Airport Employees Union Challenges Lease Of Mangaluru Airport To Adani Group; Karnataka High Court Issues Notice

The Karnataka High Court on Tuesday issued notice on a writ petition which challenges the decision of the Central Government and the Airports Authority of India to hand over the contract for operation and management of Mangaluru International Airport to Adani Enterprises Limited.

The petition filed by Airports Authority Employees Union challenges the Centre's decision to privatize of six airports in the country as "illegal, arbitrary and beyond the scope of the Airport Authority Act, 1994".

A division bench of Chief Justice Abhay Oka and Justice Sachin Shankar Magadum issued the notice returnable on March 4, while hearing a petition filed by Airports Authority Employees Union.

Senior Advocate Ashok Haranahalli, appearing for the petitioner, submitted that status of employees is being changed.

"I request the court for the status quo for employees' conditions of service. Otherwise employees at large scale are being affected and it goes contrary to the Airports Authority Act", he pressed for an interim order today.

The bench said "We agree with you that this needs to be looked into but the prayer is very wide for interim relief, you have to make a proper prayer."

The petition seeks for a declaration that the entire bidding process pursuant to the decision of the Cabinet committee dated 08.11.2018 for privatization of Air-ports as illegal, arbitrary and beyond the scope of the Airport Authority Act, 1994.

It further seeks to quash the Cabinet Decision dated 03.07.2019 accepting the bid of the 6th Respondent (ADANI ENTERPRISES LIMITED) as illegal and beyond the scope of the Airport Authority Act, 1994 and also for quashing the consequential concession agreement dated 14.02.2020 entered into between the 2nd Respondent (AAI) and the 6th Respondent.

The plea states that Union Cabinet held on 08.11.2018 gave "In Principle Approval" for leasing out six Airports viz., Ahmedabad,Jaipur, Lucknow, Guwahati, Thiruvanantapuram, and Mangaluru Airports under PPP-through Public Private Partnership.

Further it is claimed that after obtaining the approval, the 2nd Respondent, within no time finalized and uploaded the Request for Proposal (RFP) and Draft Concession Agreement on 14.12.2018. As per the RFP, the entity which is quoting the Highest "Per Passenger Fee" for Domestic Passengers will emerge as the Highest Bidder. Contrary to the international standards as well as the normal bidding process, there was no base price fixed and thus the bid was beyond the analysis of profit and loss calculations. Totally, 09 Bidders participated in the Bidding process. M/s Adani Enterprises emerged as the highest bidder for all six Airports.

The plea states that "The Airports Authority of India Act does not provide for any type of transfer of property other than a lease. By virtue of the impugned document, the Respondents are trying to overreach and throw away the intent and object of the Act.None of the Respondents are empowered to enter into any type of contract parting with the possession and management of the Airports except a lease to limited extent. The impugned decision and the request for proposal are beyond the scope of the Act and the Respondents have no authority of law to issue such proposals."

It is also said that "Therefore, Section 12 does not contemplate handing over the entire Airport in the name of the lease and assign all its functions to a private entity." It is also said that "The impugned concession granted in favour of the 6th Respondent for a period of 50 years violates Section 21 of the Airports Authority of India Act, which provides a maximum period of 30 years for making any contracts. In this view also, the concession granted is beyond the scope of the Act and liable to be set aside."

The petitions also state that action of the Respondents is highly arbitrary and illegal. The State Government(2nd Respondent) had spent huge amounts from the State Exchequer for the development of the six airports and if these airports are privatized without there being any authority and without ensuring the corresponding participation to the Government, it will cause huge loss to the revenue starved public exchequer. So also, it will amount to handing over land and buildings worth several crores, for throw-away prices to private persons, which will be against the interest of the nation

The Respondent No. 1 and 2 are in a position of a trustee in respect of the public property under their charge and discretion. The Government land is the wealth of the State which the Respondents should deal with, in a bona fide manner and in conformity with law. The Respondents have deviated from the trust reposed in them by the people under the Constitution, contends the petitioners.

Last year, the Kerala Government had challenged the handing over of Thiruvananthapuram airport to Adani Group, overlooking the bid submitted by a state instrumentality. However, the Kerala High Court dismissed the challenge and upheld the acceptance of Adani's bid. The Kerala Government has filed a special leave petition in the Supreme Court against the verdict, which is pending.

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