Airport lease to Adani: SC quashes Kerala govt plea challenging HC verdict

The Supreme Court has dismissed a petition filed by the Kerala government regarding Thiruvananthapuram airport being leased out to Adani Enterprises Ltd.

The state high court had rejected the pleas challenging the Centre’s decision to lease out the airport to Adani Enterprises. The Kerala government had filed a petition in the apex court against the HC’s verdict. The Supreme Court on Monday dismissed the petition.

A bench comprising Chief Justice U U Lalit and Justice Bela M Trivedi observed that since Adani Enterprises has been operating at Thiruvananthapuram International Airport since October 2021, it saw no reason to entertain the plea.

KSIDC bid was unsuccessful

In its order, the SC noted that one of the basic issues the Kerala government counsel highlighted was the discussion between the state and the Centre about reservations expressed by the state.

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While referring to the Kerala High Court verdict, 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 HC judgement.

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 that this issue would be kept open. Both the state government and the AAI have claimed ownership of the land.

“Employees have option to shift”

Besides the Kerala government’s plea, the top court also dismissed some other petitions, including the one by the Airports Authority Employees Union. The union had apprehended that the service conditions of the employees would be affected if the private entity took 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.

The HC had also dealt with the concern expressed by the employees’ unions. It had noted that the concessionaire was required to make employment offers to at least 60 per cent of the select employees with the option to either accept 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 HC had noted.

“Pleas against privatisation”

On October 19, 2020, the Kerala High Court dismissed the state government’s pleas on the ground that they were directed against the privatisation policy of the Centre and hence devoid of merit. The HC noted that the petitions essentially challenged the leasing out of Thiruvananthapuram International Airport by the Airports Authority of India (AAI) as part of the Central government policy to bring in public private participation (PPP).

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One of the petitions before the HC 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 state government had said in its plea before the apex court that it 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 airport.

“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 said.

Adani Enterprises 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.

(With agency inputs)