Will not decide on AirAsia deal before Dec 11: Centre to HC

Written by Press Trust of India | New Delhi | Updated: Oct 31 2013, 07:05am hrs
The Centre today assured the Delhi High Court that no final decision will be taken on the AirAsia deal till December 11, the next date of hearing on the plea filed by BJP leader Subramanian Swamy seeking a stay on it.

Appearing before a bench of Chief Justice N V Ramana and Justice Manmohan, Solicitor General Mohan Parasaran said,

"Nothing will happen till then".

The senior law officer was answering to a court's query as to what is the government's stand on Swamy's plea seeking a stay on the deal.

Raising objection to the maintainability of the plea, Parasaran said a PIL cannot be maintained on such issue like AirAsia as the policy does not affect general public.

Referring to the government's affidavit, the bench said no final decision has been taken on the approval of the deal.

However, Swamy argued that the government has made a relaxation in the FDI policy because of the cash strapped in aviation sector.

During the hearing, Swamy informed the bench the Centre is scheduled to take decision on the AirAsia deal on December 11.

After hearing the parties, the bench fixed December 11 for further hearing of the matter.

Swamy in his plea has sought a direction for restraining Centre from taking any decision or granting any other approval contrary to the applicable FDI policy and DGCA guidelines or granting any approval for foreign investment by a foreign airlines in a greenfield airline project.

Swamy had first moved the apex court which had asked him to withdraw the petition and approach the high court for agitating his case.

In April this year, the Foreign Investment Promotion Board (FIPB) gave clearance to the USD 30 million deal between Malaysia-based AirAsia and Tata Sons.

Swamy's PIL opposes clearance to the deal on the ground that according to government policy, foreign direct investment (FDI) up to 49 per cent is allowed in existing airlines which are already in operation and not to new or proposed joint ventures.

The policy was brought to boost the aviation industry which was undergoing financial crisis, the petition said.

Swamy in his PIL alleged that it is "clearly contrary to the FDI policy" and also against "the guidelines notified by the nodal ministry, the Union Ministry of Civil Aviation, which does not permit foreign investment by a foreign airline, in such a greenfield airline".

He said the FDI policy requires that "effective control" of the joint venture will be vested with Indian nationals.

He also alleged that the joint venture, in which Tata Sons Ltd has 30 per cent stake, Arun Bhatia-led Telestra Tradeplace Pvt Ltd has 21 per cent and AirAsia the majority share holder with 49 per cent stake, is to start the operations in India contrary to the FDI policy.

AirAsia Berhad, a public listed Malaysian company which operates AirAsia through its wholly-owned investment vehicle Air Asia Investment Ltd had in February entered into an agreement with Tata Sons Ltd and Telestra Tradeplace Pvt Ltd to set up a joint venture company for passenger airline business in India.