Home Legal News [Thiruvananthapuram Airport Lease to Adani Enterprises] Kerala High Court Rejects Challenges to the Central Government’s Decision to Lease Out Thiruvananthapuram Airport to Adani Enterprises

[Thiruvananthapuram Airport Lease to Adani Enterprises] Kerala High Court Rejects Challenges to the Central Government’s Decision to Lease Out Thiruvananthapuram Airport to Adani Enterprises

by Shreya
POCSO Act

Kerala High Court has rejected challenges to the Central Government’s decision to lease out Thiruvananthapuram Airport to Adani Enterprises as the issue was a politically-charged matter with the Kerala Government and most of the State’s Opposition parties up in arms over the award of tender to the Adani Group.

The Court was hearing the clutch of petitions filed in respect of Thiruvananthapuram Airport Lease to Adani Enterprises. The lead petitioner was the State of Kerala, followed by affiliate Kerala State Industrial Development Corporation (KSIDC)Petitions were also filed by various individuals over the issue.

Cotentions by Parties
Arguments by State of Kerela in case of Thiruvananthapuram Airport Lease to Adani Enterprises

Among other grounds, the State argued:

1) The award of the tender to Adani violated the Centre’s promise to the State that the State would be allowed participation in management even if the same was privatised. In this regard, the State invoked the priciples of promissory estoppel and legitimate expectation.

2) The award of the tender to Adani was vitiated by arbitrariness because the Group had no prior experience in developing and managing an airport, as opposed to the Government which had a share in the globally-acclaimed Cochin Internation Airport Limited.

3) The tender was tailormade to suit Adani Enterprises.

Being an arm of the government, KSIDC stated that its goal was always to serve the public good in respect of Thiruvananthapuram Airport Lease to Adani Enterprises. The State had expended a vast proportion of its resources on the airport and had objected to the proposal from the time the Centre proposed privatisation.

Arguments made by various Petitioners

The Court was addressed on other arguments made by various petitioners in case of Thiruvananthapuram Airport Lease to Adani Enterprises, including:

There was undue haste in going through with the process, which was engineered to come into force before the Model Code of Conduct for last year’s General Elections came into force, The procedure was irregular because the general practice was to have a Request for Qualification (RFQ) prior to seeking proposals from prospective bidders, A Private-Public Participation Appraisal Committee (PPPAC) was to have approved the process, which in the present case was expedited by a Union Cabinet-appointed Empowered Group of Secretaries (‘EGoS’) “breathing down the neck of the PPPAC to expedite the approval”. The EGoS had been specifically constituted to overcome “overcome cumbersome though transparent process for PPP projects”, Only two secretaries attended the PPPAC meeting to approve Adani Enterprise’s bid, NITI Aayog and the Department of Economic Affairs had advised against this.

Also Read: [Anil Ambani Bankruptcy Case] SC Dismisses SBI Plea for Resuming Insolvency Proceedings Against Anil Ambani

Arguments by Centre and the Airport Authority of India

Though an RFQ was not present, this was substituted by a “Double envelope clearance” in the RFP itself, Having prior experience in managing airports was deliberately avoided to ensure wider participation; The bidders were drawn from a Harmonised Master List approved and notified by the Government; The EGoS was hierarchically superior to the PPPAC, which was only a Ministerial committee;

There was Public Interest in leasing out the Airport to a Private Player. It was necessary to ensure the Airport Authority could focus its energies and resources on Aeronautical aspects of running an airport; The Centre did not make any promises or assurances to the State Government which could lead it to a legitimate expectation of any kind.

The Union of India and various respondents iterated in their arguments that the State could not approbate or retrobate, after having participated in the tender.

The State’s arguments in Thiruvananthapuram Airport Lease to Adani Enterprises, about the qualification and terms in the tender could not be challenged at this juncture, the Union sought to emphasize.

Court’s Observation in respect of Thiruvananthapuram Airport Lease to Adani Enterprises

The Court noted that there was a policy in place that permitted players without prior Airport Management Experience to participate in the tender process for brown-field airports (Airports established and being run for a substantial period). Thiruvananthapuram Airport was one such brown-field airport.

Pertinently, the Court also found a public interest involved in leasing Airport Management to a private player and accepted the Centre’s submissions in this regard.”The AAI which retains the operation and management of aeronautical services can bring in more expertise and care to such services, ensuring the safety of the passengers.”the Court observed.

The Bench in this case of Thiruvananthapuram Airport Lease to Adani Enterprises refused to interfere with the Cabinet decision to allow privatisation, stating, “We cannot bring in our subjective opinion to interfere with a decision of the executive government.”

The High Court in this case of Thiruvananthapuram Airport Lease to Adani Enterprises also added that the present matter was not an Article 131 suit since there was “no question arising as to the relationship between the Union Government and the State in the federal set up, as envisaged in the Constitution of India.”

It was further said that there was no question arising which involves overlapping of the power, authority or right of the Central Government and that of the State Government.

In conclusion to this case of Thiruvananthapuram Airport Lease to Adani Enterprises, the Kerala High Court stated that there was:”…absolutely no valid ground to cause interference to the proceedings challenged in the batch of writ petitions. As is discernible from the averments in the writ petitions, the challenge is against privatization which is the declared policy of the Union Government…”

The writ petitions challenging Thiruvananthapuram Airport Lease to Adani Enterprises were dismissed.

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