Supreme Court To Hear Kerala Govt Plea Against Thiruvananthapuram Airport Lease To Adani Group On March 16

The Supreme Court on Monday posted to March 16 a batch of petitions challenging the decision of the Airport Authority of India(AAI) to lease out the management of Thiruvananthapuram International Airport to Adani Enterprises Limited.

The Kerala Government and few other individuals have filed Special Leave Petitions against the judgment of the Kerala High Court which upheld the lease of the Airport to AEL in October 2020.

On Monday, a 3-judge bench comprising Chief Justice SA Bobde, Justices AS Bopanna and V Ramasubramanian said that the petitions will be listed after two weeks. Then,one of the lawyers requested the bench for a specific date, saying that the cases will go into a "limbo" otherwise.

Following that, the bench agreed to give a dated posting, and accordingly, the petitions have been listed on March 16.

On October 19, 2020, a division bench comprising Justices K Vinod Chandran and CS Dias of the High Court had dismissed the petitions challenging the AAI tender to Adani group, observing that Court cannot interfere with a policy decision of the executive regarding privatization of airports.

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(Request For Proposal) 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 High Court said rejecting the first ground.

The HC 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.

The SLP filed by the state government contends that the grant of concession to Adani is in violation of an earlier undertaking by the Ministry of Civil Aviation which had rejected the proposal of state government to form a Special Purpose Vehicle (SPV) to take over and run the Airport on a revenue-sharing basis.

Kerala Government states that the Government of India had given an assurance to the State of Kerala that when a decision is taken to induct private sector into the management of Thiruvananthapuram Airport, Government of India would consult the State Government taking into account the contribution made by the State towards acquisition of land to the airport, also shows that the expectations of the State Government is based on the statement made by the Government of India which has the duty of making the decision.

"It is submitted that crystallisation of such the legitimate expectation cannot be varied on an unfair and illegal act on the part of the Government of India," plea states.

Last week, the Karnataka High Court had issued notice on a petition filed by Airport Employees Union challenging the decision to hand over Managalore airport to Adani group.

Click here to read/download the order of Feb 15