Delhi High Court dismisses BJP MP Subramanian Swamy’s PIL seeking to quash Air India Disinvestment Process

Published by JurisHour on January 10, 2022

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The High Court of Delhi in the case of Dr Subramanian Swamy v. Union of India & Ors. dismissed the PIL filed by the BJP MP Subramanian Swamy seeking to quash the Air India Disinvestment process.

The process of disinvestment of Air India and its subsidiaries commenced in June 2017, with the in-principle approval of the Cabinet Committee on Economic Affairs (CCEA). The first round did not elicit any Expression of Interest. A policy decision to disinvest was taken after following the transparent procedure through multi-layered decision making, involving Inter-Ministerial Group (IMG), Core Group of Secretaries on Disinvestment (CGD) and the empowered Air India Specific Alternative Mechanism (AISAM) at the apex Ministerial level, with support for the entire process from reputed Transaction Adviser, Legal Adviser and Asset Valuer. Advertisements inviting bids mentioned that the Government would cease to be responsible for loss after the date of disinvestment. In the light of excessive debt and other liabilities of Air India, arising out of huge accumulated losses, the bidding construct was revised in October 2020 to allow the prospective bidders an opportunity to resize the balance sheet and increase chances of receiving bids and competition.

The Petitioner, Dr Subramanian Swamy filed a Public Interest Litigation seeking a quashing and revoking order in the nature of writ, order or direction from the court to the present Air India Disinvestment process.

Dr Swamy contended that the Air India Disinvestment process is arbitrary, unconstitutional, unfair, discriminatory and unreasonable and the same cannot be sustained in law. The process is also violative of Article 14 of the Constitution of India as well as against the interest of national integrity and security, primarily for the reason that there is an ongoing investigation against Air Asia (India) Private Limited, wherein one of the shareholders is Air Asia Investment Limited, Malaysia and they exercise direct and indirect control over respondents.

Solicitor General of India, Mr Tushar Mehta appearing on behalf of Respondents submitted that the apprehensions expressed and the allegations levelled by the Petitioner, relating to the disinvestment process of Air India, are absolutely baseless, apart from the fact that there are several factual inaccuracies in the averments made by the Petitioner.

The division bench headed by Chief Justice D. N. Patel, and Justice Jyoti Singh while dismissing the writ petition along with pending application noted that the apprehension of the Petitioner is based upon a news report in one of the newspapers that the Government has sought Parliament’s nod to infuse over Rs. 62,000 crores to its Company that holds Air India’s debt, liabilities and some non-core assets, whereas in October 2021, the Department of Investment and Public Asset Management (DIPAM) Secretary had stated that net liability on Government after Air India’s privatization amounted to Rs.28,844 crores.

Mr Harish Salve, Senior Counsel has clearly brought out the exact import of the said article to the memo of the writ petition. The article is self-explanatory and indicates the balance amounts due, including interest liabilities towards working capital and aircraft loans, lease rentals, owing to the oil companies and to the Airports Authority of India and does not read in the manner sought to be read by the Petitioner. Thus, there is no substance in these allegations.

“So far as the last argument is concerned, i.e. Air India which was a profitable enterprise until 2004 should not have been privatized, the same does not appeal to this Court and is not even germane to the issue in question,” the Court said.