Delhi HC dismisses Subramanian Swamy plea challenging Air India disinvestment

The Delhi High Court on Thursday dismissed BJP leader Subramanian Swamy’s request to have the Air India disinvestment process halted, claiming that the government‘s approach for valuing the national airline was “arbitrary, illegitimate, and against public interest.”

A bench of Chief Justice D N Patel and Justice Jyoti Singh issued the order. A comprehensive order will be uploaded, according to the court. The bench said, “Dr. Subramanian Swamy, sir, we are dismissing this matter…” Swamy has asked the court to set aside and invalidate any action or decision taken by authorities in relation to the Air India disinvestment process, as well as any additional approvals, clearances, or permits granted by authorities.

Swamy, Solicitor General Tushar Mehta, and prominent attorney Harish Salve, who argued in the case on behalf of Talace Private Limited, presented their arguments on January 4, and the court reserved its decision. Swamy also asked for a CBI inquiry into the involvement and operation of authorities, as well as a full report to be submitted to the court.

The Centre’s and Talace Pvt Ltd’s lawyers both objected to the plea. In October of last year, the government accepted the highest bid from a Tata Sons business for 100% equity interests in Air India and Air India Express, as well as the government’s 50% holding in ground-handling company AISATS – the country’s first privatisation in 20 years.

On October 25, the government inked a share purchase deal with Tata Sons to sell Air India for Rs 18,000 crore. The Tatas will pay Rs 2,700 crore in cash and assume the airline’s debt of Rs 13,500 crore. The Tatas outbid a consortium led by SpiceJet promoter Ajay Singh for Rs 15,100 crore, as well as the government’s reserve price of Rs 12,906 crore for the sale of its whole interest in the loss-making airline.

Before handing over the airline to the Tata group, Air India’s total debt was Rs 61,562 crore as of August 31, 2021, of which 75%, or Rs 46,262 crore, will be transferred to a special purpose vehicle, Air India Assets Holding Limited (AIAHL). Swamy had previously claimed that the other bidder was a consortium led by Spice Jet, but that it was not eligible to bid since the airline was facing insolvency proceedings in the Madras High Court, therefore there was essentially only one bidder.

“The government’s process for valuing Air India was arbitrary, illegal, corrupt, mala fide, and against the public interest,” he had added. The petition, according to the solicitor general, is based on three misconceptions and hence does not merit consideration.

SpiceJet was the second bidder, according to the petitioner, but the airline was never a part of the consortium that made the proposal, and any legal procedures against it are irrelevant here. He said that the disinvestment of Air India was a policy decision made by the government in light of the airline’s massive losses, and that the government was qualified to make such a decision.

The solicitor general stated Talace Private Limited, a Tata Sons subsidiary that won the bid to buy Air India, has no criminal actions ongoing against it or the Tata group, and it has nothing to do with the AirAsia group. Salve further claimed that the petition included no merit and that the bidding had been completed, the share agreements had been signed, and that all of this had been in the public domain for some time.

He claimed that the airline industry is difficult to control and that there are a lot of huge transactions. No one will invest in it if someone comes in at this time and keeps things pending with a writ petition, he continued. Swamy stated that he is not opposed to the disinvestment programme and has always believed in the concept of a free market, but that he is concerned about “impropriety, illegality, misconduct, and corruption” in the process.