Karnataka High Court dismisses challenge to privatisation of Mangaluru International Airport

The Karnataka High Court on Tuesday dismissed a public interest litigation (PIL) petition filed by Airports Authority Employees Union challenging the privatisation of Mangaluru International Airport (Airports Authority Employees Union v. Union of India).

The Division Bench of Acting Chief Justice Satish Chandra Sharma and Justice Sachin Shankar Magadum said that it was a matter of policy decision best left to the executive and Court will not interfere with the same unless there are malafides or such decision is arbitrary.

"In the light of the aforesaid judgment (BALCO), the question of interference in the policy decision of Government of India does not arise....The Hon'ble Supreme Court in the aforesaid case has held that the policy decision of the executive are best left to it and a Court should not interfere with the policy decision unless the decision of the authority is mala fide, arbitrary, irrational or unreasonable," the judgment said.

The Court further said that the airport in question has been leased out after following a transparent process and not a private negotiation.

"In the considered opinion of this Court, the AAI has followed a most transparent process in leasing out the airports. The airport in question has not been leased out by way of private negotiation. The tender was issued and the successful bidder has been awarded the contract and there is no violation of any statutory provision of law in the matter."

The judgment was passed on a plea which sought quashing of a 2019 cabinet decision approving the bid to lease out three airports including the one at Mangaluru to Adani Enterprises.

The matter was reserved for judgment in the first week of September.

The Court in its judgment expressed its unhappiness at the fact the petitioner had suppressed facts regarding the similar challenge raised by it against the policy decision of the Centre before the Kerala High Court.

"Though the present writ petition is maintainable before this Court, in the light of the finding arrived at in paragraph 63(ii) of the order delivered by the Kerala High Court, the fact remains that the petitioner-AAE is a registered Trade Union and the same Trade Union has preferred the writ petition in respect of the policy decision for leasing out the airports. The process was common and in all fairness the petitioner should have disclosed the fact of filing of the writ petition before the Kerala High Court. The petitioner-AAE Union has suppressed the vital information that the policy decision which is the subject matter of this petition was also challenged before the Kerala High Court and therefore, the present petition deserves to be dismissed on account of suppression of facts," the Court said.

While dismissing the petition, the Court said,

"As the petitioner -- AAE Union -- has not been able to point out violation of statutory provisions of law and constitutional provisions, the present petition deserves to be dismissed"

The petition challenged the Centre's decision to privatize six airports, terming the same as "illegal, arbitrary and beyond the scope of the Airport Authority Act, 1994."

Senior Advocate Ashok Haranahalli, appearing for the petitioners, had referred to Section 12 of the Airports Authority of India Act and submitted,

"The premises of the airport can be leased but my submission is that the entire airport is given away to a private person for operations."

Referring to the lease agreement, he had pointed out that there was no revenue sharing with the government and that the entire fixation of the lease was on per passenger fee.

"Runways and taxiways and aircraft rescue fire buildings are also leased out. These are part of air traffic service, they could not have been leased at all...Virtually, the control over aviation services is given to them, it is contrary to AAI Act," Haranahalli had further argued.

Even though it is called a Public-Private Partnership (PPP) project, there is no revenue generated for formulation of PPP partnership, he had pointed out.

"The airport is given to a third party, which is not in consonance with the policy of Public-Private Partnership model. This is not a partnership but just giving away."

Opposing these submissions, Additional Solicitor General MB Nargund, appearing for the Union government, had firstly questioned the petition's maintainability citing similar petition before Kerala High Court which had been rejected.

[Read Judgement]