IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 17.09.2008 CORAM : THE HONOURABLE MR.JUSTICE A. KULASEKARAN W.P. No. 23809 of 2007 W.P. Nos. 12577 and 13367 of 2008 -o- WP No. 23809 of 2007 Hindustan Engineering Institute Centre rep. By its Director Anand Jacob Verghese 40, G.S.T. Road, St. Thomas Mount .. Petitioner Chennai – 600 016 Versus 1. The Union of India rep. By Secretary to Government Ministry of Civil Aviation Rajiv Gandhi Bhavan New Delhi – 110 003 2. The Airports Authority of India rep. by its Chairman Rajiv Gandhi Bhavan New Delhi 3. The Regional Executive Director (SR) Airports Authority of India Chennai Airport Chennai – 600 027 4. The Manager (ATC) Airports Authority of India Pondicherry Airport Pondicherry – 605 008 5. The Director General of Civil Aviation Rajiv Gandhi Bhavan New Delhi .. Respondents https://hcservices.ecourts.gov.in/hcservices/ WP No. 12577 of 2008 Hindustan Engineering Institute Centre rep. By its Director Anand Jacob Verghese 40, G.S.T. Road St. Thomas Mount Chennai – 600 016 .. Petitioner Versus 1. The Union of India rep. By Secretary to Government Ministry of Civil Aviation Rajiv Gandhi Bhavan New Delhi – 110 003 2. The Airports Authority of India rep. by its Chairman Rajiv Gandhi Bhavan New Delhi 3. The Regional Executive Director (SR) Airports Authority of India Chennai Airport Chennai – 600 027 4. The Manager (ATC) Airports Authority of India Pondicherry Airport Pondicherry – 605 008 5. The Director General of Civil Aviation Rajiv Gandhi Bhavan New Delhi 6. M/s. Montis Aviation Academy AJ-70, AJ 3rd Street, 9th Main Road Anna Nagar West Chennai – 600 040 .. Respondents WP No. 13367 of 2008 Hindustan Engineering Institute Centre rep. By its Director Anand Jacob Verghese 40, G.S.T. Road, St. Thomas Mount .. Petitioner Chennai – 600 016 Versus https://hcservices.ecourts.gov.in/hcservices/ 1. The Union of India rep. By Secretary to Government Ministry of Civil Aviation Rajiv Gandhi Bhavan New Delhi – 110 003 2. The Airports Authority of India rep. by its Chairman Rajiv Gandhi Bhavan New Delhi 3. The Regional Executive Director (SR) Airports Authority of India Chennai Airport, Chennai – 600 027 4. The Senior Manager (ATC) Airports Authority of India Pondicherry Airport Pondicherry – 605 008 5. The Director General of Civil Aviation Rajiv Gandhi Bhavan New Delhi .. Respondents WP No. 23809 of 2007: Petition filed under Article 226 of The Constitution of India praying for a Writ of Mandamus directing the second respondent to renew the license granted to the petitioner at Civil Aerodrome Pondicherry measuring approximately 33.5m X 35m as shown in the sketch annexed to the license dated 28.10.1994. WP No. 12577 of 2008: Petition filed under Article 226 of The Constitution of India praying for a Writ of Certiorari calling for the records relating to the impugned proceeding of the second respondent calling for invitation of expression of interest for setting up of flying schools/aircraft maintenance workshops at various airports in India as published in The Hindu newspaper dated 17.03.2007, and all further proceedings such as calling for financial bids and short listing the successful bidders, quash the same. WP No. 13367 of 2008: Petition filed under Article 226 of The Constitution of India praying for a Writ of Certiorari calling for the records relating to the impugned proceeding of the fourth respondent in AAI/PC/OPS/2008-09 dated 30.05.2008, quash the same. For Petitioner : Mr. V. Selvaraj for N.S.Kishore Kumar in all the Writ Petition https://hcservices.ecourts.gov.in/hcservices/ For Respondents : Mr. M. Ravindran Additional Solicitor General for Mr. B. Damodaran for RR1 & 5 in all the Writ Petition Mr.C.K.M.Appaji for R3 in all WPs COMMON ORDER In all these three cases, the parties are one and the same except one difference namely in WP No. 12577 of 2008, apart from other respondents, the 6th respondent is added and the issues involved are also more or less identical, hence, they are disposed of by this common order. 2. In WP No. 23809 of 2007, the petitioner seeks for a Writ of Mandamus directing the second respondent to renew the license granted to the petitioner at Civil Aerodrome Pondicherry measuring approximately 33.5m X 35m as shown in the sketch annexed to the license dated 28.10.1994. 3. In WP No. 12577 of 2008, petitioner seeks for quashing the proceedings of the second respondent inviting expression of interest for setting up flying schools /aircrafts maintenance workshops at various airports in India as published in the Hindu English Newspaper dated 17.03.2007. 4. WP No. 13367 of 2008 has been filed seeking for quashing of the proceedings of the fourth respondent in AAI/PC/OPS/2008-09 dated 30.05.2008. 5. The third respondent has filed counter affidavit in WP No.13367 of 2008 on 30.06.2008. 6. The fourth respondent has filed counter affidavit in MP No. 2 of 2008 in WP No. 23809 of 2007 on 12.04.2008; MP No. 1 of 2007 in WP No. 23809 of 2007 was filed to vacate the interim order dated 21.07.2007; additional affidavit in WP No. 23809 of 2007 on 28.04.2008 and counter affidavit in WP No. 12577 of 2008 on 05.06.2008. 7. The respondents 1 and 5 have filed counter affidavit in WP No. 23809 of 2007 on 12.05.2008; better counter affidavit in WP No. 23809 of 2007 on 15.05.2008; better counter affidavit in WP No. 23809 of 2007 on 15.07.2008; counter affidavit in WP No. 12577 of 2008 dated Nil June 2008; better counter affidavit in WP No. 12577 of 2008 on 15.06.2008 and better affidavit in WP No. 12577 of 2008 on 15.07.2008. 8. The learned counsel appearing for the petitioner submitted as follows:- The petitioner is a society registered under the Societies https://hcservices.ecourts.gov.in/hcservices/ Registration Act, established several educational institutions namely Hindustan College of Engineering, Hindustan College of Arts and Science, Hindustan Institute of Engineering and Technology etc., The petitioner also started Orient Flight School, hereinafter called as Petitioner School, in the year 1994 after obtaining necessary license from the second respondent. On 28.10.1994 the fourth respondent also granted 1171.5 Sq. Meters of land in the Pondicherry Airport by way of license for a period of five years ending with 27.10.1999 for parking the aircrafts inside the Hanger and also to carry out the aircraft maintenance work besides setting of training classes for students. On 20.07.1995, an agreement/license for construction of temporary building/structure or installation was granted to the petitioner school to put up structures in the premises on payment of license fee of Rs.220/- per sq.meter with 10% escalation every year. The petitioner sought for renewal of license but the second respondent directed the petitioner school to continue as licensee without renewing the license, however they received the annual rent with 10% escalation every year. On 29.11.2004, the petitioner school requested the authorities to renew the license for which the fourth respondent sent a letter calling upon the petitioner to vacate and handover possession of the premises within 30 days. On 16.07.2005, 18.07.2005, 21.07.2005 and 13.08.2005, the petitioner sent letters to the respondents seeking to renew the license of the petitioner school otherwise the training of the students of the petitioner school will be paralised and their future will be jeopardised. In the meanwhile, the petitioner sought permission to import 4 single piston Engine Cessna 172 Aircrafts for imparting flight training for which a letter was received from the second respondent stating that the hanger space allotted at Pondicherry could not accommodate additional aircrafts and that already eviction notice to vacate the hanger had been issued by the fourth respondent. On 13.10.2005 and 25.03.2006, letters were sent to the fourth respondent and third respondent respectively by the petitioner requesting for renewal of license. On 23.05.2006, the fourth respondent sent a letter requesting the petitioner to pay Rs.50,00,000/- towards continued occupation of the hanger, which was also duly remitted by the petitioner. On 29.05.2006, a letter was received from the first respondent granting permission to import Cessna 172 Aircrafts, however, directed the petitioner to approach the fifth respondent. On 26.06.2006, a letter was received from the second respondent informing the petitioner that damages would be claimed for continued occupation of the premises as determined by the competent authority which was opposed by the petitioner on the ground that the demand for payment of damages and royalty is not justifiable. Thereafter, the second respondent invited tenders by giving publication in The Hindu newspaper dated 17.03.2007 for setting up a flying school at Pondicherry Airport with condition that the successful bidder has to establish the flying school within 12 months. Though the petitioner has challenged the said tender by filing W.P. No. 12577 of 2008, they participated in the tender in which one M/s. Montis Aviation Academy has offered Rs.18,37,50,000/- and the https://hcservices.ecourts.gov.in/hcservices/ petitioner offered Rs.9,76,80,000/- and the petitioner was called upon to match the offer made by H1 namely M/s. Montis Aviation Academy but the same was not agreed upon by them. On 15.06.2007, the second respondent arbitrarily directed the petitioner to give an undertaking that if the petitioner is not successful in the proposed tender for flying schools at Pondicherry, they have to vacate the premises. The fourth respondent has also sent a letter dated 30.05.2008 to the petitioner stating that the airfield would be closed on 04.06.2008 for undertaking airport expansion, runway extension/strengthening; that the airports authority of India has been established by the Airports Authority of India Act, 1994; that Section 12-A of the Act empowers the authoriity to license the premises of an airport; that airports authority of India has been established to provide for betterment of civil aviation, including establishment of aviation school centers for training of pilots, establishment of training institutions and workshops, whereas Airports Authority of India has not proposed to establish any training institution and workshop on its own on the other hand it invited tenders for setting up of flying schools at Pondicherry Airport by private operators; that the tender documents shows that Airports Authority of India is only interested in making profit and not interested in protecting the training institutions which are already in existence; that the flying school established by the petitioner caters to the needs of students from Tamil Nadu, Kerala and Pondicherry by charging minimum fees; that the petitioner school is having necessary aircrafts, reference books, audio and video VCDs and DVDs; that airports authority of India failed to consider the request of the petitioner for renewal of license without any valid evidence; that if the petitioner school is closed, more than 100 students, who are undergoing training at various stages will be put to irreparable loss; that under Section 12 A (2) of the Act, the Airports Authority of India cannot lease the airport without previous approval of the Central Government, whereas, in this case, the second respondent invited tenders by issuing notification dated 17.03.2007 without obtaining prior permission from the first respondent, hence, the same is invalid; that the fourth respondent, in its communication dated 30.05.2008 threatened to close the airfield under the pretext of airport expansion, runway extension/strengthening; that the length and breadth can be increased without closing the airfield, hence, the impugned communication dated 30.05.2008 was issued to paralyse the petitioner's institution. The respondents without taking note of the petitioner's experience in the field of imparting training of pilots and the infrastructure provided by it, arbitrarily refused to renew the licence. In the said circumstance, WP No. 23809 of 2007 was filed by the petitioner on 11.07.2007 seeking for renewal of the license; W.P.No. 12577 of 2008 was filed on 19.05.2008 seeking to quash the tender notification dated 17.03.2007 and W.P. No. 13367 of 2008 was filed on 02.06.2008 to quash the proceedings of the fourth respondent dated 30.05.2008 and prayed for allowing all the writ petitions. In support of his contention, the learned counsel for the petitioner relied on the below mentioned decisions:- https://hcservices.ecourts.gov.in/hcservices/ i) (M. Pentiah and others vs. Muddala Veeramallappa and others) AIR 1961 SC 1107 ii) (Dr. H.S. Rikhy and others vs. The New Delhi Municipal Committee) 1962 SCR 604 iii) (Bhikraj Jaipuria vs. Union of India) AIR 1962 Supreme Court 113 iv) (Haridwar Singh vs. Begun Sumbrui and others) AIR 1972 Supreme Court 1242 v) (Indian Administrative Service (SCS) Association, UP and others vs. Union of India and others) 1993 Supp (1) Supreme Court Cases 730 9. Mr. M. Ravindran, learned Additional Solicitor General of India appearing for the respondents 1 to 5 submitted as follows:- The petitioner approached the fifth respondent by sending a letter dated 03.03.1993 to grant approval for starting a flying school which was accorded vide letter No.AV22011/1/87FG dated 03.03.1993, thereafter, the petitioner obtained permission from the fifth respondent and again approached the third respondent for allotment of land for construction of hanger by their letter dated 16.03.1994, which was forwarded to the second respondent and the same was placed before the National Airports Authority Board for consideration, which also approved the proposal and conveyed it to the third respondent with a direction to allot actual area required for the purpose vide their letter dated 27.10.1994; that the third respondent, in their letter dated 26.12.1994 directed the fourth respondent to allot 35.00 X 33.5 meters of land to the petitioner at Pondicherry Airport and the fourth respondent, by their letter dated 28.10.1994 allotted land to the petitioner for a period of five years from 28.10.1994 and an agreement was also executed to that effect on 20.07.1995; that the petitioner while constructing hanger encroached 51.12 sq.meter of land over and above the land allotted to them and the fourth respondent issued a notice dated 12.01.1996 to the petitioner to stop the construction activities; that the petitioner, in their letter dated 07.12.1995 had pleaded for allotment of encroached area as additional area allotted to them; that the respondents have considered the petitioner's request in the interest of trainees and regularised the unauthorised occupation by their letter dated 25.04.1996; that the license granted to the petitioner expired on 28.10.1999 and on application for renewal made by the petitioner, the same was renewed for a further period of five years ending with 27.10.2004 with revised rate of license fee for the extended period; that the petitioner, in their letter dated 29.11.2004 requested the fourth respondent to renew the license for further period of five years, but the fourth respondent, in his letter dated 06.07.2005 informed the petitioner that the request of renewal is not accepted and directed the petitioner to vacate the premises within 30 days which is not challenged, however, the petitioner did not vacate, hence, the respondents informed the petitioner that it is liable to pay damages; that no bill for license fee https://hcservices.ecourts.gov.in/hcservices/ was raised by the respondents and the petitioner was directed to deposit Rs.50 lakhs towards damages and the same would be adjusted after the competent authority quantified under the said heading; that the petitioner remitted Rs.20 lakhs on 05.05.2006 and after persuasion, remitted another Rs.30 lakhs on 08.06.2007; that the petitioner is liable to pay damages as per the existing Rules for their unauthorised occupation; that in the meantime, the second respondent has called for invitation of expression of interest for setting up of flying school/aircraft maintenance workshop at various airports in India, including Pondicherry Airport, which was published in The Hindu dated 17.03.2007 in which the petitioner also participated; that the petitioner has applied for permission to take a container containing two dismantled Cessna aircrafts to the hangers on a specific undertaking dated 15.06.2007 that in the event of the petitioner not being successful in the tender for flying school for pondicherry airport, they would vacate the premises; that the petitioner's tender was considered along with 29 tenderers; that the petitioner is one among the four tenderers shortlisted for submitting the financial bids; that two sites have been identified for setting up of two flying school at Pondicherry airport and the highest bidder would be offered one of the two sites and the second site would be offered to the second highest tenderer subject to the condition to match the bid of H1; that the petitioner was informed through the letter of the fourth respondent dated 09.01.2008 to give his willingness as to whether they could match the offer of H1, but the petitioner has not responded properly; that in view of the interim order dated 21.07.2007 granted by this Court in MP No. 1 of 2007 in WP No. 23809 of 2007, the respondents are unable to invite the H1 to select the site of their choice; that the respondents inadvertently mentioned in some of their communication, the tender notification and counter the transaction between the petitioner and the respondents as lease instead of license, hence, the additional counter affidavit dated 15.07.2008 was filed by them to the effect that they wrongly mentioned as 'lessee' in the earlier counter instead of 'licensee' and prayed to read it as 'licensee'; that Corrigendum dated 17.07.2008 was hosted in the website to that effect; that under Section 11 of the Act, the Airports Authority of India shall act on business principles in discharge of its functions under the Act; that Section 20 empowers the authority to enter into and perform and contract necessary for the discharge of its functions under the Act subject to the provisions of Section 21; that Section 21 deals with the mode of execution of contract and it empowers the authority to enter into contract by its Chairperson or such other member of such officer of the authority; that prior approval of Central Government is required in respect of any contract for acquisition or sale of immovable property or for lease of property if the contract period is more than 30 years; that in compliance of the above said provisions, the Government also framed regulations for classification of the contracts and regulation 2 of the AAI (Contract) Regulation 2003 clearly elucidates three classes of contracts wherein clause 2 (b) https://hcservices.ecourts.gov.in/hcservices/ clearly deals on contracts which can be executed with the approval of the authority; that it is clear from the reading of the above provision that the authority is empowered to enter into lease of its property upto 30 years; that Section 12 (A) (2) of the Act is not applicable to the case on hand; that approval of Central Government is mandatory only when the Airports Authority leases out the property to carry out the functions defined under Section 12 of the Act and setting up flying schools are not part of the functions as enumerated under Section 12 of the Act; that flying schools are meant to train pilots, who operate the aircrafts, so it relates to Airline's function whereas the respondents are managing the airports and providing Air Traffic Control and air navigational supports to the pilots who fly the aircrafts; that the respondents have established various training institutes and services under Section 12 (3) (d) and (q) of the Act and flying schools are not covered under the Act; that the advertisement dated 17.03.2007 is purely commercial and it is meant for generating income for the sustained growth of the authority; that the petitioner cannot take shelter under Section 12 (A) of the Act; that a Memorandum of Understanding was signed between the Airports Authority of India and State Government of Puducherry for expansion of Puducherry Airport; that as per the memorandum of understanding, the Puducherry government agreed to give 261 acres of additional land at their cost to the Airports Authority of India, at the first stage, in addition to existing 120 acres of land and the Airports Authority of India shall extend the length and width of the existing runway and the apron etc., and also connect terminal buildings and other buildings to facilitate ATR 72 operation at the initial stage and bigger aircrafts later on; that the Puducherry Government had already acquired 50 acres of land and handed over the same to the Airports Authority of India for the purpose of expanding the airport; that the acquisition proceedings in respect of adjoining 211 acres of land lying in the State of Tamil Nadu is also in progress; that Airports Authority of India also prepared a master plan and got it approved and floated tender for the work of expansion and strengthening of the runway at Pondicherry Airport; that the tenders were opened on 14.02.2008 and the work was awarded on 07.03.2008 to successful bidder namely M/s. Vishal Infrastructures Limited for a bid amount of Rs.19,77,45,342.30; that as per the terms and conditions of the work order, the contractor has to complete the work within six months from the 10th day after issuance of work order and complete it on or before 16.09.2008 but because of the delay, the work commenced only on 19.04.2008; that since the petitioner's institution is located in middle of the project site, the respondents are unable to proceed with the project work effectively; that without closing the airfield, strengthening/expansion of runway is not possible, particularly in a small airport like Pondicherry Airport; that the fourth respondent sent a communication dated 30.05.2008 stating that air field would be closed for undertaking airport expansion, runway extension/ strengthening; that the petitioner, without challenging the order of refusal of extension of lease challenged only the order dated 30.05.2008 in WP No. 13367/2008; https://hcservices.ecourts.gov.in/hcservices/ that the petitioner has been running the institute by collecting exorbitant fee from the students; that the respondents 2 to 4 being public sector undertakings cannot favour the petitioner alone, hence, they have rightly called for tender for setting up flying schools at various airports; that the petitioner has also participated in the tender and he was placed H2 and the petitioner was also called upon to match the offer made by H1, hence, WP No. 23809 of 2007 praying for renewal of license, WP No. 12577 of 2008 seeking to quash the tender notification dated 17.03.2007 and WP No. 13367 of 2008 seeking to quash the intimation dated 30.05.2008 for closing of airport are liable to be dismissed as untenable in law; that under Section 12 (q) of the Act, Airports Authority of India has power to establish training institute and workshop but they are for training of staff employed by the Airport Authority of India; that no approval under Section 12A of the Act is required for calling tenders to grant license for five years to establish flying schools and prayed for dismissal of all the writ petitions. 10. The arguments of both sides were considered and records produced by them were perused. The petitioner was granted license dated 28.10.1994 for construction of temporary building, structure or installations in the lands approximately measuring 33.5m X 35m at the Civil Aerodrome at Pondicherry for five years between 28.10.1994 and 27.10.1999. The petitioner and the second respondent entered into an agreement dated 28.07.1995. In and by the terms of the agreement, at the expiration of the said period, license could be renewed at the option of the Chairman of the second respondent for such period and upon such terms and conditions as the Chairman of the second respondent thinks fit and proper. The petitioner, while constructing the hanger encroached 51.12 sq.m. Of land over and above the land allotted to it, hence, the fourth respondent has sent a letter dated 12.01.1996 to the petitioner to stop the construction, however, the petitioner, in their letter dated 07.12.1995 pleaded for allotment of the said land, which was also granted by the respondents. At the expiry of five years, the petitioner submitted an application for renewal of license for further period of five years ending with 27.10.2004, which was also granted by the respondents. After expiry of second five years, the petitioner, in their letter dated 29.11.2004 requested the respondents to renew the license for further period from 27.10.2004 to 26.10.2009, which was rejected by the second respondent by their letter dated 06.07.2005 and called upon them to vacate the premises within 30 days from the date of receipt of the letter. The letter dated 06.07.2005 of the second respondent is extracted hereunder:- "Please refer your letter dated