Air Asia FIPB clearance: Delhi High Court disposes of Subramanian Swamy PIL in light of Tata takeover of Air India

The Delhi High Court recently disposed of a petition filed by former Member of Parliament Subramanian Swamy challenging the Foreign Investment Promotion Board (FIPB) clearance granted to Air Asia (India) Private Limited [Dr Subramanian Swamy v. Union of India and Ors]..A Division Bench of Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad disposed of the Public Interest Litigation (PIL) noting that the shareholding of the company has been revised, and that Air Asia (India) is now a wholly-owned subsidiary of Air India, which was taken over by Tata Sons.“In view of the fact that there is no foreign investment as of today, the prayers made in the writ petition have become purely academic. The Petitioner, who appears in person, has stated that he is no longer interested in pursuing the writ petition. In view of the statement made by the Petitioner appearing in person, the writ petition stands disposed of,” the order stated.It also ordered re-sealing of the reports in the case provided by the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED)..In his writ petition, Swamy had argued that the FIPB approval granted to AirAsia was in violation of India's foreign direct investment (FDI) policy.Air Asia India was stated to be a joint venture between the Malaysian company, AirAsia Investment Ltd (AAIL), Tata Sons and Telestra Tradeplace Private Limited.Swamy had contended that neither of the Indian companies is a domestic airline operator, and that FDI is not allowed in “greenfield” companies.The Memorandum of Agreement between these companies envisaged the execution of “definitive documents” like shareholders agreements and share purchaseaAgreements subsequent to the grant of FIPB approval.In effect, the “substantial ownership and effective control” of the joint venture company could not be ascertained while granting the approval, Swamy had submitted.He had also raised the issue that Telestra might be the benamidar of AAIL, thereby giving AAIL an effective shareholding way above the sectoral cap of 49%..Subramanian Swamy appeared in person. Central Government Standing Counsel Kirtiman Singh along with Advocates Waize Ali Noor, Kunjala Bhadwaj, Madhav Bajaj and Yash Upadhyay appeared for the Central government. Senior Advocate Rajiv Nayyar and Advocates Jaiveer Shergil, Ruby Singh Ahuja, Varun Khanna, Ishan Gaur, Akshay Aggarwal, Vasu Singh, Mandhira and Aakriti Vohra appeared for Air India. Advocates Anupam S Sharma, Prakarsh Airan, Harpreet Kalsi, Abhishek Batra and Ripudaman Sharma appeared for CBI and ED. Advocates Anjana Gosain, Nippun Sharma and Hetika Vadhera appeared for other respondents..[Read Order]