The Court said that the petitions "filed by the State and therefore the case found out by them, consistent with us, maybe a classic example of the proverbial 'sour grapes.’" The Kerala high court has unambiguously rejected challenges to the Central Government's decision to lease out Thiruvananthapuram Airport to Adani Enterprises.
Dismissing the State's challenge to the Centre's decision within the matter, the Bench of Justices K Vinod Chandran and CS Dias remarked in their judgment. The Court was hearing the clutch of petitions filed regarding the Airport lease. The lead petitioner was the State of Kerala, followed by affiliate Kerala State Industrial Development Corporation. Petitions were also filed by various individuals over the difficulty. The high court last year had dismissed the challenges made, but revoked its rejection after the Supreme Court directed it to reconsider its decision and choose the matter on merits.
While many of the disputes were technical in nature, the most thrust of the challenge was that the Centre's Request for Proposal that invited bids for the lease was outside the purview of the Airport Authority of India Act which was against public interest.
What the State of Kerala argued:
Among other grounds, the State argued, the award of the tender to Adani violated the Centre's promise to the State that the State would be permitted to participate in management even if the same was privatised. In this regard, the State invoked the principles of promissory estoppel and bonafide expectation. The tender was tailored to suit Adani Enterprises.
Being an arm of the government, KSIDC stated that its goal was always to serve the general public good.
Other arguments were, the Court was addressed on other arguments, including:
There was undue haste in browsing with the method, which was engineered to return into force before the Model Code of Conduct for last year's General Elections came into force. The procedure was irregular because the overall practice was to possess an invitation for Qualification (RFQ) before seeking proposals from prospective bidders,
A Private-Public Participation Appraisal Committee (PPPAC) was to possess approved the method, which within the present case was expedited by a Union Cabinet-appointed Empowered Group of Secretaries ('EGoS') "breathing down the neck of the PPPAC to expedite the approval". The EGoS had been specifically constituted to beat and overcome cumbersome through transparent processes for PPP projects. There was Public Interest in leasing out the Airport to a personal Player. It was necessary to make sure the Airport Authority could focus its energies and resources on Aeronautical aspects of running an airport;
The Centre didn't make any promises or assurances to the government which could lead to a legitimate expectation of any kind. The Union of India and various respondents iterated in their arguments that the State couldn't approbate or reprobate, after having participated within the tender. The State's arguments about the qualification and terms within the tender couldn't be challenged at this juncture, the Union sought to stress.
The Court's findings:
The Court found that the charge that the tender process was tailored in favour of Adani Enterprises wasn't sustainable for the rationale that there was a "global" tender floated. Because the bidding process itself had not been challenged or the selection of Adani from among the entire bids received, this challenge wouldn't stand, the Court said.
"Considering the magnitude of the project, that too a worldwide tender, we aren't convinced that there was any subterfuge involved in fixing the minimum qualification of monetary capacity at Rs.3,500 crore. It is also to be noticed that, one a State-owned Corporation and therefore the other a Public Ltd., during which State is the main shareholder; KSIDC and CIAL were both qualified to bid as per the RFP. When there have been nine others bidding for the six Airports, there are often no allegation raised of the financial capacity being tailor-made for AEL."
The Court noted that there was a policy in situ that permitted players without prior Airport Management Experience to participate within the tender process for brown-field airports (Airports established and being run for a substantial period). Thiruvananthapuram Airport was one such brown-field airport.
The Court also added that this matter wasn't a piece of writing 131 suit since there was no question arising on the connection between the Union Government and the State in the federal set up, as envisaged in the Constitution of India.
It was further said that there was no doubt arising which involves overlapping of the facility, authority or right of the Central Government with the government. As is discernible from the averments within the writ petitions, the challenge is against privatization which is that the declared policy of the Union Government. In view of those, among other, findings, the writ petitions were dismissed.