Will quash Jet-Etihad deal if there are irregularities: SC

Jet Airways had on April 24 announced plans to sell 24 percent equity to Etihad Airways for about Rs 2,058 crore.

PTI| Updated: Dec 06, 2013, 17:17 PM IST

New Delhi: The Supreme Court on Friday made it clear that it would quash the Jet-Etihad Airways deal if there are any irregularities in it.

The apex court also issued notice to Centre and Income Tax Department on a plea seeking direction to the government to place the transcript of tapped telephonic conversation of former corporate lobbyist Niira Radia in which she allegedly had talked about the civil aviation sector.

The court passed the order on BJP leader Subramanian Swamy's plea seeking its direction to quash the deal on the ground that it was against public interest as there has been squandering of natural resource i.e. the sky and air space.

At the outset, Swamy raised objection over Centre's non-filing of its response on his plea.

Solicitor General Mohan Parasaran sought further four weeks' time to file the response and also raised the plea of maintainability by saying that earlier, a similar petition, questioning the Air Asia deal, was not entertained by the apex court and Swamy was rather asked to move the Delhi High Court.

"We have already issued the notice in this case after finding prima facie merits," the bench, headed by Chief Justice P Sathasivam, said.

The bench assured Swamy that his plea will be heard and the deal would be set aside if it is convinced that irregularities were there.

"If we are convinced then we would certainly set it aside," the bench said giving last opportunity to the Centre to file the response and hoped that it would not seek any further adjournment in the case.

Referring to Radia tapes, Swamy, in his application, said the documents are important for the adjudication of the case and the apex court had already ordered the CBI probe in the alleged involvement of middleman in aviation sector which was revealed in conversation.

"One of the issues, namely issue No. 7 deals with the touts and middlemen kickbacks arising from the Bilateral Agreements between India and foreign countries in civil aviation sector," he said, adding "the documents are material to the adjudication of the grounds raised by him in the petition," the plea said.

Swamy, in his plea, also referred that the memo sent by the PMO to Ministry of Civil Aviation on May 22 had raised serious reservations in respect of the growth of the middle eastern carriers including Etihad, the development of middle eastern hubs for servicing traffic from India at the cost and expense of Indian carriers as well as domestic hubs.

"The said Memo by the Prime Minister's Office clearly supports the grounds raised by the petitioner in the present petition," he said.

Swamy also submitted that even the CAG has found that there has been reckless allocation of air space to foreign airlines.

The apex court had on October 8 issued notices to the Centre, the Ministry of Finance, the Ministry of Commerce, the Ministry of External Affairs, Foreign Investment Promotion Board (FIPB), Department of Industrial Policy and Promotion, Directorate General of Civil Aviation (DGCA), Jet Airways and and Etihad Airways.

In the first-ever investment by a foreign airline in an Indian carrier, Jet Airways had on April 24 announced plans to sell 24 percent equity to Etihad Airways for about Rs 2,058 crore, as part of a strategic alliance that would lead to a major expansion in their global network.

Swamy had in his PIL sought "a direction to set aside and revoke any action or decision or grant of any further approvals/permissions/permits, etc. By the respondent (govt) authorities, based upon, relying upon or in furtherance of the impugned bilateral dated April 24".

He challenged "such arbitrary, irrational and mala fide act of grant of largesse in the form of bilateral/MoU dated April 24 and by way of the present petition seeks an investigation under the supervision of this court into the matters of national and public interest".

Swamy also sought a CBI probe against the government officials who had cleared the deal.

He questioned the Centre's decision to execute the agreement in favour of Abu Dhabi under the existing Air Service Agreement between the governments of India and United Arab Emirates.

"The actions of the authorities from the execution of the bilateral to the unprecedented haste in order to assist the realisation of wrongful gains by the facilitator are writ large with acts of collusion and abuse of position," the petition contended.