Defer decision on AirAsia till Dec 11, court tells government

New Delhi – The Delhi High Court Wednesday asked the union government to not to take a decision on the AirAsia deal till Dec 11, the next date of hearing on a plea filed by BJP leader Subramanian Swamy.

Swamy, in his plea, has sought that the government turn down the deal between Singapore Airlines and the Tatas in a greenfield airline project, citing variance with policy.

A division bench of Chief Justice N.V. Ramana and Justice Manmohan said that the decision in the matter would be deferred. Solicitor General Mohan Parasaran assured the bench that no final decision would be taken on the issue.

Parasaran’s assurance came after the court enquired about the government’s stand on Swamy’s plea.

Swamy informed the court that the union government is scheduled to take a decision on the AirAsia deal Dec 11. The court then posted the matter for hearing Dec 11.

Swamy contended that the government has made a relaxation in the Foreign Direct Investment (FDI) policy because of the cash-strapped in aviation sector.

However, the central government objected on the maintainability of the plea, saying a Public Interest Litigation (PIL) cannot be maintained on an issue like AirAsia “as the policy does not affect the general public”.

The BJP leader had moved the high court seeking a restraining order to the government so that it would not approve investment of a foreign airline in a greenfield airline project like AirAsia.

Swamy also challenged the clearance given to the proposed low-cost airline AirAsia India, alleging wrongdoing in the process.

He claimed that, according to the policy, foreign investment was only permitted in an existing airline, but AirAsia India was not an existing carrier.

The government March 26 approved Malaysian low-cost airline AirAsia’s proposal to set up a new airline in India in partnership with the Tata Group and the Arun Bhatia-promoted Telestra Tradeplace.

On Aug 16, the Supreme Court had asked Swamy to move the high court with his plea.

AirAsia India will be based in Chennai, and the Malaysian carrier will hold a 49 percent stake in it.

Swamy opposed the clearance to the deal saying that according to government policy, FDI up to 49 percent is allowed in existing airlines already in operation, and not to new or proposed joint ventures.