HC reserves order on stay of Tata-AirAsia operationalisation

Swamy's PIL opposes clearance to the deal stating that FDI up to 49 % is allowed in existing airlines, not to JVs

The Delhi High Court today reserves its interim order on a plea of BJP leader Subramanian Swamy seeking a stay on the operationalisation of $ 30 million deal between Tata Sons and Malaysia-based AirAsia.

 

"We will pass the order," a bench comprising Chief Justice N V Ramana and Justice Rajiv Sahai Endlaw said after hearing arguments of Swamy and Solicitor General (SG) Mohan Parasaran, who appeared for the Centre.

 

"Now the announcement has been made by the Airlines that it is about to start its operation in India. A stay is needed as a third party interest would be created. The deal was against public interest and rule of law," Swamy said.

 

The plea was opposed by SG Parasaran and senior advocate Abhishek Manu Singhvi, who appeared for Tata-AirAsia.

 

Earlier the bench had suggested Swamy to approach the concerned ministries with his grievances relating to the deal.

 

The BJP leader, in his plea, has sought a direction restraining the Centre from taking any decision or granting any other approval contrary to the applicable FDI policy and DGCA guidelines or granting any approval for foreign investment by a foreign airlines in a greenfield airline project.

 

Swamy had first moved the apex court which had asked him to withdraw the petition and approach the High Court.

 

In April last year, the Foreign Investment Promotion Board (FIPB) gave clearance to the $ 30 million deal.

 

Swamy's PIL opposes clearance to the deal on the ground that according to government policy, foreign direct investment (FDI) up to 49 % is allowed in existing airlines which are already in operation and not to new or proposed joint ventures.

 

Swamy in his PIL has alleged that the deal is "clearly contrary to the FDI policy" and also against "the guidelines notified by the nodal ministry, the Union Ministry of Civil Aviation, which does not permit foreign investment by a foreign airline, in such a greenfield airline".

 

AirAsia Berhad, a public listed Malaysian company which operates AirAsia through its wholly-owned investment vehicle Air Asia Investment Ltd, had in February entered into an agreement with Tata Sons Ltd and Telestra Tradeplace Pvt Ltd to set up a joint venture company for passenger airline business in India.