Home / News / India /  SC rejects Kerala govt's plea against leasing airport to Adani Enterprises

On Monday, the Supreme Court rejected a petition brought by the Kerala government contesting the state high court's judgement to reject the arguments against the Centre's choice to lease 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 ruling, the Supreme Court stated that one of the fundamental points brought up by Kerala's attorney was the conversation between the state and the Center over reservations made 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% equity participation on a range of 10%."

The bench noted while referring to the high court judgement, "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 168 per domestic passenger while that offered by KSIDC was 135 per domestic passenger, which was less by almost 20%."

The state government filed a petition with the supreme court to appeal the Kerala High Court's decision of 19 October, 2020, dismissing the arguments on the grounds that they were opposed to the Center's privatisation programme and hence without substance.

The High Court remarked in its decision that the petitions fundamentally contested the Airport Authority of India's (AAI) leasing out of Thiruvananthapuram International Airport in accordance with the Central Government's objective of fostering 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.

The high court's decision was cited by the apex court in its order as supporting evidence. It stated that these paragraphs capture the essence of the agreement that the KSIDC entered into when it agreed to participate, and that given the circumstances, the high court correctly rejected the state's case.

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.

Employees' concerns

The top court rejected many other petitions, including the one from the Airport Authority Employees Union, in addition to the Kerala government's argument. The union had apprehended that if a private company took control of the airport, it would impact the working conditions for the staff.

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.

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

It had been highlighted that the concessionaire was required to extend job offers to at least 60% of the chosen candidates, with the option for those candidates to accept or reject the offer.

"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.

State government's plea

AAI's "arbitrary and illegal activity" in favouring a certain private concessionaire, Adani Enterprises Ltd., for the operation, administration, and development of Thiruvananthapuram International Airport, was contested by the state government in its filing before the Supreme Court.

Following a competitive bidding procedure in February 2019, Adani Enterprises was awarded the right to manage six airports under the PPP model: Lucknow, Ahmedabad, Jaipur, Mangaluru, Guwahati, and Thiruvananthapuram.

The plea read, "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."

(With inputs from PTI)

This story has been published from a wire agency feed without modifications to the text.

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