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Synopsis

A Supreme Court Bench comprising CJI U.U. Lalit and Justice Bela M. Trivedi, while hearing a petition by the Kerala Government, challenging the award of the contract for privatisation of the Thiruvananthapuram Airport to Adani Enterprises Limited, found no reason to interfere in the matter. The Bench considered the fact that the private entity (Adani enterprises) has taken over the management and operations of the Airport since 14-10-2021.

The Court further was of the opinion that the High Court was right in rejecting the claim. However, kept the issues of ownership of land in question open.

Senior Advocate Chander Uday Singh appeared for the State of Kerala, where he submitted that the land on which the Airport has been made, belongs to the State, and also the land to be acquired is State's property. And that the present setup, leaves the State 'high and dry with no stakes'. Further submitted that the Airport in question is not Greenfields Airport and is instead one of the leading airports in the Country which is fully functional. 

He further submitted that the essential condition of the RFP (request for proposal) was changed at the last minute, which was tailor made to benefit the party. To which the Court strongly objected to.

It was also submitted by the Counsel appearing for the union of employees, that the private entity (Adani Enterprises Ltd.) has no experience and expertise in managing and operating an Airport. And that forms a pre-requisite. 

ASG KM Nataraj appeared for the Airport Authority of India. It was submitted by the respondents, that the State Government did not object to the agreement, and was silent for 2 months. And suddenly raised objections, when the private entity has already undertaken the management and operations of the Airport.

The Court took note of the agreement between the Kerala Government and the Central Government, where after all the rounds of discussion, Kerala government had agreed to the condition that it would have a right of first refusal with 25% equity participation. And that in terms of such understanding Kerala State Industrial Development Corporation (KSIDC) participated in the bid, but was unsuccessful. KSIDC had put a bid for 135 per domestic passenger as opposed to the 160 bid of the successful bidder. Therefore, with a difference of 20%. 

Thereafter, the Bench took note of the objections raised by State and a union of employees, where it states that the status of the employees would drastically change. As pensions, retirement schemes, retiral benefits would come under a question mark. And that when the objections were raised, the employees were given an option to either stay with the Airport Authority of India or the private enterprise. 

Case Title: State of Kerala vs Union of India