This article is written by Shaily Garg, a Fourth year B.Com. LLB (Hons.) Student of University Institute of Legal Studies, Panjab University, Chandigarh.
This case specifically deals with the Doctrine of Election inscribed under Section 35 of the Transfer of Property Act, 1882. The doctrine of election is based on the principle of equity that one cannot take what is beneficial to him and disapprove of that which is against him under the same instrument. One cannot approbate and reprobate at the same time. In simple words, where a person takes some benefit under a deed or instrument, he must bear its burden.
Facts of the Case
M/s Golden Chariot Airport is a registered Partnership Firm (Respondent) that succeeded in a tendering process for running a deluxe grade-1 restaurant, covering a space of 5000 sq. ft. in the car park zone in front of Terminal 1A of the Mumbai International Airport. In respect to this establishment of a deluxe restaurant, a Licence Agreement dated 16th January 1996 was entered into between the Airport Authority of India (AAI) and the Respondent Firm and it is valid for three years i.e. from 27.11.1995 to 26.11.1998. It was urged by the Respondent that the Licence Agreement is irrevocable and apart from this, there has been an oral extension of the licence up to 26.05.2000. Since, the respondent was assured that the licence is irrevocable, it has invested considerable money in building the restaurant. However, there are several other clauses in the General Terms and Conditions, which are a part of Licence Agreement and clearly show that the licence is not irrevocable. Also, the provisions of the Public Premises (Eviction of Unauthorized Occupants) Act, 1971 and the Rules framed thereunder have been made applicable to the Licence Agreement.
Before the expiry of such licence period, a notice was sent by the AAI to the respondent, requesting it to vacate and hand over physical possession of the licensed premises on expiry of the extended licence. After receiving this notice, the respondent filed a suit in the Bombay Civil Court, praying for canceling the notice and for a permanent injunction restraining AAI from eviction. This suit was rejected in the Bombay City Civil Court on the ground that this Court does not have the pecuniary jurisdiction to hear the case under Order VII Rule 10 of CPC.
Aggrieved by this, an appeal before the Bombay High Court was made by the Respondent in which they amended the plaint and drop the prayer in Clause (a) of the plaint, which is the prayer for the declaration that the licence is irrevocable. Accordingly, an order was passed under the provisions of the Public Premises (Eviction of Unauthorized Occupants) Act, 1971 and Rules framed thereunder and held that the AAI was bound to follow the due process of law for evicting the respondent from the suit premises under the 1971 Act, and proceedings were initiated before the Estate Officer where it was held that the respondent was in unauthorized occupation of the licenced premises, which was a public premise and it was liable to be evicted from the said premises under Section 5 of the 1971 Act.
Now, between 2003 to 2006, when the case was unsettled, the Union of India, through its Ministry of Civil Aviation, came out with a policy for the privatization of airports. Resultantly, the Airports Authority of India Act, 1991 was amended by the Airports Authority of India (Amendment) Act, 2003. Accordingly, Mumbai International Airport Private Ltd. (MIA) was incorporated and enter into contracts with third parties for the said purpose. An appeal was made by the respondent in the Bombay High Court where the order of the new Estate Officer was declared null and void for his failure to case himself as he had verbatim reproduced the entire order. This order of the Bombay High Court was challenged by both AAI and MIA in a separate SLP which were heard together in this case.
Issues raised in the Case
- Whether there was an oral assurance for an extension of the licence to the extent that relying on such contention, the respondent made a substantial investment for constructing the restaurant?
- Whether the licence between the parties was irrevocable?
Contentions of the Parties
It was contended by the counsel of the Respondent that there was an oral assurance for an extension of the licence to the extent that it made them rely on such assurance. Also, a substantial investment was made by them for constructing the restaurant. Since the licence is irrevocable and hence, they cannot be evicted from the premise of Mumbai Airport.
Contrary to this, it was contended by the counsel of the Appellant that the construction having been completed and the restaurant being operational before the elapse of licence period, the respondent does not need to urge that it invested money in the construction of the restaurant on the oral assurance by the officers of the AAI about an extension of the licence to make it irrevocable. Also, the clauses of the licence clearly show that the licence is revocable.
Observations of the Court
AAI is a statutory corporation and it is bound by the Act and the Regulations framed under the Act. Hence, it was held that there was no oral assurance of extension of licence which was contemplated in the facts of the case and therefore, this contention is wholly misconceived. A contractual licence is revocable or not depends on the express terms of the contract. It is normally revocable, except in certain circumstances that are expressly provided for in the Indian Easement Act, 1882. The stand of the respondent that its licence is irrevocable as it has invested money in the premises and made construction is directly contrary to the stand which it took before the Bombay High Court and which was recorded in the High Court’s Order where an amendment made by the Respondent in the Plaint of deleting the prayer in Clause (a) of the plaint, which is the prayer for the declaration that the licence is irrevocable i.e. expressly giving up its claim of irrevocable licence to revive the suit. It is clear that the respondent has taken a stand before a Court of Law and also got the benefit as a result of taking such stand in as much as it got the suit revived and tried and got the benefit of an interim order in the said proceedings i.e. the respondent gets the interim protection from 2001 to 2004 and ran the restaurant during that period. The respondent on a complete volte-face of its previous stand cannot urge its case of an irrevocable licence before the Estate Officer and now before this court. The litigant cannot change and choose its stand to his convenience and prolong civil litigation on such prevaricated pleas. In this case, the respondent having elected to give up the plea of irrevocability of licence and taking advantage on that basis cannot be permitted to disown his stand by raising the same plea again.
From all the above observations and precedents laid down, it was held by the Court that the contesting respondent has blown hot and cold by taking an inconsistent stand, and has therefore prolonged several proceedings for more than a decade. Therefore, the civil appeals of the Appellant i.e. Airport Authority of India and Mumbai International Airport Limited are accepted. Also, an exemplary cost of Rs. 5 Lakhs was awarded against the Respondent.