The bench, consisting of Justices B.R. Gavai and Sandeep Mehta, acknowledged that the Government of India, having transferred its entire 100% share to Talace India Pvt Ltd, no longer had any administrative or pervasive control over the privately owned entity.
NEW DELHI: Today (May 16th): The Supreme Court declared that Air India Limited (AIL) can no longer be considered a state entity under Article 12 of the Constitution following its disinvestment and subsequent takeover by the Tata Group in January 2022.
The apex court dismissed appeals against a September 20, 2022, verdict of the Bombay High Court, which addressed concerns raised by some AIL employees regarding pay stagnation, non-promotion, and wage revision arrears.
The bench, consisting of Justices B.R. Gavai and Sandeep Mehta, acknowledged that the Government of India, having transferred its entire 100% share to Talace India Pvt. Ltd., no longer had any administrative or pervasive control over the privately owned entity. Consequently, the court concluded that AIL, after disinvestment, could no longer be deemed a state entity or its instrumentality under Article 12 of the Constitution.
The Supreme Court emphasized that the privatization of AIL rendered the writ petitions non-maintainable, as the Government no longer maintained administrative or pervasive control over the airline.
The petitions filed before the high court alleged violations of Articles 14, 16, and 21 of the Constitution, pertaining to equality before the law, equality of opportunity in public employment, and protection of life and personal liberty, respectively. However, the Supreme Court noted that the high court had dismissed the pleas on the grounds of non-maintainability due to AIL’s privatization.
The Supreme Court further explained
once AIL fell outside the scope of the definition of the state under Article 12, it could not be subject to the court’s writ jurisdiction as per Article 226 of the Constitution. The court emphasized that AIL, now owned by the private company Talace India Pvt. Ltd., primarily operates for commercial purposes and no longer performs a public duty. Therefore, no writ petition can be maintained against AIL.
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“Thus, unquestionably, the respondent no. 3 (AIL) after its disinvestment ceased to be a state or its instrumentality within the meaning of Article 12 of the Constitution of India,” it said. The bench said once AIL ceased to be covered by the definition of state within the meaning of Article 12 of the Constitution, it could not have been subjected to the court’s writ jurisdiction under Article 226 of the Constitution.
“The respondent no. 3 (AIL), the erstwhile government-run airline having been taken over by the private company Talace India Pvt Ltd, unquestionably, is not performing any public duty inasmuch as it has taken over the government company Air India Limited for the purpose of commercial operations, plain and simple, and thus no writ petition is maintainable against respondent no. 3 (AIL),” it said.
The Supreme Court acknowledged that, at the time of filing the writ petitions before the High court, AIL was a Government entity. However, due to the significant delay in the disposal of the pleas, the company had already been disinvested and acquired by a private player. Given this transformation into a private entity without any public function, the high court could not have exercised extraordinary writ jurisdiction to issue a writ against it.
“The division bench (of the high court) has taken care to protect the rights of the appellants to seek remedy and thus, it cannot be said that the appellants have been non-suited in the case. It is only that the appellants would have to approach another forum for seeking their remedy,” the bench said in its verdict.
Regarding the delay in disposing of the writ petitions, the bench clarified that it could not justify the continuation of the petitions, especially considering that the private respondent had changed ownership during that time. Thus, the high court could not issue a writ to the new owner.
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“We do not find any reason to take a different view from the one taken by the division bench of the Bombay High Court in sustaining the preliminary objection qua maintainability of the writ petitions preferred by the appellants and rejecting the same as being not maintainable,” the top court said, while dismissing the appeals.
The bench clarified that the appellants still have the right to seek a remedy but would need to approach an appropriate forum to address their grievances, as the High court’s jurisdiction was no longer applicable to the privatized AIL. The Supreme Court upheld the high court’s decision to deny equitable relief to the appellants and direct them to pursue alternative avenues for resolution.
