Subramanian Swamy to Delhi High Court: "Air India Disinvestment procedure prepared in support of Tata"

Subramanian Swamy to Delhi High Court: "Air India Disinvestment procedure prepared in support of Tata"

The Delhi High Court pronounces its decision on the matter on Thursday, 6th January, 2022.

The Delhi High Court is expected to deliver a ruling on BJP leader Subramanian Swamy's petition to quash Tata Sons' winning bid in the Air India disinvestment process on Thursday.

A Bench of Chief Justice DN Patel and Justice Jyoti Singh, said the order will be delivered on Thursday and the parties are also to file their notes by tomorrow.

The Court insisted, "We will issue orders the next day; the notes must be in by tomorrow."

Mr. Swamy had advanced the High Court directing the Central government to halt the disinvestment process of Air India and to cancel any permissions given for that purpose.

Additionally, the plea sought an evaluation of respondents' role in the disinvestment process and the preparation of a detailed report for the court.

Tata Sons had offered the highest price in October 2021 in the purchase of 100 per cent equity shares of Air India and Air India Express, along with half of the stake in its ground-handling company, AISATS.

A share purchase agreement was also signed for the sale of Air India by the government and the Tatas for a total of ₹18000 crores. In addition to pay ₹2,700 crores in cash, Tata is expected to take over ₹13,500 crores of the carrier's debt.

In the last two decades, Air India's disinvestment is the first of its kind in India.

On the occasion of today's hearing, Swamy argued the bidding process was unconstitutional, corrupt and rigged in favour of the Tatas.

Furthermore, he claimed that a consortium headed by the SpiceJet owner was the other bidder. SpiceJet was being insolvently treated by the Madras High Court, hence was ineligible to bid due to orders passed against it.

Consequently, there was only one bidder, and the bidding process could not proceed," Swamy claimed. "After the bidding process, a story appeared in the press discussing how the second bidder was glad he participated because if he had not, there would have been no bidder."

A representative of the Central government, Solicitor General Tushar Mehta, said that disinvesting in the carrier was a decision taken by the government in light of the fact that it was running into losses.

Article 226 of the Constitution does not permit the Court to review issues that are not surreptitious in nature.

"The decision was taken in 2017 and the condition was that the government would incur losses until that day and then the winner of the bid would do so. There is nothing surreptitious about this," he said.

In response to Swamy's argument, Mehta pointed out that SpiceJet was never part of the consortium that participated in the bid.

The second reason is that SpiceJet is facing legal proceedings in the Madras High Court. SpiceJet was never a Consortium member. Instead, the company was owned by its owner, Ajay Singh.

Also, Mehta said that the course of action against Air Asia does not have anything to do with the current disinvestment.

In response to the complaint, the respondent, Respondent 6, said that Talace Private Limited is a company that acquired Air India. It is owned wholly by Tata Sons and is nothing to do with Air Asia. Whatever challenges Air Asia previously had been completely irrelevant here.

In his testimony for Tata, Senior Counsel Harish Salve stressed that the winning bidder was a 100 percent Indian company and that the allegations of corruption were unfounded.

Salve maintained that the government has been struggling to sell the airline since 2017. The petition offers no details. They can just repeat that there is corruption, but no specifics are given," he said.

Swamy says he has nothing against disinvestment or free markets, but he is against the procedure that was adopted, which he claims were unfair and was designed to benefit Tata.

"I am not against disinvestment. I supported free markets in the past. To say I am against disinvestment is absolutely incorrect. I have no problem to face loss. I am on the process which has been prepared in favour of one company," he said.

The Court then progressed to reserve its decision.