AirAsia FIPB Clearance: Delhi HC directs Enforcement Directorate to file status report in sealed cover

Delhi HC asked Delhi Police in case of FIR lodged against Indian associated with Tablighi Jamaat

A division bench of the Delhi High Court comprising of Chief Justice DN Patel and Justice C Hari Shankar passed the order on the petition filled by Subramanian Swamy challenging the Foreign Investment Promotion Board (FIPB) clearance granted by the Centre to AirAsia (India) Pvt. Limited. The Delhi High Court today directed the Enforcement Directorate to file a status report in the ongoing probe into the allegations of money laundering arising out of the allegedly irregular Foreign Investment Promotion Board clearance granted by the Centre to AirAsia (India) Pvt. Limited. As per the Court’s direction the report shall be filed in a sealed cover.

Prior Facts:

Earlier, On July 11, the court had asked the CBI to file a report relating to alleged lobbying by AirAsia India while trying to get international flying rights in violation of foreign investment norms. It had also dismissed a plea by BJP leader Subramanian Swamy seeking interim stay on the airline’s application. In compliance of that July 11 order, CBI filed its status report today in a sealed cover. The ED has alleged that the AirAsia Group CEO lobbied with government servants for clearances, removal of existing 5/20 aviation rule and change in regulatory policies. The Centre has denied that there was any violation of FDI norms while granting approval to the low-cost AirAsia (India) Pvt Ltd. It had said that FDI was permissible in an existing airline as well as a new venture. The Federation of Indian Airlines (FIA), which has also opposed the flying license granted to AirAsia, had earlier alleged that the Directorate General of Civil Aviation (DGCA) was “deliberately turning a blind eye” to the issue.

Key Features:

  • Under the 5/20 rule, a company needs a minimum of five years of flying experience and is also required to have 20 aircraft in its possession in order to become eligible for the licence.
  • Earlier the economic offences watchdog had summoned senior officials of AirAsia including Chief Executive Officer (CEO) Tony Fernandes in connection with the case.
  • Air Asia is a joint venture between the Malaysian company, AirAsia Investment Ltd., Tata Sons Ltd. and Telestra Tradeplace Private Limited.
  • Swamy contends that the same is in violation of the FDI policy, as neither of the Indian companies is a domestic airline operator and FDI is not allowed in “greenfield” companies.
  • Senior Advocate Rajiv Nayar, appearing for the AirAsia submitted that the law had already been set in motion and the plea was not for a court monitored probe.
  • Swamy also stated that the investigation conducted by the CBI was very relevant and crucial for adjudication of this petition since it has raised questions on the decisions and issues which are being probed by the agency.

Judgement:

The Court recorded Enforcement Directorate’s statement that investigation in the case is ongoing. The Court said that at present, certain facts needed to be brought on record and it was not ordering any Investigation. Issuing the notice to the Enforcement Directorate, the Court observed that The Enforcement Directorate is permitted to be impleaded as Respondent for the purpose of filing a status report in a sealed cover and added that issue of continuation of Enforcement Directorate in the petition would be considered after the report is placed on record. The matter will next be taken up on May 14.

Edited by J. Madonna Jephi

Approved & Published – Sakshi Raje

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Vaibhav Goyal is a 3rd year BA.LLB (H) student of UILS, Panjab University, Chandigarh, India. He also basically belongs to the “City Beautiful-Chandigarh”. He had interned and have work experience at various Central and State Government bodies of India including the National Human Rights Commission, New Delhi; the Central Information Commission, New Delhi; U.T. Legal Services Authority, Chandigarh, etc. His research projects includes the study on the Right to Emergency Services (PSHRC), Resettlement of Migrant People (NHRC), Implications of RTI in Financial Institutions (CIC), etc. His publications involve articles in different fields of law like administrative, jurisprudence, etc. on online journals including the Juscholars Blog, Burnished Law Journal, etc. His research paper on Prison Reform was published in the Panjab University Journal and his paper was selected in category of best abstract on the topic of Naxalism: A State of Lawlessness and Arbitrariness. He had scored well in various competitions of law consisting of Quiz, Essay Writing, Lecture, Declamation, etc. He had also participated in various conferences including the World Law Forum Conference on Strategic Lawsuits on Public Participation held in New Delhi on Oct 20, 2018 and the National Law Conclave 2020 held at Vigyan Bhawan, New Delhi on Jan 11, 2020.