Court refuses to suspend Tata-AirAsia airline deal

Last Updated: Tue, Feb 11, 2014 11:50 hrs

New Delhi, Feb 11 (IANS) The Delhi High Court Tuesday refused to suspend the operationalisation of deal between Tata Sons and Malaysia-based AirAsia to create a low-cost airline in India.

Chief Justice N.V. Ramana and Justice Rajiv Sahai Endlaw, refusing to grant interim suspension of operationalisation of the $30 million deal, said: "We are not inclined to grant interim relief. However, we are granting expeditious hearing of the case."

The court has posted the plea of Bharatiya Janata Party leader Subramanian Swamy for March 6.

The government March 26 last year approved AirAsia's proposal to set up a new airline in India in partnership with the Tata Group and the Arun Bhatia-promoted Telestra Tradeplace.

Swamy in his plea said the airline has made an announcement that it is about to start its operation in India and as a third-party interest would be created, suspension of its operationalisation is needed. He said that the deal was against public interest and rule of law.

In his plea, the BJP leader sought a direction restraining the central government from taking any decision or granting any other approval contrary to the applicable foreign direct investment (FDI) policy and civil aviation regulator's guidelines, or granting any approval for foreign investment by a foreign airlines in a greenfield airline project.

Swamy's PIL opposed clearance to the deal on the ground that according to government policy, FDI up to 49 percent is allowed in existing airlines which are already in operation and not to new or proposed joint ventures.

AirAsia India, to be based in Chennai, will see the Malaysian airline holding a 49 percent stake.

More from Sify: