PIL seeks quashing of decision to lease out 3 airports to Adani group; Karnataka HC seeks govt response

The Karnataka High Court has sought the response of the Central government in a public interest litigation (PIL) petition challenging the privatisation of Mangaluru International Airport and seeking quashing of a 2019 Cabinet decision approving the bid to lease out three airports including Mangaluru to Adani Enterprises.

A Bench of Chief Justice Abhay Shreeniwas Oka and SS Magadum also issued notice to the Airports Authority of India (AAI) and Adani Enterprises Limited in a petition moved by Airports Authority Employees Union, as per a report carried by Bar & Bench.

As per the plea, the Union Cabinet, on November 8, 2018, gave in-principle approval for leasing out six airports viz. Ahmedabad, Jaipur, Lucknow, Guwahati, Thiruvananthapuram, and Mangaluru under public-private partnership.

The Cabinet Committee also constituted an Empowered Group of Secretaries, headed by CEO of NITI Ayog to decide on the issue of privatization of airports though the same fell beyond the scope of Public Private Partnership Appraisal Committee (PPPAC), the petition states.

Though, the term ‘leasing out’ was expressed in the said decision, in effect the same was contemplating public -private partnership, it has been submitted.

Based on the said Cabinet note, AAI prepared and submitted the PPPAC Memo, draft request for proposal (RFP-Financial Bid) and draft concession agreement to PPPAC in December, 2018 without conducting proper feasibility study and the legality of such proposal, it says.

The PPPAC, in turn, gave “in principle approval” simultaneously on December 11, 2018, by evaluating the voluminous documents within 4 days.

It is the petitioner's case that prima facie there was no proper examination of the proposal.

AAI then opened the Technical Bid and Financial Bid and M/s Adani Enterprises emerged as the highest bidder for all six Airports.

The Central government in its Cabinet Committee meeting gave approval to the bid of the Adani Group for three airports including the Mangaluru Airport.

It is the petitioner's contention that consequential concession agreement entered into by AAI and Adani Enterprises in February 2020 is not proper as it was finalised without conducting a proper feasibility study and without considering the legality of the proposal.

"The Respondents have no authority to enter into a concession agreement as the same is beyond the powers conferred under Section 12 and 12-A of the Airport Authority Act," the petition reads.

Petitioner has also raised concern over the fact that Adani Enterprises was the highest bidder for all six airports of the 11 bidders, who participated in the bidding process.

"The impugned action of the Respondents is highly arbitrary and illegal. The 2nd Respondent had spent huge amounts from the State Exchequer for the development of the six airports and if these airports are privatized without there being any authority and without ensuring the corresponding participation to the Government, it will cause huge loss to the revenue starved public exchequer. So also, it will amount to handing over land and buildings worth several crores, for throw-away prices to private persons, which will be against the interest of the nation as, such," reads the petition.

On these grounds, the petitioner has sought the following:

1) To call for the entire bidding records pursuant to the cabinet decision in 2018;

2) Declare that the entire bidding process pursuant to the 2018 Cabinet decision and the action of the Respondent in calling for impugned Request for Proposal to enter into a Concession Agreement as illegal and without authority of law in so far as Mangaluru Airport is concerned;

3) Quash the decision of the Centre approving the bid of the Adani group pursuant to Request for Proposal.

The matter will be heard next on March 3.