On Monday, October 17, 2022, the Supreme Court dismissed petitions filed by the State of Kerala and certain employees' unions challenging the decision of the Airport Authority of India(AAI) to lease out the management of Thiruvananthapuram International Airport to Adani Enterprises Limited(AEL).

The Court noted that, according to the High Court decision, based on mutual discussions between the State Government and the Central Government, an entity in which the State Government owns at least 25% of the equity will be granted a Right of First Refusal in the range of 10%. As a result, the Kerala State Industrial Development Corporation (KSIDC), a state-owned corporation, entered the bidding process. However, the KSIDC bid was Rs 168 per passenger, while AEL's bid was Rs 135 per passenger. The KSIDC bid was rejected because it was 20% less than the top bid.

Senior Advocate CU Singh representing the State argued that the state government owned the land on which the airport was built. In addition, the state has spent money to acquire additional airport land. As a result, the state should have preferential rights.

He also claimed that the RFP's conditions were "tailored" to suit the Adani group, as the requirement for prior experience was removed. He emphasised that the state entities have previous experience in managing Cochin International Airport and Kannur International Airport.

Concerning the union's complaint that the private entity's takeover of the airport will have an impact on their service conditions, A bench led by Chief Justice of India UU Lalit and Justice Bela M Trivedi noted that the employees were given the option of switching to airports managed by the Airports Authority of India (AAI) or remaining with the private bidder. The Court, furthermore, in its order, held that "Considering these facts, as well as the fact that the private entity has been in operation since October 2021, we see no reason to interfere. Accordingly, these petitions are dismissed."

However, the bench clarified that it has left open the issue of land ownership raised by the state government. The state claimed ownership of the land, while the AAI claimed ownership of the land. In October 2020, the Kerala High Court dismissed the challenge to the Central Government's decision to lease the Thiruvananthapuram Airport to Adani Enterprises.

Case Details:-

SLP(C) No. 014830 - / 2020

K.P. SURESH

Vs.

Union of India