Kerala High Court junks challenge to Centre's lease of Thiruvananthapuram Airport to Adani, states "feeble challenge is devoid of merit "

The Kerala High Court has unambiguously rejected challenges to the Central Government's decision to lease out Thiruvananthapuram Airport to Adani Enterprises.

The issue was a politically-charged matter with the Kerala Government and most of the State's Opposition parties up in arms over the award of tender to the Adani Group.

Dismissing the State's challenge to the Centre's decision in the matter, the Bench of Justices K Vinod Chandran and CS Dias remarked in their judgment,

The Court added, inter alia, that,

"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 Court was hearing the clutch of petitions filed in respect of the Airport lease. The lead petitioner was the State of Kerala, followed by affiliate Kerala State Industrial Development Corporation (KSIDC). Petitions were also filed by various individuals over the issue.

The High Court last year had dismissed the challenges made, but revoked its rejection after the Supreme Court directed it to reconsider its decision and decide the matter on merits.

While many of the contentions were technical in nature, the main thrust of the challenge was that the Centre's Request for Proposal that invited bids for the lease was outside the purview of the Airport Authority of India Act and that this was against public interest.

Contentions:

What the State of Kerala argued:

Among other grounds, the State argued:

1) The award of the tender to Adani violated the Centre's promise to the State that the State would be allowed participation in management even if the same was privatised. In this regard, the State invoked the priciples of promissory estoppel and legitimate expectation.

2) The award of the tender to Adani was vitiated by arbitrariness because the Group had no prior experience in developing and managing an airport, as opposed to the Government which had a share in the globally-acclaimed Cochin Internation Airport Limited.

3) The tender was tailormade to suit Adani Enterprises.

Being an arm of the government, KSIDC stated that its goal was always to serve the public good. The State had expended a vast proportion of its resources on the airport and had objected to the proposal from the time the Centre proposed privatisation.

Other arguments:

The Court was addressed on other arguments made by various petitioners, including:

• There was undue haste in going through with the process, which was engineered to come into force before the Model Code of Conduct for last year's General Elections came into force,

• The procedure was irregular because the general practice was to have a Request for Qualification (RFQ) prior to seeking proposals from prospective bidders,

• A Private-Public Participation Appraisal Committee (PPPAC) was to have approved the process, which in the present case was expedited by a Union Cabinet-appointed Empowered Group of Secretaries ('EGoS') "breathing down the neck of the PPPAC to expedite the approval". The EGoS had been specifically constituted to overcome "overcome cumbersome though transparent process for PPP projects",

• Only two secretaries attended the PPPAC meeting to approve Adani Enterprise's bid,

• NITI Aayog and the Department of Economic Affairs had advised against this.

What the Centre and the Airport Authority of India argued:

• Though an RFQ was not present, this was substituted by a "Double envelope clearance" in the RFP itself,

• Having prior experience in managing airports was deliberately avoided to ensure wider participation;

• The bidders were drawn from a Harmonised Master List approved and notified by the Government;

• The EGoS was hierarchically superior to the PPPAC, which was only a Ministerial committee;

• There was Public Interest in leasing out the Airport to a Private Player. It was necessary to ensure the Airport Authority could focus its energies and resources on Aeronautical aspects of running an airport;

• The Centre did not make any promises or assurances to the State Government which could lead it to a legitimate expectation of any kind.

The Union of India and various respondents iterated in their arguments that the State could not approbate or retrobate, after having participated in the tender.

The State's arguments about the qualification and terms in the tender could not be challenged at this juncture, the Union sought to emphasize.

The Court's findings

The Court found that the charge that the tender process was tailored in favour of Adani Enterprises was not sustainable for the reason that there was a "global" tender floated.

Because the bidding process itself had not been challenged or the choice of Adani from among the total bids received, this challenge would not stand, the Court said.

The Court noted that there was a policy in place that permitted players without prior Airport Management Experience to participate in the tender process for brown-field airports (Airports established and being run for a substantial period). Thiruvananthapuram Airport was one such brown-field airport.

Pertinently, the Court also found a public interest involved in leasing Airport Management to a private player and accepted the Centre's submissions in this regard.

The Bench refused to interfere with the Cabinet decision to allow privatisation, stating, "We cannot bring in our subjective opinion to interfere with a decision of the executive government."

The High Court Court also added that the present matter was not an Article 131 suit since there was "no question arising as to the relationship between the Union Government and the State in the federal set up, as envisaged in the Constitution of India."

It was further said that there was no question arising which involves overlapping of the power, authority or right of the Central Government and that of the State Government.

In conclusion, the Kerala High Court stated that there was:

In view of these, among other, findings, the writ petitions were dismissed.

Senior Advocates Vikas Singh, Gopal Sankaranayanan, K. Jaju Babu, Senior Government Pleaders P. Narayanan and V. Manu, Advocates Kuriakose Varghese, Mathew A Kuzhalanadan, K.R. Arun, Krishnan Sudeep, Aravind Panicker, Daisy A. Philipose, Jai George, M.U.Vijayalakshmi, Brijesh Mohan, V.N. Gopalakrishnan Nair, A. Chandra Babu, G. Arun, and G. Varun argued for the various petitioners.

Additional Solicitor General of India K.M. Nataraj, CGC P.L. Venukumar, Senior Advocates N.N. Sugunapalan, S. Sreekumar, K. Jayakumar Advocates Roshen D. Alexander, Tina Alex Thomas, V. Santharam, and Lakshmeesh S. Kamath represented the respondents.

Read the judgment here: