Air India ceased be State or its instrumentality under Article 12 post disinvestment: SC

Supreme Court rules Air India ceased to be a State entity after disinvestment, no fundamental rights violation case allowed

Air India Limited (AIL) ceased to be State or its instrumentality under Article 12 of the Constitution after its disinvestment and take over by the Tata Group in January 2022, and no case of alleged violation of fundamental right would lie against it, the Supreme Court ruled on May 16.

The apex court dismissed the appeals filed against a September 20, 2022 verdict of the Bombay High Court which had disposed of four writ petitions instituted by some employees of AIL over alleged stagnation in pay and non-promotion of employees and delay in payment of wage revision arrears, among others.

The top court noted that the petitions before the high court had claimed violation of Articles 14 (equality before law), 16 (equality of opportunity in matters of public employment), and 21 (protection of life and personal liberty) of the Constitution.

A bench of Justices B. R. Gavai and Sandeep Mehta noted that the high court had disposed of the pleas on the ground of non-maintainability of the writ petitions owing to the privatisation of AIL.

It said there was no dispute that the Government of India, having transferred its 100% share to Talace India Pvt. Ltd., ceased to have any administrative control or deep pervasive control over the private entity and hence, "the company after its disinvestment could not have been treated to be a State anymore after having been taken over by the private company". "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.