The bidding process of Air India was unconstitutional, mala fide, corrupt and rigged in favour of the Tata Sons, Bharatiya Janata Party MP Subramanian Swamy told the Delhi High Court on Tuesday, reported Bar and Bench.
Swamy made the statement in a plea he filed seeking to quash the Air India disinvestment process.
In October, Tata Sons had won the bid to acquire the debt-ridden airline for Rs 18,000 crore.
In his plea, Swamy has also sought an inquiry into the role of respondents in the disinvestment process and that a detailed report is submitted to the High Court.
During Tuesday’ hearing, the BJP leader said that the only other bidder for the airlines was a consortium led by the SpiceJet owner. But, he told the court, that insolvency proceedings are going on against SpiceJet in the Madras High Court and it was therefore not entitled to bid.
“This means there was only one bidder and the bid cannot take place,” Swamy argued. “After the bidding process, a story appeared in press that the second bidder said he was happy that he participated because if he had not, the bidding process could not have gone forward.”
Swamy said he was not opposing the disinvestment policy and that he has always believed in the idea of a free market, reported PTI. The Rajya Sabha MP said he was raising the matter of “impropriety, illegality, misconduct and corruption” in the disinvestment process.
“I am in favour of disinvestment but this is gigantic corruption in my view,” he argued. “I am complaining about the rigged procedure. It is rigged in favour of Tata companies.”
Solicitor General Tushar Mehta said that the disinvestment of the carrier was a policy decision taken by the Union government as Air India was incurring losses.
“The condition [for disinvestment] was [that] whenever we invite the bidding till that day the losses will be incurred by government and after that by the winner of the bid,” Mehta said. “This is not something that has been done surreptitiously.”
On Swamy’s claims that SpiceJet was the second bidder, the solicitor general said that the airline was not a part of the consortium that submitted the bid and proceedings pending against it had no relevance in the case.
“One individual, Ajay Singh [chairperson of SpiceJet], was part of the consortium, which was the second bidder and not SpiceJet,” he said.
Mehta also said that the proceedings against another airline Air Asia had nothing to do with the disinvestment of Air India. Tata group has a joint venture with Malaysia’s AirAsia Berhad under the name of Air Asia India.
“The Respondent 6 is Talace Private Limited which acquired Air India,” he said. “It is wholly owned by Tata Sons and has nothing to do with Air Asia.”
Senior advocate Harish Salve, appearing for Tata, said Air India was completely an Indian company and the allegations of corruption were without any basis.
“From 2017, [the] Government has been facing difficulties to sell the airline,” he said. “There is nothing in this petition. No particulars are given. They can just repeat that there is corruption but no details are given.”
He said the airline business was tough to manage and has large transactions. Salve told the High Court that that if a person comes at this stage and keeps things pending with a writ petition, no one will invest in the airline.
“Already, employees are getting nervous whether they will be paid their salaries or not,” he added. “The government has given assurances. It was trying to sell Air India since 2017 and now it has managed to sell it.”
Following the arguments from both sides, a Bench of Chief Justice DN Patel and Justice Jyoti Singh said that it will pronounce its order on Thursday and directed the parties in the case to file their notes by Wednesday.
Winning the bid, Tata Sons had regained control of Air India nearly 70 years after its nationalisation. Air India was founded in 1932 as Tata Airlines by family scion and aviation enthusiast Jehangir Ratanji Dadabhoy Tata. In 1946, the airline had become a public limited company.
As part of the deal between Tata and the Union government, the salt-to-software conglomerate would pay Rs 2,700 crore in cash and take over Rs 13,500 crore of the airline’s debt.
As of August 31, 2021, Air India had a debt of Rs 61,562 crore.