Kerala moves SC against leasing out airport to Adanis

The Kerala government has moved Supreme Court on Tuesday seeking a stay on Central Government’s decisions to lease Thiruvananthapuram Airport to Adani Enterprises. The plea calls out the decision of the Airport Authority of India (AAI) to prefer a particular private concessionaire, Adani Enterprises, for the operation, management and development of Thiruvananthapuram International Airport as arbitrary and illegal.

The appeal has been filed by Kerala government challenging the 19 October order of the High Court of Kerala at Ernakulam whereby the court dismissed the Kerala government’s plea by holding that challenge is against privatization of airport and privatization is a policy decision of the Central government and hence is devoid of merit. The High Court had also rejected the ground of legitimate expectation raised by the State on the ground that there can be no claim of promissory estoppel as no promise having been extended by the Centre. (This principle is applicable where one party has, by his words or conduct, made to the other a promise or assurance which was intended to affect the legal relations between them and to be acted on accordingly.)

The State claims that the Centre had assured the State that it would be consulted at the time any decision regarding privatization was taken, taking into account its contribution towards cost for acquisition of land for Airport expansion. The plea highlighted that the State by Government Order dated 29.3.2005 had accorded sanction for transfer of 27 acres of land in favour of AAI free of cost for the construction of new Airport. The petitioner has acted on the assurance given that in the event, if a Special Purpose Vehicle is set up for the Thiruvananthapuram Airport, then the value of land would need to be reflected as Government of Kerala’s share capital.

It is submitted that the High Court proceeded on the wrong premise that as per Section 13(2) of Airport Authority Act, 1994 the lands acquired by the State Government for the purpose of the Airport vests in AAI and the State cannot stake any ownership over the said property since the acquisition and transfer of the properties were made voluntarily without any conditions and without pursuing claims for equity participation.

The plea also claims that the entire tender process is vitiated as it was in violation of the provisions of the AAI, 1994 (Act). Further the attempt on the part of the AAI 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 in violation of the provisions of the Act, as well as the proprietary rights of the State Government as regards the land wherein the Thiruvananthapuram Airport is situated.