Kerala HC Dismisses State's Plea Against Leasing Of Thiruvananthapuram International Airport To Adani Group [Read Judgment]

"Classic example of the proverbial 'sour grapes', remarked the Kerala High Court while dismissing the writ petitions filed by the State Government and KSIDC challenging the leasing out of Thiruvananthapuram International Airport to Adani Enterprises Limited.

The bench comprising Justices Vinod Chandran and CS Dias observed that there is absolutely no valid ground in the challenge against privatization which is the declared policy of the Union Government. "Interference to a policy framed by the elected Government it is trite, is difficult, and the feeble challenge raised herein against the policy is devoid of merit.", the bench said.

The State's challenge against the leasing out of the Airport was based on four grounds (1) promissory estoppel and legitimate expectation (2)  arbitrariness in awarding the tender to the Adani Group who has no prior experience in developing and managing an Airport, (3) the financial requirements in the RFP being tailor made to suit the Adani Group and (4) the AAI Act having not permitted any cross-subsidization, by way of utilization of the income generated from one Airport to augment the facilities of another.

"We reject the ground raised by the State, of legitimate expectation as there is no benefit promised to the State Government or enjoyed by it; by way of participation in the management of TIA, which can be deemed to have been taken away by the Central Government by reason of the lease proposed. There can also be no claim of promissory estoppel as we find no promise having been extended by the Central Government or the AAI, at any point of time.", the court said rejecting the first ground.

The court also observed that when there were nine others bidding for the six Airports, there can be no allegation raised of the financial capacity being tailor-made for AEL. The other bidders failed in all the Airports only because AEL quoted the highest bid in each of the six Airports, it added. 

"There are very few operators at the national level having Airport experience and hence the inclusion of the infrastructure sectors in the Harmonised Master List, is the submission. We also find the explanation, quite compelling; that otherwise there would be a monopoly exercised by those players having Airport experience, who would have an edge over others and be placed in a position from which they would dictate terms. We do not find any reason to hold the RFP to be vitiated for reason of the same being tailor-made for AEL, which remains in the realm of an allegation without substantiation.", the bench said while rejecting the 'no prior experience ground. 

Referring to the terms of the agreement, the bench observed that there can be no apprehension raised of retrenchment or loss of emoluments for the existing employees.There cannot be alleged a total absence of public interest and there is nothing to substantiate that there are extraneous reasons; which too are aired only when a particular bidder came out successful in all the six Airports, the court added.

The dispute essentially is between the State and the AAI which cannot be said to be a dispute wherein only the Hon'ble Supreme Court can be moved under Article 131 of the Constitution, the bench observed while rejecting the preliminary objections raised by the Centre to writ petition filed by the state.

Case: State of Kerala vs. Union of India [ W.P(C).No.6823 OF 2019]

Coram: Justices K. Vinod Chandran and CS Dias

Counsel: Sr. Adv Vikas Singh for State, ASG K.M.NATARAJ for Centre

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