Stop Wasting Public Time, HC Tells Warring PSUs

New Delhi, Nov 14: | Updated: Nov 15 2003, 05:30am hrs
The Delhi high court (HC) has reminded public sector undertakings (PSUs) and the Union of India that they should not fight their litigations in Court spending money on fees of counsel, court fee, procedural expenses and wasting public time.

Courts time is not to be consumed by litigations which are carried on either side at public expense from the source. Notwithstanding these observations repeated on a number of occasions, the present cases appear to be an instance of total callousness, Justice BC Patel and Justice AK Sikri reminded in their order today, citing a Supreme Court judgement in 1992 involving ONGC and a collector of central excise.

The judges refused to be drawn into the specifics of a quarrel between tourism ministrys India Tourism Development Corporation (ITDC) and civil aviation ministrys Airports Authority of India (AAI). Instead, they asked the tourism minister and the civil aviation minister to sit together and to decide the matter on or before 12 noon on November 17.

It is hoped that the petitioner shall submit the copy of this order to both the honble ministers, who may call the parties thereafter for deciding the dispute, Justice Patel and Justice Sikri said. The judges asked for a copy to be sent to the the two ministers under the signatures of the Court Master today itself.

ITDC, the present-day monopoly in the business of duty free shops at Indias international airports, had invoked the HC. Its complaint was that AAI, the custodian of the countrys civilian airports, has refused to part with application forms for the global tenders of new duty free shops at major airports. The tender opens on November 17. AAIs counter ITDC owes us around Rs 19.5 crore. So, as per one of the pre-conditions in the global tender, it stands disqualified.

There is a second pre-condition that AAI had invoked. Disputed dues should have been referred to an arbitrator. This hadnt been done.

Therein lies a twist. ITDCs complaint is that AAI has been dragging its feet over the appointment of an arbitrator. Earlier this month, ITDC chairman Amitabh Kant wrote a this-is extremely-unfair letter to SK Narula, his opposite number in AAI, seeking personal intervention. But Mr Narula didnt oblige. Result The ITDC courier was refused the tender form.

Earlier, tourism secretary Rathi Vinay Jha wrote to civil aviation secretary K Roy Paul without success. Ms Jha suggested the name of V Subramanian, additional secretary and financial advisor (FA) as the arbitrator. Nothing happened even though Mr Subramanian is the FA to both tourism ministry and the ministry of civil aviation.

ITDC has requested AAI for relief in the rentals of existing duty free shops. The plea is the drop in international travel due to 9/11, the December 13 attack on Parliament, the war in Afghanistan and Iraq, and the outbreak of Severe Acute Respiratory Syndrome in East Asia. A number of neighbouring countries have voluntarily offered relief in rentals and royalty to duty free operators: such a step has also helped these airports improve their revenues and foreign exchange retentions, Ms Jha has argued before Mr Paul.

Mr Kant has cited examples of airports in Los Angeles, Hong Kong, Singapore, and Kuala Lumpur. A minimum guaranteed turnover (MGT) clause has been a common feature in the tenders of all these duty free concessions. But airport authorities havent enforced this legal binding. Kula Lumpur, for example, issued a 50 per cent cut in rentals between June-Dec 2003.

The annual MGT of $25 million for payment of gross turnover related royalty was fixed by AAI and not ITDC. Based on the assumption that AAI would help in generating the MGT, the bidder was required to quote the percentage of royalty payable by them on this MGT for each year in succession. However, owing to extraneous, unforeseen and unprecedented circumstances there was a sharp decline in international travel and AAI could not provide the necessary opportunities for achieving the MGT of $25 million, Mr Kant has argued before Mr Narula. Accordingly, he has requested for royalty on actual turnover.

The global tender being opened on November 17 includes development and running of duty free shops at Delhi, Kolkata, Mumbai, Chennai and Thiruvananthapuram. Under specific conditions for non-issuance of tender it says that tender documents shall not be issued to the parties falling under the following categories: ex-licensee(s)/ existing licensee(s) of AAI having outstanding dues except the disputed dues referred to an arbitrator as per terms and conditions of the license agreement.

ITDC officials say they need to stay on in the duty free business at all costs. It is believed that DFS, Alpha, Nuance, Tuxedo, SUTL, King Power, and Flamingo are planning to bid for the current tender. Jagmohan is the tourism minister and Rajiv Pratap Rudy is the minister of state (independent charge) for civil aviation. The HC has not referred to either minister by name.