Air India Disinvestment Saw Keen Competition, Not Rigged In Favour Of Tata Group: Delhi High Court In Subramaniam Swamy's Plea

The Delhi High Court has held that the bidding process for disinvestment of then national airline, Air India, was not rigged in favour of the Tata Group.A Division Bench of Chief Justice DN Patel and Justice Jyoti Singh observed that the bidding process saw keen competition with seven Expression of Interests and two bidders, and it cannot be said that the process was tailor made to facilitate the Talace Private Limited, a wholly owned subsidiary of Tata Sons, which emerged as the highest bidder.Holding thus, it dismissed the petition filed by BJP MP Subramanian Swamy, seeking quashing of the disinvestment process, on the ground that the bid process was arbitrary, corrupt, against public interest and rigged in favour of Tata group.The order stated,"...ground, on which this petition has been preferred, that the bidding process was tailor made to facilitate Respondent No.6 (Talace) acquiring Air India by entertaining a bid on behalf of SpiceJet, is concerned, the same is equally devoid of merit, mainly for the reason that disinvestment process saw keen competition..."Swamy had alleged that the bidding process was tailor made to facilitate Talace in acquiring Air India, by entertaining a bid on behalf of SpiceJet, which was a planned and collusive strategy.The Court noted that SpiceJet was not the second bidder. Rather, the financial bid was submitted by a Consortium in which the lead member was Ajay Singh, owner of SpiceJet. However, he participated in his individual capacity."SpiceJet Limited was neither a member of the Consortium nor an "Affiliate", on whose net worth, any of the members of the Consortium had relied on, to meet the financial capability criteria, prescribed under PIM," it emphasized.It added,"There is no material on record which would support the allegations of the Petitioner that Respondent No.6 colluded with Mr. Ajay Singh's Consortium or was aware of the Consortium's bidding strategy."So far as methodology of valuation is concerned, the Bench noted that a reserve price was fixed after receipt of sealed financial bids for the transaction, based on valuation using methodologies, as per established process.It finally held that Air India disinvestment was a policy decision made by the Central Government after due deliberations at various levels and it is not open to interference in judicial review, in exercise of jurisdiction under Article 226 of the Constitution, "more particularly in the absence of any illegality or arbitrariness being established by the Petitioner, in the decision making process and as rightly contended by Respondent No.6 is a highly belated challenge."Case Title: Dr. Subramanian Swamy v. Union of India & Ors.Citation: 2022 LiveLaw (Del) 7Click Here To Read/ Download Judgment

Air India Disinvestment Saw Keen Competition, Not Rigged In Favour Of Tata Group: Delhi High Court In Subramaniam Swamy's Plea

Akshita Saxena

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