HC seeks Centre's reply on Swamy's plea against nod to AirAsia

FIPB gave clearance to the $30-mn deal between AirAsia and Tata Sons in April

The Delhi High Court today directed the Centre to respond to a plea filed by BJP leader Subramanian Swamy seeking quashing of permission given to AirAsia for its operations in India.

The court, however, declined to stay the permission given by the government for the deal and said it was only issuing notices as of now.

The bench of Chief Justice N V Ramana and Justice Pradeep Nandrajog issued notices to the Centre, Foreign Investment Promotion Board (FIPB) and Commerce and Civil Aviation ministries and sought their responses by October 30.

It asked the government to "file an affidavit explaining the government's policy on the issue".

In April, the FIPB gave clearance to the $30 million deal between Malaysia-based AirAsia and Tata Sons.

The petition opposes the clearance to the deal on the ground that as per the policy cleared by the Cabinet, foreign direct investment (FDI) up to 49 per cent is allowed in existing airlines which are already in operations and not to new or proposed joint ventures.

The policy was brought to boost the aviation industry which was undergoing financial crisis, the petition said.

Swamy in his PIL alleged that it is "clearly contrary to the Foreign Direct Investment 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".

Appearing for AirAsia, senior advocate Abhishek Manu Singhvi argued that the petition was "motivated" and "the object of PIL is to create a cloud over the deal so that the project does not go forward".

Singhvi said the company's application for flying licence is still pending and hence the petition was "premature".