Turkish company Celebi moves Madras HC to challenge cancellation of services contract at Chennai airport

Turkish company Celebi's subsidiary has moved the Madras High Court seeking an interim injunction on the Airports Authority of India's decision to cancel its concession agreement for the Chennai Airport, LiveLaw reported on June 9.

The company is seeking Madras HC intervention over AAI's cancellation of the concession agreement, after the Bureau of Civil Aviation Security (BCAS) removed its security clearance, it added.

Chennai Airport had cancelled its contract with Celebi Ground Services Chennai on May 26, the report said.

What Celebi argues...

Addressing the Madras HC bench of Justice Abdul Quddhose for Celebi, advocate PS Raman told the court that the company made huge investments for equipments and software, adding that the AAI was attempting to appoint a third parties, who would exploit these tools, the LiveLaw report stated.

Raman added that the sudden cancellation caused huge financial loss to the company, and was done due to "vendetta". The injunction has been sought over creation of third-party rights that would "irretrievably impact the rights" of Celebi, pending a verdict in the case.

He also referred to the Bombay HC's interim order in regards to a similar cancellation by the Adani Enterprises-run Mumbai aiport.

What has AAI said...

Appearing for the AAI, Solicitor General Tushar Mehta told the court that appointing a third party is "necessary" for smooth functioning and passenger convinience. He added that a party will be appointed via tender process, subject to court proceedings pending before the Delhi HC over denial of security license for Celebi.

Mehta further dismissed the relevance of the Bombay HC order, stating that Mumbai airport is run by a private entity, unlike Chennai airport, which is a government-run one.

What did the Court say?

• The court noted that Chennai Airport would have to "necessarily appoint a third ground handling contractor" in public interest and for smooth operation of facilities.
• It however asked the SG or ASG to submit an undertaking that the Celebi owned equipment would not be used by the third party.
• It also noted that the appointed third party must be through tender, subject to proceedings pending before the Delhi HC.
• Celebi has been allowed to enter the airport premises for an inventory of its equipments, with prior approval from the authorities. No objection to the inventory has been permitted by the AAI.
• In case of any violation, the HC gave Celebi “liberty to approach the court”.
• The bench also directed AAI to file their counters to the petitions and adjourned the hearing to July 7.