SC dismisses Kerala Govt plea against decision to lease Thiruvananthapuram airport to Adani Enterprises

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The Supreme Court on Monday dismissed a petition filed by the Kerala government against the state high court verdict rejecting the pleas challenging the Centre's decision to lease out Thiruvananthapuram International Airport to Adani Enterprises Ltd.

A bench comprising Chief Justice U U Lalit and Justice Bela M Trivedi observed as the private entity has been operating there since October 2021, it sees no reason to entertain the plea.

In its order, the top court noted that one of the basic issues highlighted by the counsel appearing for Kerala was about the discussion between the state and the Centre with regard to reservations expressed on behalf of the state government.

While referring to the Kerala High Court verdict, which was challenged before it by the state and others, the apex court noted that after the discussions, "the Government of Kerala agreed to the condition that it would have right of first refusal in favour of any entity in which Government of Kerala has 25 per cent equity participation on a range of 10 per cent."

"In terms of such understanding, the state owned corporation KSIDC (Kerala State Industrial Development Corporation) was nominated which participated in the bid but unsuccessfully. The bid offered by the successful party (the Adani group company) was Rs 168 per domestic passenger while that offered by KSIDC was Rs 135 per domestic passenger, which was less by almost 20 per cent," the bench noted while referring to the high court judgement.

The state government had moved the apex court challenging the October 19, 2020 verdict of the Kerala High Court which had dismissed the pleas on the ground that they were directed against the privatisation policy of the Centre and hence devoid of merit.

Besides the plea filed by Kerala government, the top court also dismissed some other petitions, including the one by the Airport Authority Employees Union. The union had apprehended that the service conditions of the employees will be affected if the private entity takes over the airport.

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The court said the employees had the option of shifting to other airports run by the AAI.

"Considering these facts as well as the factor that the private entity has been in operation since October 2021, we see no reason to entertain these petitions¿.

These petitions are accordingly dismissed," the bench said.

In its verdict, the high court had noted that the petitions filed before it essentially challenged the leasing out of Thiruvananthapuram International Airport, as carried out by Airport Authority of India (AAI), in pursuance of the policy of the Central government to bring in public private participation (PPP).

One of the petitions before the high court had sought to declare the Request For Proposal (RFP) issued by the AAI as ultra vires the provisions of the Airports Authority of India Act, 1994.

In its order, the apex court referred to some paragraphs of the high court verdict and said these paragraphs bring out the essence of the understanding with which the participation was undertaken by the KSIDC and in the circumstances, as rightly projected on behalf of the AAI, the case set up by the state was rightly rejected by the high court.

The state's counsel told the bench that the aspect regarding the land may be kept open.

"One of the issues projected by the State is with respect to ownership of the land in question," the bench observed, adding this issue is kept open. Both the state government and the AAI have claimed ownership of the land.

The high court had also dealt with the concern expressed by the employees' unions about the employees of the AAI.

It had noted that there is a requirement that the concessionaire make employment offers to a minimum of 60 per cent of the select employees with option given to such employees to either accept the offer or decline it.

"In such circumstances there can be no apprehension raised of retrenchment or loss of emoluments for the existing employees. There could definitely be a transfer made, which would only be an incidence of service, even otherwise applicable," the high court had noted.

The state government had said in its plea before the apex court that it has challenged the "arbitrary and illegal action" of the AAI in attempting to prefer a particular private concessionaire, Adani Enterprises Ltd, for the operation, management and development of Thiruvananthapuram International Airport.

Adani Enterprises had won the rights to run six airports -- Lucknow, Ahmedabad, Jaipur, Mangaluru, Guwahati and Thiruvananthapuram -- through the PPP model after a competitive bidding process in February, 2019.

"The contention of Kerala...is that the attempt on the part of the Airport Authority to grant right of Operation, Management and Development of Thiruvananthapuram Airport, to a private party...who has no previous experience in managing airports, is not in public interest and is violative of the provisions of the Airport Authority of India Act, 1994," the plea had said.

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