PVR INOX multiplex at Chennai airport's Aerohub faces closure due to legal dispute

The Hindu

19-06-2025

The five-screen PVR INOX multiplex operating at the Aerohub, a commercial space attached to the multi-level car park (MLCP) in Chennai airport, is facing a threat of closure since the Airports Authority of India (AAI) had taken a stand that operation of a cinema hall is not a permissible activity under the AAI Act of 1994.
Justice N. Anand Venkatesh of the Madras High Court has, however, directed the AAI to maintain status quo until the authority considers and disposes of, in accordance with law, a representation made to it by PVR Inox on May 29, 2025 seeking permission to continue its operations at the Aerohub.
The direction was issued after Additional Solicitor General AR.L. Sundaresan, assisted by AAI standing counsel Ramaswamy Meyyappan, told the court that AAI would certainly a take decision in line with Articles 41 and 42 of the MLCP development agreement and convey it to the multiplex chain.
The orders were passed while disposing of a writ petition filed by PVR INOX to restrain AAI from interfering with the operation of the multiplex. Senior counsel P.S. Raman, representing the petitioner, told the court that AAI had invited tenders in 2017 for development of the MLCP with integrated commercial infrastructure at the Chennai airport.
The dispute
Olympia Techpark (Chennai) Private Limited turned out to be successful bidder and it floated a special purpose vehicle titled Meenambakkam Realty Private Limited which, in turn, entered into a development agreement with AAI in 2018 to develop, build, operate and maintain the facility for a period of 15 years.
Thereafter, AAI obtained environment clearance from the Union Ministry of Environment and Forests in December 2018 and the application for environment clearance specifically included the area earmarked for the multiplex. Therefore, AAI was fully cognizant of the construction of cinema halls even as early as in 2018, Mr. Raman said.
He added that AAI had also sanctioned the construction plans in 2019 and 2021 which had explicit mention about the cinema halls in the Aerohub and that in 2021, the authority had sought a No Objection Certificate (NOC) too from the Greater Chennai City Commissioner of Police for the cinema halls.
It was only on the basis of all these documents, PVR INOX had entered into a sub-licencing agreement with Meenambakkam Realty in November 2022 for operating the multiplex and commenced screening movies from February 1, 2023. The sub-licencing tenure was for a period of 13.5 years.
However, on July 21, 2023, the AAI wrote a letter to Meenambakkam Realty stating it had been decided to close down the multiplex since running of cinema halls was not permissible under the AAI Act. The letter had been signed by Joint General Manager (Commercial) M. Selvanayagam on behalf of the Airport Director.
Immediately, Meenambakkam Realty approached the Delhi High Court and obtained an interim order. Thereafter, an arbitral tribunal was constituted to resolve the dispute and the tribunal, in February 2024, stayed the operation of the July 2023 letter thereby providing interim protection to the developer.
Premature termination
Thereafter, the interim order was vacated and Meenambakkam Realty conveyed a startling information to PVR INOX on May 15, 2025 that its 2018 development agreement with AAI had been terminated prematurely and that AAI had decided to maintain the entire 2,47,202 square feet complex constructed on 4.5 acres of land on its own.
However, since Articles 42 and 43 of the development agreement empowers AAI to permit sub-licencees to continue on mutually negotiable terms and conditions, PVR INOX had given a representation to the authority on May 29 to permit the operation of the multiplex dehors the termination of the agreement with Meenambakkam Realty.