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ORDINARY ORIGINAL CIVIL JURISDICTION
IN ITS COMMERCIAL DIVISION
COMM. ARBITRATION PETITION (L) NO. 12378 OF 2025
M/s. Survee Foods Private Limited … Petitioner
Vs.
Airports Authority of India .. Respondent
Mr. Rahul Pandey a/w. Suchita Pandey and Pramila Prajapati, for
Petitioner.
Mr. Pravin Samdani, Senior Advocate a/w. Shilpa Kapil, Chidanand
Kapil, Chandni Bavishi and Priti Karbhai, for Respondent AAI.
JUDGMENT
1. This is a Petition under Section 9 of the Arbitration and Conciliation Act, 1996 (“the Act”). The disputes and differences between the parties have arisen in connection with a Concession Agreement dated February 21, 2024 between the Petitioner and the Respondent, Airports Authority of India (“AAI”). The Concession Agreement is scheduled to run for a period of seven years after an initial gestation period of 60 days. It is evident that the Concession Agreement was meant for the Petitioner to run a restaurant / “hang-out” over property at the Juhu Airport, admeasuring approximately 150 sq. mtrs. and the operation of the restaurant commenced sometime in June 23, 2025 Shraddha * Judgement is corrected as per Order dated July 21, 2025 September 2024. The Concession Agreement contains an arbitration agreement.
2. By a notice dated March 22, 2025 (“Termination Notice”), the AAI issued a termination notice essentially stating that the land for which the contract was executed between the parties for operating the restaurant /hangout facility / outlet was strictly confined to such area allotted to the Petitioner, but the Petitioner has gone way beyond the area of 150 sq. mtrs. allocated to him under the Concession Agreement, allegedly occupying 212 sq. mtrs., beyond the area allocated under the Concession Agreement. The operational boundary wall is alleged to have been demolished to enable the alleged trespass by the Petitioner. Consequently, it is claimed by AAI that such conduct is a breach of the Concession Agreement and as a result, the Concession Agreement is sought to be terminated.
3. In passing, the Termination Notice states that “Competent Authority” of the AAI has directed that a preliminary inquiry be conducted into the process of awarding of the contract to look into the allegations of irregularities in the award of the subject contract. This element gains significance because this Petition is but one of several license agreements and concession agreements (ranging from electric vehicle charging stations to restaurants and hang-outs), all of which were terminated on the very same day – March 22, 2025.
4. In all the petitions challenging such terminations, the AAI has taken the primary stance that an earlier airport director of the AAI awarded these contracts without any authority to do so, and that is the core ground for stating that these contracts are liable to be terminated.
5. Mr. Pravin Samdani, Learned Senior Counsel for the AAI submits that there has been a serious lacuna on the part of the erstwhile director who was in charge of the Juhu Airport in awarding contracts to at least eleven persons. The contention is that the said director did not have any authority to initiate the process of granting such concessions in respect of any of the eleven units.
6. It is a matter of record that in at least five other cases, similar Petitions have been filed. By an order dated April 24, 2025, dealing with four such cases, taking on board the consent of the parties and inputs from all parties, all the petitions were disposed of appointing a retired former chief justice of this Court as a Sole Arbitrator to conduct arbitral proceedings. The AAI was then represented by the Learned Additional Solicitor General. By consent, the Section 9 petitions were converted into applications under Section 17 of the Act for consideration by the Arbitral Tribunal appointed therein. It was also recorded that both parties, by consent, would maintain status quo obtaining as of that date, to enable the Learned Arbitral Tribunal to conduct the proceedings and examine what appropriate interlocutory measures may be directed.
7. It was evident that these contracts were awarded pursuant to a public advertisement by the AAI and the process was run over a period of time, which makes it prima facie implausible that one individual in the AAI signed off vast portions of AAI’s airport premises at the Juhu Airport, without any authority and without anyone stopping him. That apart, after the award of these contracts, the utilities of these private parties were set up and have been up and running, all of which are said to be without knowledge of the AAI’s internal decision making system and solely at the behest of one individual. At this stage of the matter, this does not inspire confidence enough to deny protection of the subject matter of the arbitration agreement, which led to the status quo order being considered, and it was fairly stated on behalf of the AAI that even the petitioners ought to maintain status quo and not take any further steps that changes the current position.
8. This Petition, being similarly placed as the aforesaid matters, and consent having been accorded for reference to arbitration in those matters, it was put to AAI that the best course of action would be to pass the same order – a grant of status quo being maintained by both sides, moving the proceedings to the Learned Arbitral Tribunal.
9. However, it transpires that despite the order dated April 24, 2025 having been passed by consent, the AAI filed appeals before the Learned Division Bench of this Court, which have now been dismissed. Mr. Samdani submits that review petitions have now been filed in respect of those petitions for this Court to review the order passed by consent, and that they would come up soon.
10. Today, Learned Senior Counsel on behalf of the AAI raises another issue. He would draw my attention to the provisions of the arbitration agreement, in particular to the provisions of Clause 25.10 to highlight that no disputes shall be referred to arbitration where eviction and recovery procedure is provided for under Chapter V-A of the Airports Authority of India Act, 1994 (“AAI Act”). Another provision in the arbitration agreement he would quote is Clause 25.1, which provides that all disputes and differences arising out of, or in any way, touching of concerning the Concession Agreement would be amenable to arbitration, except those where the decision is otherwise provided for in the Concession Agreement or to which the AAI Act and Rules made thereunder apply. The upshot of this argument is that this matter (and indeed all the other matters) being one of encroachment, eviction proceedings would lie against the Petitioner. Therefore, the contention is that these matters are not amenable to arbitration.
11. A plain reading of the Termination Notice would indicate that the termination indeed is linked to an alleged encroachment on area in excess of what was allocated to the Petitioner. That apart, the contention is that the very award of the contract was vitiated by lack of authority in the hands of the director who permitted these license agreements. One would need to break these down into separate facets and deal with each of them.
12. On the face of it, there is a Concession Agreement that is meant to run for seven years. Needless to say, this particular agreement is also a product of a public tender and everyone, including the AAI was fully aware about the course of conduct and the various steps that led to the award of this contract. On the last occasion when this Petition was heard, Learned Senior Counsel was asked if any case has been opened before the Central Bureau of Investigation or the Chief Vigilance Commissioner in respect of this tender process. As of that date, it was stated that there is no case before any vigilance authority or investigating agency. This position continues today, except to state that the AAI’s internal vigilance department is looking into the matter. If precious airport property was said to be totally given out without any authority whatsoever, it would follow that there would be other contemporaneous activity that would be consistent with the proposition presented to Court. The absence of the same is something that cannot be ignored. In a nutshell, prima facie, it appears to this Court that the kitchen sink is being thrown at the issue and various arguments ranging from lack of authority to encroachment and consequential eviction, as indeed, prohibited sub-licensing by the licensees are all thrown into a mix.
13. The short question that falls for my consideration is how to deal with these issues as a matter of interlocutory arrangements before an Arbitral Tribunal in whose domain examination of complex facts falls, considers the facts.
14. According to me, the jurisdiction under Section 9 of the Act is essentially an equitable jurisdiction meant to preserve and protect the subject matter of the arbitration agreement. Evidently, there is an agreement conferring a concession of seven years for conduct of a restaurant. That agreement has been executed, on the face of it with due process of public tender and other procedures. The termination is evidently a termination for cause and not a termination simplicitor. No opportunity to cure appears to have been provided. All eleven contracts have been terminated by the same stroke of pen on the same day. The AAI may well be right and could satisfy the arbitral tribunal – the question today is before the arbitral tribunal considers the matter, what steps would be appropriate.
15. The termination being a termination for cause, the specific facts of this case have to be borne in mind. It is common ground that an area of 150 sq. mtrs. is provided for in the Concession Agreement. Any encroachment in excess of the area allocated, such as breaking of a boundary wall and occupying any portion beyond the demarcated area given to the Petitioner would naturally fall within the scope of eviction proceedings and there would be no interference from this Court in respect of such eviction proceedings relating to the encroached area.
16. As regards the area covered by the Concession Agreement and the termination on the premise of lack of authority to execute such a contract, this case would stand on the same footing as the other five cases already referred to arbitration by consent. The filing of an appeal and the intended pursuit of review proceedings cannot change this position. Eviction proceedings to deal with encroachment is something that would remedy unauthorised use of property that someone is squatting on. Since there is an executed Concession Agreement and that authorised the use of the premises so given as a restaurant, it would follow that the current usage of the allotted property cannot be prima facie considered to be encroachment, warranting eviction. It would only be logical that status quo be maintained in respect of such area. It is noteworthy that the Concession Agreement has explicitly conferred on the Petitioner the right to such authorised usage for a period of seven years, which is still running its course.
17. Mr. Samdani also seeks to rely on a judgement rendered by this very Bench in the case of HLV Ltd.1. The facts of HLV Ltd. are totally distinguishable – that was a case where two leases were involved, and the leases had long expired. In that judgement, it was ruled that the subject matter of eviction from airport premises would squarely fall within the jurisdiction of the Eviction Officer. It was held that merely because the arbitration agreement contained in that agreement referred to law governing eviction from “public premises” as a matter of exclusion from arbitration, but the AAI adopted proceedings under Chapter V-A of the AAI Act, it would not change the scope of what the parties had agreed would be out of the scope of arbitration. The parties had explicitly agreed that despite the construction of HLV Limited (Formerly Known as Hotel Leela Venture Limited) Versus Airports Authority of India Through Its Chairman – ARAST-12153-2021 (AS) with CARAP No. 28 of 2017 dt. June 9, 2025 a hotel, the premises would be regarded as “public premises”. The leases had expired. They were renewed for short periods from time to time. The revised lease rentals being sought was not acceptable. The occupation of the premises thereafter had continued in reliance upon protective statements made in Court. The question that arose was whether the Eviction Officer was right in rejecting the applications under Section 8 of the Act, and those decisions, on the merits of the case were upheld. HLV Ltd. had sought to argue that while the lease agreement may seem like a lease on paper, in substance, it was a joint venture agreement and a joint venture agreement would not be amenable to be read as if it was a lease, thereby excluding the scope for eviction proceedings. This Court disagreed taking into account the fact that the leases had expired, and the continued occupation of the leased land thereafter could be examined in eviction proceedings under Chapter V-A of the AAI Act.
18. In the facts of this case, the seven-year period under the Concession Agreement is still underway. The Concession Agreement that is in place is sought to be terminated on multiple grounds. Insofar as the objection relating to the clash with the jurisdiction of the Eviction Officer is concerned, it is made clear that the eviction proceedings can only relate to such portion of additional land alleged to be encroached. Whether there has been an encroachment, which part of that land is encroached, and which part of that land is actually covered by the Concession Agreement are questions of fact, which the Eviction Officer would need to deal with in the eviction proceedings upfront, and not conflate the eviction proceedings into being proceedings that oust the jurisdiction of the arbitration agreement between the parties.
19. Consequently, there shall be no interference in relation eviction proceedings, if any, only insofar as it relates to land unauthorizedly alleged to be occupied by the Petitioner. The land covered by the Concession Agreement is not land occupied with no authorisation, but is land occupied under the Concession Agreement, explicitly for running a restaurant. That the AAI submits that the Airport Director had no authority to execute the Concession Agreement would not ex facie render the legitimate usage of the land for the purposes stated in the Concession Agreement as being unauthorised use of airport premises. Far more evidence would be needed to be examined and appreciated in the matter and this squarely falls in the domain of the arbitral tribunal.
20. The order dated April 24, 2025 passed in identically placed petitions had been carried up in appeal before a Learned Division Bench of this Court, which was pleased to notice that the said order had been passed by consent, and consequently refused to interfere. The AAI’s intent to file review petitions to deal with the perceived conflict between the order dated April 24, 2025 and HLV Ltd. was noticed and liberty was granted. Those review petitions will come up at a future date.
21. The analysis in this order is to look at what appropriate interlocutory arrangement should follow in the instant case. I see no reason to take any approach different from the similar matters that have already come up before this Court. Both the Petitioner, as well as the AAI, shall maintain status quo obtaining as of today. An attempt to ask the parties to proceed to arbitration forthwith has failed. Mr. Samdani would submit that considering the reference to size of the costs incurred by the Petitioner, a three-member arbitral tribunal would need to be constituted and it is for the Petitioner to attempt forming an arbitral tribunal. Consequently, the Petitioner is at liberty to invoke arbitration forthwith and file an appropriate application under Section 11 of the Act.
22. The matter is stood over to July 30, 2025. This order will operate until that date.
23. If the restaurant is operating as of today, it shall continue to operate subject to this order. Learned Senior Counsel for the AAI, on instructions from officers of the AAI, would submit that the restaurant is not running. Whether the restaurant is actually running or not can easily be proven by any bills raised on any customer and GST filings made by the restaurant in question, CCTV footage etc. Those elements would constitute evidence to ascertain which party’s contention is right about the status obtaining as of today. Liberty is granted to the Petitioner to bring on record by way of an affidavit, any bill raised on any customer of the restaurant, any CCTV footage and other such evidence that would demonstrate the status obtaining as of today, and serve the same on the AAI.
24. Learned Senior Counsel for the AAI also seeks to rely on Section 28A(f) and Section 28M of the AAI Act, each of which is extracted below: 28A. Definitions.—In this Chapter, unless the context otherwise requires,— (f) “unauthorised occupation”, in relation to any airport premises, means the occupation by any person of the airport premises without authority for such occupation and includes the continuance in occupation by any person of the airport premises after the authority (whether by way of grant or any other mode of transfer) under which he was allowed to occupy the premises has expired or has been determined for any reason whatsoever. 28M. Finality of orders.—Subject to the provisions of this Act, every order made by an eviction officer under this Chapter shall be final and shall not be called in question in any suit, application, execution or other proceeding and no injunction shall be granted by any court or other authority in respect of any action taken or intended to be taken in pursuance of any power conferred by or under this Chapter. [Emphasis Supplied]
25. A plain reading of Section 28A(f) would show that inherent to the definition of “unauthorised occupation” is the absence of authority for such occupation. The Concession Agreement is the instrument that authorises the occupation of premises for running of the restaurant. The additional area allegedly encroached is the area that is not backed by authority for occupation. This is what has led to the aforesaid formulation in this order.
26. That apart, the contention appears to be that continuance in occupation after determination of the authorisation, is also a matter where the Eviction Officer alone would have jurisdiction, and this Court would have no jurisdiction. Section 28M is sought to be relied on as ousting the jurisdiction of the Section 9 Court. This provision cannot be read in isolation without regard to whether Chapter V-A is attracted to an action in the first place. Prima facie, there is no scope for eviction proceedings in relation to land covered by the authorisation granted under the Concession Agreement. Whether the termination is valid or not is an arbitrable dispute. That being the case, the jurisdiction of this Court under Section 9 would cover consideration of temporary and interim protective reliefs to preserve the subject matter of the arbitration agreement. Therefore, the reliance on the aforesaid provisions does not alter the analysis made above.
27. The Termination Notice is the fact in issue in this Petition. The attack is on the termination being improper, and consequently, as far as the jurisdictional question is concerned, one cannot be blind to the actual reason for which the termination is sought. Therefore, insofar as any occupation is not covered by authorisation, the Eviction Officer would have jurisdiction.
28. It is made clear that the interference by this Section 9 Court in relation to the other facets of the land occupied and operated as a restaurant would fall prima facie, within the ambit of arbitration, and consequently, the status quo is being directed in respect of that portion of the activity.
29. Meanwhile, in the arbitration proceedings that had already been initiated in respect of the other five petitions have been stultified. It is contended that the AAI refused to participate in them on the premise of appeals having been filed against the order passed by consent. After efforts to commence the arbitration, the Learned Sole Arbitrator appointed in those cases has refused to act as arbitrator. Therefore, there is no arbitral tribunal seized of the matter in the other connected matters to send this case to. In fact, in the other Petitions, AAI had submitted that it was willing to proceed to arbitration provided a different arbitrator is appointed in each case. After the Learned ASG was briefed in the matter, the Learned Sole Arbitrator came to be appointed in all those matters.
30. Learned Counsel for the Petitioner submits that he will shortly invoke arbitration and serve the AAI. Should the AAI not appoint an arbitrator within the statutory wait period of 30 days, a Section 11 Application shall be filed within 30 days of the service of the notice invoking arbitration.
31. In these circumstances, stand over to July 30, 2025. The interim protection granted today shall continue until the next date.
32. All actions required to be taken pursuant to this order, shall be taken upon receipt of a downloaded copy as available on this Court’s website. [ SOMASEKHAR SUNDARESAN, J.]