Property and Contract under the Airport Authority of India Act

The Airport Authority of India Act, 1994 is a comprehensive piece of legislation that governs the operation and management of Indian airports. The Airport Authority of India (AAI) is established as a statutory body under the Act for the development, maintenance, and management of civil aviation infrastructure in the country. This Act governs two critical aspects: property and contracts. Sections 13 to 21 of Chapter IV contain provisions relating to property and contracts.

National Airports Authority and the International Airports Authority

All assets, rights, powers, authorities, and privileges that were previously owned by the International Airports Authority or the National Airports Authority has transferred and vested in the Authority. This includes all kinds of movable and immovable property such as lands, buildings, machinery, equipment, works, workshops, cash balances, investments, tenancies, leases, and book debts, as well as any other rights and interests related to this property, regardless of their location.

The Authority will also take over all the books of account and documents related to this property. Moreover, the Authority will assume all kinds of borrowings, liabilities, and obligations of the International Airports Authority or the National Airports Authority related to their respective undertakings.

The General Effect of Vesting of Undertaking in the Authority

According to Section 14 of the Act, all existing contracts, agreements, and working arrangements that are currently in effect and are related to the International Airports Authority or the National Airports Authority will cease to be valid against these authorities. However, they will continue to be in force and enforceable against or in favor of the authority that has taken over the undertaking under this Act. This means that the contracts and agreements will be binding on the new authority, and they can be enforced just as if the new authority had been named in them or had been a party to them from the beginning.

The International Airports Authority and the National Airports Authority may continue and enforce any proceedings, suits, or causes of action pending or existing by or against them as of the appointed day with regard to their undertakings by or against the Authority in which they have vested under the terms of this Act, or as they would have been if this Act had not been in place.

Licenses, etc., to be deemed to have been granted to the Authority

Section 15 provides that all licenses, permits, quotas, and exemptions granted to the International Airports Authority or the National Airports Authority under any law in force in connection with the operations and business of the International Airports Authority, or as the case may be, the National Airports Authority, shall be deemed to have been granted to the Authority on the appointed day.

Guarantee to be Operative

Section 17 of the Act states that if any guarantee was given for or in favor of the International Airports Authority or the National Airports Authority in relation to a loan or lease finance, then that guarantee will continue to be valid and effective for the new Authority, which has taken over the responsibilities of the International Airports Authority and the National Airports Authority under this Act. This means that any guarantee given before the appointed day will still be considered operative and enforceable for the new Authority.

Compulsory Acquisition of Land for the Authority

Section 19 of the Act provides that if the Authority requires any land to carry out its functions as per this Act, then such land will be considered necessary for a public purpose. The Authority will be allowed to acquire the land it needs under the Land Acquisition Act, of 1894 or any other similar law that is in force.

Mode of executing contracts on behalf of the Authority

Section 21 provides that the contracts on behalf of the Authority can be made by the Chairperson, another member of the Authority, or an officer empowered by the Authority to do so. Contracts that the Authority specifies or those which exceed a certain value as fixed by the Central Government must be approved by the Authority before being made.

For contracts for the acquisition or sale of immovable property or for leases exceeding thirty years or contracts that exceed a certain value as fixed by the Central Government, approval from the Central Government is required before they can be made.

The regulations specify the form and manner in which the contracts should be made. Contracts that are not made in accordance with the provisions of the Act and regulations will not be binding on the Authority.

Conclusion

The Airport Authority of India Act of 1994 governs contracts entered into by the authority. The Act gives the authority to enter into contracts for airport development, maintenance, and management. Contracts entered into by the authority are subject to the provisions of the Act.

Frequently Asked Questions

Q1. Who can make contracts on behalf of the Authority?

Ans. Contracts on behalf of the Authority can be made by the Chairperson, or another member or officer of the Authority who has been empowered to do so by the Authority.

Q2. Are there any restrictions on the value of contracts that can be made?

Ans. Yes, contracts exceeding a certain value or amount must be approved by the Authority and, in some cases, by the Central Government.

Q3. Can contracts for the acquisition or sale of immovable property be made without prior approval?

Ans. No, contracts for the acquisition or sale of immovable property, as well as contracts exceeding a certain value or amount, must be approved by the Central Government before they can be made.

Q4. What happens if a contract is not in accordance with the provisions of this Act and the regulations?

Ans. A contract that is not in accordance with the provisions of this Act and the regulations will not be binding on the Authority.