"Currently No Foreign Investment": Delhi HC in Subramanian Swamy’s plea against 2013 Tata-AirAsia Deal

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Subramanian Swamy had claimed that the FIPB's approval granted to AirAsia violated India's FDI policy and was contrary to the guidelines of the Union Ministry of Civil Aviation.

The Division Bench of Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad of Delhi High Court recently dismissed a case filed by former Member of Parliament Subramanian Swamy contesting the Foreign Investment Promotion Board's (FIPB) clearance granted to Air Asia (India) Private Limited in the year 2013.

The bench while dismissing the PIL stated that “in the current scenario there is no foreign investment and the prayers made have become purely academic.”

The petitioner appeared in person before the bench and stated that he is no longer interested in pursuing the writ petitions and thus the bench disposed of the petition.

The order dated April 03, 2013 of the Ministry of Finance (Department of Economic Affairs) was challenged by Subramanian Swamy, which allowed Air Asia to create a new joint venture firm with 49% foreign shareholding. Tata Sons Ltd were supposed to have 30% of the remaining 51% equity portion, while Telestra Trade Pvt. Ltd. would hold 21%. Air Asia India was announced as a joint venture by Air Asia Investment Ltd (AAIL), Tata Sons, and Telestra Tradeplace Private Ltd.

Through the plea, it was contended that neither of the Indian companies is a domestic airline operator and that FDI is not permitted in "greenfield" companies.

Further, it was also submitted that while issuing the approval, the "substantial ownership and effective control" of the joint venture company could not be determined.

Furthermore, the plea also highlighted that the shareholding of Air Asia (India) Private Limited was altered following regulatory clearances from the Competition Commission of India (CCI) and the Directorate General of Civil Aviation last year, and that the firm became a wholly-owned subsidiary of Air India Ltd.

The court reviewed the status reports produced by the CBI and the Enforcement Directorate (ED) and disposed of the petition.

Cause Title - Dr Subramanian Swamy v Union of India & Ors