In a major jolt to Dr Subramaniam Swamy who definitely enjoys an impeccable reputation and even the likes of legendary late Ram Jethmalani have always never fought shy to publicly admire his legal prowess as a lawyer, the Delhi High Court in a latest judgment titled Dr Subramanium Swamy vs Union of India & Ors in W.P.(C) 15240/2021 & CM APPL. 47969/2021 (stay) delivered as recently as on January 6, 2021 has clearly held that the bidding process for disinvestment of then national airline, Air India, was not rigged in favour of the Tata Group.

A Division Bench comprising of Chief Justice DN Patel and Justice Jyoti Singh observed that the bidding process saw keen competition with seven Expression of Interests and two bidders, and it cannot be said that the process was tailor made to facilitate the Talace Private Limited, a wholly subsidiary of Tata Sons, which emerged as the highest bidder.

We thus see that the Delhi High Court dismissed the petition that was filed by BJP MP Dr Subramaniam Swamy who sought quashing of the disinvestment process on the ground that the bid process was arbitrary, corrupt, against public interest and rigged in favour of Tata Group. Dr Swamy had alleged that the bidding process was tailor made to facilitate Talace in acquiring Air India by entertaining a bid on behalf of SpiceJet which was a planned and collusive strategy. But his arguments failed to cut ice with the Delhi High Court!

Most significantly and also most remarkably, in its final order, the Delhi High Court very elegantly, effectively and eloquently observed after hearing the learned counsels from all the parties, taking the respective notes of arguments of all the parties and perusing it as envisaged in para 17 that:
Having heard Dr. Subramanian Swamy, Mr. Tushar Mehta, learned Solicitor General appearing for Respondents No.1 to 4 and Mr. Harish Salve, learned Senior Advocate appearing for Respondent No.6, we see no reason to entertain this Public Interest Litigation, for the following facts and reasons:

1. By way of this Public Interest Litigation, Petitioner seeks directions to quash the present Air India disinvestment process, which has reached its final stage. The bidding process is complete, in which Respondent No.6 has emerged as the highest bidder. Respondent No.6/ M/s Talace Private Limited is a wholly owned subsidiary of M/s Tata Sons Private Limited. Cabinet Committee of Economic Affairs has approved the highest price bid of Respondent No.6 on 08.10.2021, for sale of 100% equity shareholding of Government of India in Air India, along with equity shareholding of Air India, Air India Express Limited (AIXL) and Air India Transport Services Limited (AISATS).
    
2. In the present petition, mainly four grounds have been agitated by the Petitioner which are:
   1. There is on-going investigation against AirAsia Ltd., where one of the shareholders is AirAsia Investment Ltd., Malaysia, and they have direct and indirect control over Respondent No.6 and thus Respondent No.6 was disqualified from bidding. The successful bidder/ Respondent No.6, ought to have been disqualified even on account of the allegations made by the Petitioner in W.P.(C) 5909/2013, claiming breach of Foreign Direct Investment Policy.
       
   2. The bidding process was tailor made to facilitate Respondent No.6 in acquiring Air India, by entertaining a bid on behalf of SpiceJet, which was a planned and collusive strategy. There are various pending litigations against SpiceJet Ltd. as also a winding up order by the Madras High Court.
       
   3. The methodology of valuation was arbitrary, corrupt, illegal and against public interest, and (d) Air India which was a profitable enterprise until 2004 and should not have been privatized.
       
3. So far as the first challenge is concerned, it is an admitted case of the Petitioner that Respondent No.6 is a wholly owned subsidiary of M/s Tata Sons Limited. Neither Tata Sons Private Limited nor Respondent No.6 are facing any criminal proceedings in relation to the subject matter of W.P.(C) 5909/2013 or in any other matter. Both Respondent No.6 as well as Tata Sons Limited are Indian entities and therefore, no question arises of violation of Foreign Direct Investment Policy, in any event. Moreover, AirAsia (India) Private Limited has no interest in M/s Talace Private Limited, who is the highest bidder.
    
4. No charge sheet has been filed in any criminal proceedings against AirAsia (India) Private Limited or M/s Talace Private Limited or Tata Sons Limited, as on date, in the matter pertaining to AirAsia and accordingly, no ground for disqualification of Respondent No.6, as per the criteria set out in the PIM, is made out. Similarly, no ground for disqualification of Respondent No.6 on the basis of the allegations made in writ petition being W.P.(C) 5909/2013, is made out. In fact, in our view, the said petition is wholly irrelevant and unconnected to the present controversy.
    
5. So far as second ground, on which this petition has been preferred, that the bidding process was tailor made to facilitate Respondent No.6 acquiring Air India by entertaining a bid on behalf of SpiceJet, is concerned, the same is equally devoid of merit, mainly for the reason that disinvestment process saw keen competition with seven (7) Expression of Interests, received in December, 2020 and two (2) bidders submitted the financial bid in September, 2021. One of the bidders, who submitted the financial bid, was a Consortium in which the lead member was Mr. Ajay Singh but in his individual capacity. SpiceJet Limited was neither a member of the Consortium nor an Affiliate, on whose net worth, any of the members of the Consortium had relied on, to meet the financial capability criteria, prescribed under PIM. The criteria for disqualification, as noted above, has been specifically prescribed in the PIM. The relevant criteria as set out in para 13.2(j) of the PIM has been extracted in the earlier part of the judgement.
   
   As per the said criteria, only where winding up or insolvency proceedings or other proceedings of similar nature are pending against a member of Consortium (i.e. IB) and/or Affiliate (only in case a member of Consortium was taking benefit of financial strength of such Affiliate), would such Consortium be disqualified in terms of PIM. However, in the present case, as brought out by the Respondents, SpiceJet Limited was not a member of the Consortium and thus any proceedings pending against SpiceJet Limited will be of no consequence and would not result in disqualification of the Consortium, having Mr. Ajay Singh, as the lead member. There is no material on record which would support the allegations of the Petitioner that Respondent No.6 colluded with Mr. Ajay Singh's Consortium or was aware of the Consortium's bidding strategy.
    
6. So far as methodology of valuation is concerned, a reserve price was fixed after receipt of sealed financial bids for the transaction, based on valuation using methodologies, as per established process. The policy decision to disinvest was taken after following transparent procedure through multi-layered decision making, involving Inter-Ministerial Group (IMG), Core Group of Secretaries on Disinvestment (CGD) and the empowered Air India Specific Alternative Mechanism (AISAM) at the apex Ministerial level, with support for the entire process from reputed Transaction Adviser, Legal Adviser and Asset Valuer. The advertisements inviting bids mentioned that the Government would cease to be responsible for loss after the date of disinvestment. In the light of the excessive debt and other liabilities of Air India, arising out of huge accumulated losses, the bidding construct was revised in October, 2020, to allow the prospective bidders an opportunity to resize the balance sheet and increase chances of receiving bids and competition. The bids were invited on the basis of revised construct for total consideration for equity and debt, with minimum cash consideration of 15% for equity (Enterprise Value). It was made clear that the sum of certain identified current and non-current liabilities (other than debt) to be retained in Air India and AIXL would be equal to the sum of certain identified current and non-current assets of Air India and AIXL. The balance debt, over the debt quoted in Enterprise Value bid and excess liabilities, over and above the value of identified current and non-current assets for the pre-disinvestment period would be transferred to an identified Government Company.
    
7. The apprehension of the Petitioner is based upon a news report in one of the newspapers that the Government has sought Parliament's nod to infuse over Rs. 62,000 crores to its Company that holds Air India's debt, liabilities and some non-core assets, whereas in October, 2021, Department of Investment and Public Asset Management (DIPAM) Secretary had stated that net liability on Government after Air India's privatization amounted to Rs. 28,844 crores. Mr. Harish Salve, learned Senior Counsel has clearly brought out the exact import of the said article which is annexed as Annexure P-5 to the memo of the writ petition. The article is self-explanatory and indicates the balance amounts due, including interest liabilities towards working capital and aircraft loans, lease rentals, owing to the oil companies and to the Airports Authority of India and does not read in the manner sought to be read by the Petitioner. Thus, there is no substance in these allegations.
    
8. So far as the last argument is concerned, i.e. Air India which was a profitable enterprise until 2004 should not have been privatized, the same does not appeal to this Court and is not even germane to the issue in question. As brought out by the Respondents, way back in June, 2017, in-principle approval was accorded by the Cabinet Committee on Economic Affairs for the process of disinvestment of Air India and its subsidiaries. This was a policy decision by the Central Government, taken after due deliberations, at various levels and is not open to interference in judicial review by this Court, exercising jurisdiction under Article 226 of the Constitution of India, more particularly in the absence of any illegality or arbitrariness being established by the Petitioner, in the decision making process and as rightly contended by Respondent No.6 is a highly belated challenge.
    
9. We also find merit in the stand of the Respondents No. 1 to 4 that each day, approximately Rs. 20 crores are being invested to run the Airline by the Government. The successful bidder needs to invest huge capital to infuse new life into the concerned Airline. We also find merit in the stand of Respondents No.1 to 4 that they have been working towards closing of the disinvestment process, at the earliest and any further delay shall cause loss to the public exchequer, besides creating uncertainty amongst the existing employees, with regard to their future prospects and it needs no gainsaying that public interest shall be adversely affected.

Finally, the Delhi High Court Bench then concludes by mincing no words whatsoever to hold in para 18 that:
The writ petition is wholly devoid of merit and is accordingly dismissed along with the pending application.

No doubt, this latest judgment by the Delhi High Court is certainly a big setback to Dr Subramanium Swamy. But Dr Swamy is also well known for not surrendering very easily. It is definitely quite ostensible that he will definitely challenge it in the Apex Court by knocking its doors! But for the moment, this judgment which has come as a rude jolt to him has to be accepted which Dr Swamy will definitely gracefully accept as we all who either know him or are in the legal arena know it very well till it is overturned by the Apex Court which it would certainly be premature to second guess right now! No denying it!

Sanjeev Sirohi, Advocate,
s/o Col BPS Sirohi, A 82, Defence Enclave,
Sardhana Road, Kankerkhera, Meerut – 250001, Uttar Pradesh.