Place Where Cinema Multiplex Is Established Would Fall U/S 28-A Of Airports Authority Of India Act: Madras High Court

The Madras High Court held that the place where the cinema multiplex is established would fall under Section 28-A (a) of the Airports Authority Of India Act, 1994 (AAI Act).

The Court held thus in Writ Petitions challenging the letter by which AAI had called upon the PVR INOX Ltd. for closure of its lawful operation of its multiplex in the Multi-Level Car Parking Complex (MLCP) at Chennai Airport.

A Single Bench of Justice M. Dhandapani observed, “… it could safely be concluded that the place where the cinema multiplex of the petitioner is established would fall u/s 28-A (a) of the AAI Act which will be in an unrestricted zone and would not be within the term ‘airport’ as defined u/s 2 (b) of the AAI Act, which would only attract activities, that are permissible within the restricted zone.”

The Bench said that where there is no express and explicit prohibition, it is within the realm of the authority to grant permission for the running of a particular activity, but when there is an express and explicit prohibition, the authority is denuded of any power to grant any permission.

Senior Advocates P.S. Raman and Sathish Parasaran represented the Petitioners, while ASG AR.L. Sundaresan represented the Respondents.

Facts of the Case

The formation of a MLCP Complex in the Chennai Airport was conceived, developed and executed in which various activities, including a multiplex containing a cinema hall was sought to be developed, which was approved by resulting in the construction of a cinema hall, which had the approval of the Respondent-AAI on the basis of the Development Agreement entered into with a private company.

However, later in point of time, the AAI vide its letter had taken a position that the operation of a cinema hall cannot be given effect to as the said operation is not a permissible activity under the AAI Act, which according to the Petitioner was in clear derogation of the AAI’s contractual obligations and also the directions passed by the High Court ordering maintenance of status quo.

Court’s Observations

The High Court after hearing the contentions of the counsel, noted, “Any landing and taking off area for aircrafts together with runways, aircraft maintenance space, passenger facilities and including aerodrome would come with the ambit of the term ‘Airport’ as it evident from the above provision.”

The Court said that screening of cinema is not an activity, which is specifically spelt out under Section 12 so also, there are many activities, which, as pointed out by the Petitioner, not being disputed by the Respondent, have been permitted to be carried on in the outer periphery/unrestricted zone, which have also not been spelt out under Section 12 and, therefore, singling out cinema activity alone as an impermissible one since it has not been specifically spelt out under Section 12 cannot be accepted.

“Necessarily ‘Airport’ is an expansive term, but the list of activities, which are to be performed are captured in a nutshell in the definition of ‘airport’, which gives an understanding as to the activities that could be permitted. It is to be pointed out that where there is no explicit prohibition, permission could be granted and if there is an explicit prohibition, no permission could be granted. Therefore, necessarily, the definition of ‘Airport’ has to be looked at with a larger lens, as it takes within its fold restricted and unrestricted zones”, it added.

The Court enunciated that the unrestricted zone, where the cinema multiplex of the Petitioner as also the other activities, which have been permitted by the Respondent are being carried out, will fall within Section 28-A (a), as it would relate to premises, which is not only within the vicinity or adjoining the airport, but also any other premises, which is held by the Respondent and belongs to the Respondent.

“Therefore, technically, the said portion though not airport as defined u/s 2 (b), but it is the airport premises, as defined u/s 28-A (a) and, necessarily would be within the control of the 1st respondent. … Therefore, the unrestricted zone adjoining the airport would squarely fall u/s 28-A (a) of the AAI Act as it would be the premises belonging to the airport and would be part of the airport, though would not stand covered by the term ‘airport’ as defined u/s 2 (b) of the AAI Act, as only activities of a restricted nature and for specific purposes could be taken up within the security zone of the airport, as provided u/s 2 (b) and not all and sundry purposes, which would be in the commercial interests of the airport”, it further observed.

The Court held that the cinema multiplex, which is run by the Petitioner, though is situated within the airport premises, but definitely it is not within the definition of ‘airport’ as defined under Section 2 (b), but would only fall u/s 28-A (a) of the AAI Act and therefore, necessarily, the cinema multiplex cannot be held to be situated within the restricted area of an ‘Airport’ as defined u/s 2 (b) and further, there is no express prohibition u/s 12 (3) of the AAI Act for running of a cinema multiplex within the airport premises, as the said cinema multiplex is not situated within the confines of ‘Airport’ as defined u/s 2 (b) of the AAI Act.

“From the above communications between the petitioner and the 2nd respondent, it is clear beyond a shadow of doubt that the nuances in the sub license agreement, more pertinent in relation to the Development Agreement between the 1st and 2nd respondent, inclusive of the co-terminus nature of the sub-license deed was very much within the knowledge of both the petitioner and the 2nd respondent which was to have been independently assessed by the petitioner by exercising due diligence. In fact, it is admitted by both the petitioner and the 2nd respondent that the right of continuance of a sub-license entered into with a sub-licensee with the 2nd respondent is subject to the discretion of the 1st respondent and that the continuance is not a matter of right”, it added.

Conclusion

The Court also held that there is no privity of contract between the Respondent and the Petitioner and the termination of the Development Agreement by the company would result in automatic termination of the sub-license and the AAI cannot be forced to negotiate with the Petitioner either under the terms of the Development Agreement or under the terms of the sub-license deed and the Petitioner cannot have any legitimate expectation against the Respondent to honour the sub-license.

“On issue No.4, this Court holds that upon termination of the Development Agreement, while the 1st respondent steps into the shoes of the 2nd respondent for the takeover of the MLCP Complex and all the associated activities, however, discretion is vested with the 1st respondent for the purpose of negotiating with the sub-licensees for grant of license to carry on the activities and the 1st respondent cannot be forced to negotiate with the sub-licensees for granting sub license. Further, the doctrine of promissory estoppel is not applicable to the facts of the present case”, it added.

The Court was of the view that though Article 42 of the Development Agreement provides for negotiations between the sub-licensee and the Respondent upon termination of the Development Agreement by the company, discretion is vested with the Respondent to enter into negotiation and no direction can be given to the Respondent in spite of the fact that the activity of the Petitioner is not prohibited u/s 12 r/w 2 (b) of the AAI Act.

“The 1st respondent is directed to place the issue with regard to establishment of cinema multiplex within the secured/unsecured zone of the airport/airport premises before the Ministry of Civil Aviation, Government of India, with due emphasis on Section 12 (3) within a period of four weeks from the date of receipt of a copy of this order so as to enable the Ministry of Civil Aviation, Government of India to take a policy decision on this aspect”, it directed and concluded.

Accordingly, the High Court disposed of the Writ Petitions and directed the Ministry of Civil Aviation, Government of India to consider the issue and take a policy decision on the issue with regard to permitting of cinema multiplex within the secured/unsecured zone of the airport/airport premises as expeditiously as possible.

Cause Title- PVR INOX Ltd. v. Airports Authority of India (Case Number: W.P. Nos.22968-23060/2025)

Appearance:

Petitioners: Senior Advocates P.S. Raman and Sathish Parasaran.

Respondents: ASG AR.L. Sundaresan, Advocates Ramaswamy Meyyappan, and Abhishek Jenasenan.

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