Delhi HC dismisses Swamy’s plea on Air India divestment

A Bench comprising Chief Justice DN Patel and Justice Jyoti Singh said Swamy’s petition, which also sought a probe into the role and functioning of government authorities involved in the disinvestment process, is “wholly devoid of merit”.

It said around Rs 20 crore is being invested every day to run the airline by the government, and the successful bidder needs to invest huge capital to infuse new life into the carrier.
It said around Rs 20 crore is being invested every day to run the airline by the government, and the successful bidder needs to invest huge capital to infuse new life into the carrier.

The Delhi High Court on Thursday dismissed BJP leader Subramanian Swamy’s petition challenging the disinvestment process of Air India, in which the Tatas emerged as the highest bidder at Rs 18,000 crore.

A Bench comprising Chief Justice DN Patel and Justice Jyoti Singh said Swamy’s petition, which also sought a probe into the role and functioning of government authorities involved in the disinvestment process, is “wholly devoid of merit”.

It said in-principle approval for the disinvestment of Air India and its subsidiaries was accorded by the Cabinet Committee on Economic Affairs in June 2017. “This was a policy decision by the central government, taken after due deliberations, at various levels and is not open to interference in judicial review by this Court … more particularly in the absence of any illegality or arbitrariness” being established by Swamy in the decision-making process, it said.

It said around Rs 20 crore is being invested every day to run the airline by the government, and the successful bidder needs to invest huge capital to infuse new life into the carrier.

The judges said the government and other respondents have been working towards closing the disinvestment process at the earliest and any further delay shall cause loss to the public exchequer, besides creating uncertainty amongst the existing employees on their future prospects. It needs no gainsaying that public interest shall be adversely affected.

Rejecting Swamy’s arguments that the bidding process was tailor-made to facilitate the Tatas acquiring Air India, the HC said the disinvestment process saw keen competition with seven expressions of interest received in December and two bidders having submitted the financial bid in September.

“One of the bidders, who submitted the financial bid, was a consortium in which the lead member was Ajay Singh but in his individual capacity. SpiceJet was neither a member of the consortium nor an ‘affiliate’, on whose net worth, any of the members of the consortium had relied on, to meet the financial capability criteria, prescribed under PIM … Thus any [insolvency] proceedings pending against SpiceJet will be of no consequence and would not result in disqualification of the consortium, having Singh, as the lead member,” the judgement said.

Swamy had sought a direction to the government to quash the Air India disinvestment process, terming it “arbitrary, unconstitutional, unfair” and “rigged in favour of the Tatas”.

Solicitor general Tushar Mehta had opposed the petition saying Talace, a wholly owned subsidiary of Tata Sons which won the Air India bid, had nothing to do with Air Asia. He said any case Air Asia faced in the past was irrelevant in the Air India divestment. Senior advocate Harish Salve, representing the Tatas, had contended that the successful bidder was a 100% Indian company owned 100% by an Indian.

On October 8, 2021, the Cabinet Committee on Economic Affairs had approved the highest price bid of Talace for sale of 100% equity shareholding of the Government of India in Air India along with equity shareholding of Air India in Air India Express and Air India Air Transport Services.

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