Air India likely to end up losing more money than it will collect from its GSA in Tehran

It looks as though Air India will end up losing more money than it will collect from its defaulting general sales agent (GSA) in Tehran. On April 8, the manager of Ajanta Sales Agents, Firouz Madan, filed a complaint with the Tehran police that Air India was shifting premises illegally and thus causing him financial loss.In fact, Air India was moving to new premises in Northern Tehran, off the busy and more exclusive Takht-a-Tavoos road. The move from its familiar but crowded southern address was not only one of convenience, it was also to make a clean break from its GSA who owes the airline Rs 20 lakh.Too Close: The former office housed the sales agent on the ground floor and Air India on the first. Air India, having broken with an agent who had been with it for 15 years, ordered pick-up vans and loaded its ledgers and documents. About half of the furniture and stocks had been removed to the new office when blue uniformed Iranian policemen moved in politely.As India's relations with Iran are good, the policemen were not rude. But they took the Air India Manager, Albert Gonsalves and his staff to the police station. After a case was filed the Air India staff were released. Diplomats at the Indian Embassy heaved a sigh of relief when Gonsalves and his men trooped back from the police station in the evening, for in revolutionary Iran, few men and women taken into custody return so quickly.Firouz Madan, is an Iranian of Indian origin and is well-known among Indian circles in Tehran. He was undone by the revolution and most of his financial supporters, big names in the Shah's regime, fled the country in the wake of the revolution. He was left owing an enormous sum of money to Air India. Madan had neither the money nor the minimum staff to carry on his duties as a sales agent when business boomed for a short time after the revolution - until the Iran-Iraq war broke out. Despite that, for several months before the war, Air India did handsomely. Sales were a record Rs 250 lakh during 1980, almost double that of 1979 and higher than ever before the war eventually put an end to the boom.Two Agreements: Air India told India Today in New Delhi that they had two agreements with Madan. Under one, his firm Ajanta SA was to act as their GSA for cargo and passengers and under the other he was to handle all flights to Tehran.They said the claim against him was originally Rs 56 lakh which was whittled down to approximately Rs 20 lakh after legitimate adjustment of the debits and credits. Attempts were made to arrive at a compromise figure. When these proved unsuccessful Air India resorted to the arbitration clause in the agreement and the matter is now before a Tehran court.Both agreements were both reportedly very favourable to Madan. Air India was to pay handling charges in sterling which were to be converted into Iranian currency at higher rate than the one prevailing. At the time Air India flew to Tehran four times and the agreement also stipulated that if they failed to operate any flights they would still have to pay the agent 50 per cent of his handling charges. Trouble first arose in 1974 during the pilots strike. This was solved amicably when Air India increased the number of its flights to Tehran.Heavy Debts: In 1980 trouble cropped up once again when Air India had to cancel flights because of the Iran-Iraq war. By this time Madan was heavily in debt to Air India. Instead of paying these debts he began adjusting them against what he claimed was the penalty due for cancellation. He also stopped replying to Air India's letters but continued bookings for them as their GSA. Air India tried to wheedle Firouz Madan into settling his bills, at least those which had crossed the 60-day notice period. He did make some effort but there is almost no hope that he will pay back anything more.There is little Air India can do to get its money back. Iranians themselves are trying to find out who exactly is in power and as to which institutions can dispense justice. Air India, an outsider, can only rely on the newly generated goodwill for its country. But now, the tables have been turned. From a possible complainant, Air India has become a defendant. No one knows what kind of court, or what kind of judge, is going to hear the pleas of the Maharaja.Published By: AtMigration Published On: Feb 24, 2014 12:09 IST--- ENDS ---

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Air India likely to end up losing more money than it will collect from its GSA in Tehran

It looks as though Air India will end up losing more money than it will collect from its defaulting general sales agent in Tehran.

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