bank Dehradun
dated 03.07.2023 (b) BG of Rs. 6 crores issued by HDFC Bank
Dehradun dated 09.10.2023 and (c) BG of Rs. 46.68 lakhs issued
by HDFC Bank Dehradun dated 07.11.2023.
(c) On 07.11.2023, Concession Agreement was executed
between the petitioner firm and the respondent-AAI.
5. According to the petitioners, after expiry of gestation
period of 90 days from the date of LOI, the AAI was obliged to
hand-over the entire area measuring 429.61 square meters and
whereafter only liability to make payment would accrue, but the
AAI delivered possession in phases starting from 29.11.2023 till
September, 2024. On the other hand, according to AAI, the
gestation period was 60 days from Access Date of each location
(site) and not 60 days from the date of issuance of LOI.
Accordingly, it raised bills on pro-rata basis from the date access
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was provided to any particular site and this was in accordance with
the contract. But the petitioners defaulted in payment of the
same. There is also dispute between the parties regarding demand
of 5% increased lease-rent upon expiry of one year of the
execution of the Concession Agreement.
6. The AAI issued several notices of demand for payment
of the license fee, but when the demand was not met, it issued
Show Cause Notice dated 02.04.2025 to the petitioners alleging
non-compliance of Clause 10.4.2 of the License Agreement, viz
"Non clearance of outstanding dues as per agreement conditions."
The sum, stated to be outstanding against the petitioners, was Rs.
3,77,28,522/- as on 31.03.2025 excluding interest on delayed
payment. The petitioners were required to submit their
explanation within three days from the date of issuance of notice
as to why appropriate action may not be taken against them for
non-compliance. It was followed by another notice dated
16.04.2025 reiterating the default on part of the petitioners in
paying the outstanding license fee and requiring the petitioners to
clear the dues within three days of issuance of the notice, failing
which the outstanding dues would be adjusted from the security
deposit without any further notice and reference to the petitioners.
The petitioners were also warned that in case the default
continues, further action, as deemed fit including termination of
license, may be taken, if situation so warrants. However, the
petitioners disputed the demands and, therefore, did not pay the
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amount. Consequently, AAI adjusted a sum of Rs. 4,78,93,927/-
(Rs. 3,89,05,633 towards the principal amount and Rs.
89,88,294/- as penal interest) against the outstanding dues as on
09.05.2025 by encashment of the bank guarantee. In
consequence, the security deposit (BG) got reduced to Rs.
2,67,74,093/-. Thereafter, AAI issued notice to the petitioners
dated 15.05.2025 intimating the petitioners about the adjustment
made towards the arrears of license fees from the security deposit
and required the petitioners to recoup the security deposit in terms
of the license agreement within fifteen days of issue of the notice,
i.e. 30.05.2025, failing which necessary action to terminate the
license would be initiated without any further reference to the
petitioners.
7. In view of the above dispute between the parties, the
operation of F&B locations at the Airport got seriously impacted.
Consequently, the respondent-AAI issued a Notice Inviting Tender
for short-term license for operating a snack bar over a small area
measuring 15 square meters on the first floor at Dehradun Airport
on 1st May, 2025 subject to termination of the Master
Concessionaire in favour of the petitioners. Although, according to
AAI, it was in respect of a different site, but the petitioner firm,
contending that the same is not permissible during subsistence of
the Concession Agreement in its favour, challenged the NIT by
filing WPMB No. 383 of 2025 and for restraining AAI, Dehradun
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from interfering in the right of the petitioners to work as per
Concession Agreement dated 07.11.2023.
8. The said writ petition was presented before this Court on
16.06.2025 and therein, an interim order staying 'the operation of
the impugned order' was passed on 27.06.2025. However, before
the interim order came to be passed and even before the writ
petition was filed, the respondent-AAI vide notice dated
31.05.2025, terminated the Concession Agreement and further
required the petitioners to stop their business operation with effect
from 06.06.2025 (midnight) and to vacate the premises.
9. It is noteworthy that on 02.05.2025, the petitioners
approached the Commercial Court, Dehradun with an Application
under Section 9 of the Arbitration and Conciliation Act, 1996. The
prayer made in the said application is for restraining the
respondent-AAI from encashing the bank guarantee during
pendency of the Application under Section 9 of the Arbitration and
Conciliation Act, 1996 and the arbitral proceedings, which the
petitioners intended to initiate. The relevant part of Article 22 of
the Concession Agreement, which stipulates that all disputes and
differences arising out of or in any way touching or concerning the
Agreement, would be decided initially through mediation and on its
failure through arbitration, is as follows:
"...22. ARTICLE-22 [DISPUTE RESOLUTION]
22.1 Dispute Resolution
22.1.1 All disputes and differences arising out of or in any
way touching or concerning this Agreement (except those the
decision whereof is otherwise herein before expressly
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provided for or to which the AAI ACT, 1994 and the rules
framed there-under which are now enforce or which may
here-after come into force are applicable) (the "Dispute")
shall be dealt as under:
22.1.2 Through Mediation: All dispute(s), at the first
instance, shall be referred to the Mediation Committee of
Independent Experts (MCIE) or individual mediator for
mediation as per AAI Mediation Policy and applicable laws. All
cost of mediation, shall be borne equally by the parties.
22.1.2.1 In case either party withdraws from the Mediation
or the dispute(s) is not resolved within 120 days of reference
to the Mediation, then the aggrieved party may invoke
arbitration through sub para (ii) within 30 days from the date
of receipt of Partial Settlement Agreement or Failure Report.
22.1.2.2 Unless the contract has already been repudiated or
terminated, the parties shall, in every case, continue to
proceed to perform their respective obligations under the
agreement."
10. In the same proceedings, another application was filed
by the petitioners on 16.05.2025 seeking stay of the letter of the
respondent-AAI dated 15.05.2025, by which the petitioners were
informed that the outstanding dues had been adjusted against the
bank guarantee and they were asked to recoup the deficit and the
security deposit within 15 days, failing which the Agreement shall
be terminated.
11. On 28.05.2025, the Commercial Court, Dehradun
proceeded to reject the Application under Section 9 of the
Arbitration and Conciliation Act, 1996 holding that the petitioners
could not maintain the Application under Section 9 without
exhausting the remedy of mediation provided under the Agreement
between the parties. The petitioners challenged the order of the
Commercial Court, Dehradun rejecting Section 9 Application, by
filing A.O. No. 168 of 2025. It seems that the respondent-AAI
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contended in the said proceedings that the Appeal filed has become
infructuous as the bank guarantees have already been invoked.
However, the said contention was repelled and this Court, holding
that for the reason that the bank guarantees have already been
invoked, the remedy, provided under Section 9 of the Arbitration
and Conciliation Act, 1996, cannot be rendered nugatory, allowed
the Appeal and remitted the matter back to the Commercial Court
for deciding the same on merits.
12. The petitioners on 16.06.2025, stating that the
Commercial Court, Dehradun after remand has not taken-up the
Application under Section 9 of the Arbitration and Conciliation Act,
1996, as it is closed for summer vacations, filed these writ
petitions. It is not disputed before us that under the Concession
Agreement, all disputes arising between the parties are to be
resolved through arbitration. In fact, the petitioners, availing the
said remedy, have already filed application under Section 9 of the
Arbitration and Conciliation Act, 1996 seeking appropriate interim
relief during pendency of the arbitration proceedings. The main
ground that the Commercial Court is closed for summer vacations
does not subsist as of now. The validity of the action of the
respondent-AAI in terminating the contract would also fall within
the scope of the arbitration contemplated under the Concession
Agreement.
13. In such view of the matter, we are of the considered
opinion that there is no occasion for this Court to examine the
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validity of the action of the respondent-AAI in terminating the
contract or granting any interim relief in favour of the petitioners in
respect whereof the Application under Section 9 of the Arbitration
and Conciliation Act, 1996 is also pending and in which, additional
prayers can also be made by the petitioners before the Commercial
Court.
14. The writ petitions are, therefore, dismissed.
15. The instant order shall not be construed as expressing
any opinion on merits of the case of either of the parties and all
pleas and contentions of the parties are left open for being raised
before the appropriate forum.
16. Pending application, if any, also stands dismissed
accordingly.
_____________________
MANOJ KUMAR GUPTA, C.J.
___________________
SUBHASH UPADHYAY, J.
Dt: 20th March, 2026
Rathour
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SINGH RATHOUR
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RATHOUR
Date: 2026.03.20 16:34:30 +05'30'
