New Bharat Enterprises rep by its Proprietor Ranjith Madhavan Mumbai v. Airports Authority of India rep by DGM (Commercial) Chennai
2011-03-16
P.JYOTHIMANI
body2011
DigiLaw.ai
Judgment :- 1. Heard Mr.K. Doraisami, learned Senior counsel for the petitioner and Mr.Vijay Narayan, learned Senior Counsel for the respondent. By consent, the writ petition itself is taken up for final disposal. 2. The said writ petition is filed apprehending non settlement of the amount by the respondent, who is liable to refund the deposit amount of Rs.6,16,74,216/- made pursuant to the lease agreement and is likely to forfeit the amount. Therefore, the present writ petition has been filed. 3. The Writ Petition is filed challenging the order of Airport Authority of India dated 13.1.2011, by which, the respondent has directed the petitioner to settle the amount of Rs.4,57,11,957/- immediately and also furnish a fresh Bank Guarantee valid for a period of three years for an amount of Rs.4.37 crores in respect of Service Tax arrears disputed and covered under the order passed by this Court in W.P No.45079 of 2006. 4. Admittedly, the period of license has come to an end by 15.11.2010. As per Clause 7 of the License Agreement, the petitioner has deposited an amount of Rs.6,16,74,216/-, which is the amount equal to six months licence fee as security deposit in the form of Bank Guarantee from a Nationalised Bank. The conditions, subject to which such deposit was made, was enumerated in clause 7 of the agreement, which reads as follows: "That the Licensee shall deposit a sum of Rs.6,16,74,216/0(Rupees Six Crore Sixteen Lakh Seventy Four Thousand and Two Hundred Sixteen only) i.e., an amount equal to six months licence fee as Security Deposit in the form of Fixed Deposit Receipts (FDRs)/Rolling Bank Guarantee from a Nationalised/Scheduled Bank in favour of Airport Director, AAI, Chennai Airport. In the event of the Licensee committing any breach of the terms and conditions of the licence agreement, the Authority may without prejudice to other rights and remedies be entitled to forfeit the Security Deposit or any part thereof. In such an event he shall pay in the same manner as stated above such additional sum immediately as he may be called upon by the Authority to pay, so that the Security Deposit shall at all times during the continuance of these presents, be for the same amount. On the expiration or earlier determination of the licence the Authority shall return the Security Deposit or part thereof which has not been forfeited as aforesaid, to him, without interest". 5.
On the expiration or earlier determination of the licence the Authority shall return the Security Deposit or part thereof which has not been forfeited as aforesaid, to him, without interest". 5. In respect of the licence fee payable by the petitioner based on the said lease, there has been some dispute regarding the liability to pay service tax as to whether the same has to be paid by the licensee directly or through the Airport Authority. The petitioner has already approached this Court by filing a writ petition in W.P No.45079 of 2006 challenging the said claim of service tax. Pending the said writ petition, the petitioner filed a Miscellaneous petition for interim injunction restraining the respondents from imposing or collecting service tax in any form on the license fee payable by the petitioner for car parking counter at International and Domestic Airport at Chennai and Madurai. This Court has granted an order of interim injunction on 22.11.2006 and the said writ petition is pending and admittedly, interim order also continues. Inspite of the same, the impugned order came to be passed by the respondent directing the petitioner to settle the amount of Rs.4,57,11,957/- immediately and also furnish a fresh Bank Guarantee valid for a period of three years for an amount of Rs.4.37 crores in respect of Service Tax arrears disputed and covered under the order passed by this Court in W.P No.45079 of 2006. 6. The remaining amounts which are liable to be paid as per the impugned order are the minor amounts as submitted by the learned Senior counsel for the petitioner. In respect of the remaining amount, the same will be settled in the course of time. Therefore, the crux of the issue is only in respect of the Service Tax arrears (disputed) for an amount of Rs.4,36,94,899/-, which can be conveniently rounded of to Rs.4.37 crores. 7. The learned senior counsel for the petitioner would submit that even though by virtue of the order of interim injunction granted by this court, there is no obligation on the part of the petitioner to pay the said amount since the same is still to be decided by the Court, as a former lessee under the respondent.
7. The learned senior counsel for the petitioner would submit that even though by virtue of the order of interim injunction granted by this court, there is no obligation on the part of the petitioner to pay the said amount since the same is still to be decided by the Court, as a former lessee under the respondent. The petitioner is willing to give security for the amount and he is prepared to furnish Bank Guarantee in respect of 50% of the dues claimed under the Service Tax dues in the impugned order and in respect of the remaining 50%, the petitioner is willing to offer Indemnity Bond in favour of the respondent so as to protect the respondent Organisation till the disposal of the writ petition in WP No.45079 of 2006. He also fairly submits that in respect of the remaining amount, the same will be settled with the respondent. 8. Considering the facts and circumstances of the case and taking note of the fact that admittedly the writ petition in respect of the obligation for payment of service tax is pending before this court and the petitioner has got an order of interim injunction restraining the Department from recovery of the service tax, I am of the considered view that a workable order can be passed to protect the interest of both the parties. 9. Accordingly, the writ petition is disposed of with the following terms: a) The petitioner shall furnish a fixed deposit in respect of 50% of the amount of service tax claimed under the impugned order which has been rounded of as Rs.4.37 crores jointly in the name of the petitioner and the respondent which shall be kept valid for a period of three years; b) in respect of the balance 50% relating to the service tax due claimed under the impugned order, the petitioner shall furnish due indemnity bond to the satisfaction of the respondent c) the petitioner shall settle the balance amount claimed under the impugned order by the respondent by making payment of the said amount. d) On compliance of the above said conditions, the respondent shall release bank guarantee for a sum of Rs.6,16,74,216/- in favour of the petitioner and the above said order is subject to the final decision in the writ petition in WP No. 45079 of 2006 and without prejudice to the contentions raised by the parties therein.
d) On compliance of the above said conditions, the respondent shall release bank guarantee for a sum of Rs.6,16,74,216/- in favour of the petitioner and the above said order is subject to the final decision in the writ petition in WP No. 45079 of 2006 and without prejudice to the contentions raised by the parties therein. e) It is open to the petitioner and the respondent to work out the modality for compliance of these conditions. 10. No costs. Consequently, connected Mps are closed.