THE Delhi High Court's division bench of the Chief Justice D.N. Patel and Justice Jyoti Singh, on Thursday, dismissed the petition filed by the Bharatiya Janata Party leader, Subramanian Swamy, challenging the Air India disinvestment process. Among the grounds relied on by the bench is the oft-repeated reasoning that a policy decision, in the absence of any illegality or arbitrariness established by the petitioner in the decision-making, cannot be interfered with by the judiciary..The in-principle approval accorded by the Union Cabinet Committee on Economic Affairs for the process of disinvestment of Air India and its subsidiaries in 2017 was a policy decision by the Union Government, taken after due deliberations at various levels, and is not open to interference in judicial review by this court, exercising jurisdiction under Article 226 of the Constitution, the bench held in its judgment, authored by the Chief Justice..In his petition, Swamy had contended that the process of Air India disinvestment is arbitrary, unconstitutional, unfair, discriminatory and unreasonable. It is violative of Article 14 as well as against the interest of national integrity and security, primarily for the reason that there is an ongoing investigation against AirAsia (India) Pvt Ltd, wherein one of the shareholders is Air Asia Investment Limited, Malaysia and they exercise direct and indirect control over Respondent No.6, Swamy had alleged. Respondent No.6 in the case is M/s Tallace Pvt. Ltd., the highest bidder and a wholly-owned subsidiary of M/s Tata Sons Pvt. Ltd..Swamy also alleged that the consortium led by Ajay Singh, the principal shareholder, Chairman and Managing Director of SpiceJet Limited, has pending litigation against him, filed by a decree-holder under the Civil Procedure Code's Order 39, Rules 1 and 2 , seeking an injunction to restrain SpiceJet from transferring/alienating any of its assets to SpiceXpress and Logistics Pvt. Ltd. and seeking recovery of the amounts under a foreign decree. The High Court of Madras vide its order dated December 6, 2021 has issued winding-up orders against SpiceJet. Ajay Singh, the lead member of the consortium, was one of the two bidders,and therefore, is disqualified under Clause 13.2 of the Preliminary Information Memorandum (PIM) issued by the Ministry of Civil Aviation on January 27, 2020, Swamy claimed..Since there were only two financial bids, out of which one bidder was the consortium led by Ajay Singh, the bidding process was a mere sham only to fulfill the technical requirement of there being more than one bidder. The whole process was collusive and tailor-made to facilitate Respondent No. 6 acquiring Air India, Swamy alleged..Swamy argued that Air India was a profitable enterprise until 2004 and should not have been privatized. Swamy claimed that he was not against privatization, but he is aggrieved by the methodology of valuation, which according to him, was arbitrary, corrupt, illegal and against the public interest, as allegedly evident from the statement in one of the news articles, that Government was seeking Rs. 62,000 crores for debt and other liabilities of Air India, whereas at an earlier press conference in October 2021, Department of Investment and Public Asset Management had stated that the net liability on the Government after Air India's privatization amounted to Rs. 28,000 crores approximately..In his response, the Solicitor General, Tushar Mehta, submitted that neither AirAsia (India) Pvt. Ltd. nor Air Asia Investment Ltd., Malaysia has direct or indirect control over Respondent No. 6. AirAsia (India) Pvt. Ltd. has no interest in Respondent No. 6, he claimed. There is no charge-sheet filed by any government agency against AirAsia (India) Pvt. Ltd. or Respondent No. 6 or Tata Sons Pvt. Ltd. and thus, no ground for disqualification is made out against Respondent No. 6 as per the criteria set out in the PIM, he told the bench..The decision to disinvest Air India Limited, while retaining part of the pre-disinvestment debt and liability with the Government, is essentially a matter of policy, and in the absence of any illegality or arbitrariness being pointed out in the decision-making process, a policy decision is not amenable to judicial review, he submitted to the bench, which accepted it..The SG submitted that the government has been working towards the closing of disinvestment at the earliest, as the government is paying Rs. 20 crores a day to run the airline. Apart from providing job protection to the employees, the new owner will infuse huge capital to refurbish the aircrafts and possibly purchase new aircrafts for the obsolete ones, so that the airline can be revived. Any further delay, it was submitted, in closure of disinvestment, shall cause loss to public exchequer, create uncertainty amongst the employees, and will be against the public interest, he told the bench. The bench saw merit in these contentions..Counsel for Respondent No. 6, senior advocate Harish Salve, contended that a policy decision for disinvestment of Air India and its subsidiaries was taken in June 2017, with the in-principle approval of the Union Cabinet Committee on Economic Affairs. This petition, he averred, is a challenge to a policy decision taken almost five years ago and is highly belated. The successful bidder was Respondent No. 6, who is not facing any criminal proceedings, in relation to the subject matter of W.P(C) No.5909/2013, as sought to be alleged by the petitioner. Respondent No. 6 is admittedly a wholly-owned subsidiary of Tata Sons Pvt. Ltd., who is also not facing any criminal proceedings. Both the companies are Indian entities and hence, no question of Foreign Direct Investment policy violations could arise, Salve told the bench..There is not even an iota of evidence or material in the writ petition, which would even remotely suggest that Respondent No. 6 colluded with Ajay Singh's consortium or was aware of the consortium's bidding strategy, as alleged by Swamy, Salve claimed..Swamy merely relied upon a news report wherein it was stated that the Government has sought Parliament's nod to infuse over Rs. 62,000 crores to its company that holds Air India's debts, liabilities and some non-core assets, to contend that the methodology of valuation was illegal. None of his assertions, based on the news report, establish any arbitrariness, much less illegality or corruption, Salve told the bench. Further, Salve argued that where Parliamentary sanction is sought for infusion of such a large amount into an airline, it is obvious that the wisdom of the decision, apart from its different dimensions, would be discussed in the Parliament, and therefore, not amenable to judicial review..In addition, the bench found merit in the following contentions of the respondents:.The Disinvestment process saw keen competition with seven Expression of Interests, received in December 2020 and two bidders submitted the financial bid in September 2021. One of the bidders who submitted the financial bid was a Consortium in which the lead member was Ajay Singh, in his individual capacity. SpiceJet Ltd. 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.There is no material on record which would support the allegations of the petitioner that Respondent No. 6 colluded with Ajay Singh's consortium or was aware of the consortium's bidding strategy.There has been no illegality or arbitrariness established by the petitioner in the decision-making process, and, as rightly contended by Respondent No.6, the petition is a highly belated challenge..Click here to read the order.
