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High Court dismisses AAI Employees Union's plea against airport privatisation

Karnataka High court has dismissed AAI Employees Union's plea against handing over the contract for operation and management of Mangalore International Airport to Adani, calling it a policy decision taken by the government of India
Karnataka High court dismissed AAI Employees Union's plea on Tuesday against the privatisation of Mangalore International Airport
Karnataka High court dismissed AAI Employees Union's plea on Tuesday against the privatisation of Mangalore International Airport
  • Karnataka High court dismissed AAI Employees Union's plea on Tuesday against the privatisation of Mangalore International Airport
  • High Court said it is a policy decision taken by the government of India
  • Airports Authority of India had handed over the operation, development and management of Mangalore International Airport to Adani in November 2020 for 50 years

Bengaluru: The Karnataka High Court on Tuesday dismissed a petition filed by the Airports Authority Employees Union, challenging the decision of the Central Government and the Airports Authority of India to hand over the contract for operation and management of Mangalore International Airport to Adani Enterprises Limited. The High Court in its order said termed it a policy decision taken by the government of India.

 A division bench of Acting Chief Justice Satish Chandra Sharma and Justice Sachin Shankar Magadum passed the order considering that a similar matter was decided by the Kerala High Court and the decision of leasing the airports being a policy decision taken by the government of India, no interference is required.

The Kerala High Court had last year rejected a challenge made to the handing over of the Trivandrum airport management to Adani Group.

Senior Advocate Ashok Haranahalli appeared for the petitioners. Referring to Section 12 of the Airports Authority of India Act, he argued that "The premises of the airport can be leased but my submission is that the entire airport is given away to a private person for operations." Referring to the lease agreement it was pointed out that, "No revenue sharing with the government is there, entire fixation of the lease is on per passenger fee. Even the revenue derived from leasing of airport space is not shared with the government."

Further, it was submitted that "Runways and taxiways and aircraft rescue fire buildings are also leased out. These are part of air traffic service, they could not have been leased at all." He added, "Virtually, the control over aviation services is given to them, it is contrary to AAI Act." 

It was also claimed that AAI did not conduct any feasibility study for fixing any reserved price in the bidding process for the project. Under the policy of the government of India, all airports have gone to one company and there is no share in revenue with the government for a period of 50 years, the lease period of the airports.

The senior advocate said, "Even though It is called a Public-Private partnership project, there is no revenue generated for the formulation of PPP partnership. The airport is given to a third party, which is not in consonance with the policy of the Public-Private partnership model. This is not a partnership but just giving away."

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Additional Solicitor General MB Nargund appearing for the Union government first raised the question of the maintainability of the petition. He submitted that a branch of the same union had filed a petition before the Hon'ble Kerala High Court, challenging the policy of the government and the same had been rejected. The present petition is thus not maintainable. "The present petition was filed before the Karnataka High Court when the matter was pending for judgement before the Kerala High Court," Nargund argued.

Other respondents in the matter, the Airports Authority of India adopted the arguments made by the Union of India.

The Kerala Government had challenged the handing over of Thiruvananthapuram airport to Adani Group in 2020 overlooking the bid submitted by a state instrumentality. However, Kerala High Court dismissed the challenge and upheld the acceptance of Adani's bid.

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