Case BriefsTribunals/Commissions/Regulatory Bodies

Competition Commission of India (CCI): Coram of Ashok Kumar Gupta (Chairperson) and Sangeeta Verma and Bhagwant Singh Bishnoi, Members found no cartelization in respect to the skyrocketing prices by the airlines during the Jat Agitation.

Informant had alleged that Jet Airways, Spice Jet and Indigo had contravened the provisions of Section 3 of the Competition Act.

Informant’s Submissions

During the month of February 2016 when Jat Agitation was going on, domestic airlines had skyrocketed their rates particularly between the Delhi-Chandigarh and Delhi-Amritsar routes.

From the above instance, it was noted that the aviation industry had been exploiting the passengers during such conditions as the same was observed during the Chennai Floods and Nepal Earthquake.

Preliminary Conference

Commission on noting the allegations and submission by the Informant held a preliminary conference and made a reference to the Director-General of Civil Aviation in terms of Section 21 A of the Act, later the Commission sought certain information from 5 airlines.

What did the Commission note?

Commission noted that with the use of algorithms, there exists a high possibility of collusion with or without the need of human intervention or coordination between competitors.

Therefore, Commission opined that there was a need for investigation of the algorithms used by airlines, so as to determine whether the fares set by the airlines during the alleged period were an outcome of collusion or not?

 Hence, on 9-11-2018 an order was passed to cause an investigation to be made.

 DG in its investigation report concluded that no contravention of Section 3(3) read with Section 3(1) of the Act was found against the conduct of Spice Jet, Air India, Go Air and Indigo during the period of ‘Jat’ Agitation, but in regard to Jet Airways, DG excluded the same from its purview of investigation since the airline was grounded in April 2019 and due to grounding of Jet Airways and un-availability of any employee/personnel, the Resolution Professional could not provide any price data, booking dates, capacity of flight, number of passengers flown and the number of price buckets used by Jet Airways during the period of ‘Jat’ Agitation.

After the objections and suggestions were filed, parties were directed to appear for a final hearing on the investigation report on 23-02-2021.

On the fixed date of hearing, Commission noted that neither the informant nor its counsel appeared before the Commission.

Further, Commission considered the matter in its ordinary meeting and decided to pass an appropriate order.

What did the investigation try to ascertain?

It was ascertained whether the increase in air-ticket prices during the period of Jat Agitation was the result of an agreement between the OPs?

Whether the price data suggested any uniformity in prices indicative of price parallelism?

DG found no contravention of Section 3(3) read with Section 3(1) of the Act against the conduct of Spice Jet, Air India, Go Air and Indigo during the period of Jat Agitation.

Analysis and Decision

Commission noted that the existence of an ‘agreement’ is sine qua non before ascertaining whether the same is anti-competitive or not in terms of the scheme of Section 3 of the Act.

Definition of ‘agreement’ as given in Section 2(b) of the Act requires inter alia any arrangement or understanding or action in concert whether or not formal or in writing or intended to be enforceable by legal proceedings.

The establishment of ‘agreement’ would require some explicit or tacit arrangement amongst the parties wherefrom a concert between them can be deciphered. This may include, amongst others, exchange of information in the form of communications/ e-mails or in any other form of communication amongst the competitors, whether – explicit or tacit, oral or in writing, formal or informal including through parallel conduct which cannot be otherwise explained etc.

 In the instant matter, no such emails were found which could show any exchange of information among the airlines establishing any form of collusion during or after the period of Jat Agitation.

The investigation did not reveal any price parallelism or identical pricing of tickets by the airlines.

Further, elaborating more, Commission noted that widespread usage of algorithms in price determination by individual firms could pose possible anti-competitive effects by making it easier for firms to achieve and sustain collusion without any formal agreement or human interaction.

Based on DG’s investigation, Commission noted that airlines were using different software’s for the pricing of tickets in different fare bucket.

No evidence on record was found to establish a cartel amongst the airlines during the period of Jat Agitation.

Hence, no case of contravention of the provisions of Section 3(1) of the Competition Act was made out against the airlines. [Shikha Roy v. Jet Airways (India) Ltd., 2021 SCC OnLine CCI 31, decided on 3-06-2021]

Advocates before the Court:

For SpiceJet Limited: Mr. Abhishek Sharma, Advocate along with Mr. Shashi Shekhar, Executive (Legal) of OP-2

For InterGlobe Aviation Limited: Mr. Raj Shekhar Rao, Senior Advocate with Mr. Sagardeep Rathi, Mr. Pranjal Prateek and Mr. Ebaad Nawaaj Khan, Advocates

For Go Airlines (India) Limited: Mr. Vihang Virkar and Mr. Karun Jhangiani, Advocates along with Mr. Prashant Shinde, Senior General Manager (Legal) of OP-4

For Air India Limited: Mr. Pratik Majumdar, DGM of OP-5

Case BriefsCOVID 19Supreme Court

Supreme Court: Considering the hardship of the passengers who are stranded on foreign soil at the airports after they were issued valid tickets for travel, the 3-judge bench of SA Bobde, CJ and AS Bopanna and Hrishikesh Roy, JJ has directed that Air India be allowed to operate the non-scheduled flights with the middle seats booking upto 6th June, 2020. However,

“after that the Air India will operate non-scheduled flights in accordance with the interim order to be passed by the Bombay High Court thereafter.”

The hearing was conducted through video conferencing on Eid holiday, considering the urgent nature of the matter.

The said order of the Court came after Solicitor General Tushar Mehta submitted before the Court that the stranded passengers are under a lot of anxiety and difficulties arising from want of proper shelter, money, etc., at the foreign airports. Also, in some cases, the travel plan of families who were travelling together has been disrupted because those in the families who had middle seats have to be off loaded and remain behind.

The Court, hence, remanded the matter to the Bombay High Court and asked it to pass an effective interim order after hearing all concerned on the date fixed i.e. 2nd June, 2020 by it or soon thereafter. It also asked the High Court to arrive at a prima facie finding regarding the safety and health of the passengers qua the COVID-19 virus, whether the flight is scheduled flight or a non-scheduled flight.

The Court, however, made it clear that the Director General of Civil Aviation is free to alter any norms he may consider necessary during the pendency of the matter in the interest of public health and safety of the passengers rather than of commercial considerations.

[Union of India v. Deven Yogesh Kanani, SPECIAL LEAVE PETITION (CIVIL) Diary No(s).11629/2020, order dated 25.05.2020]

Cabinet DecisionsLegislation Updates

To permit foreign investment upto 100% by those NRIs, who are Indian Nationals, in case of M/s Air India Ltd., the Union Cabinet approved to amend the extant FDI Policy to permit Foreign Investment (s) in M/s Air India Ltd by NRIs, who are Indian Nationals, upto to 100% under automatic route.

As per the present FDI Policy, 100% FDI is permitted in scheduled Air Transport Service/Domestic Scheduled Passenger Airline (Automatic upto 49% and Government route beyond 49%).  However, for NRIs 100% FDI is permitted under automatic route in Scheduled Air Transport Service/Domestic Scheduled Passenger Airline. Further, FDI is subject to the condition that Substantial Ownership & Effective Control (SOEC) shall be vested in Indian Nationals as per aircraft rules, 1937.  However, for M/s Air India Ltd., as per the present policy, foreign investment(s) in M/s Air India Ltd. Including that of foreign Airline(s) shall not exceed 49%, either directly or indirectly, subject to the condition that substantial ownership and effective control of M/s Air India Ltd. shall continue to be vested in Indian Nationals.  Therefore, although 100% FDI is permitted under automatic route for NRIs in Scheduled Air Transport Service/Domestic Scheduled Passenger Airline, it is restricted to be only 49% in the case of M/s Air India.


In light of the proposed strategic disinvestment of 100% of M/s Air India Ltd. by the Government of India, M/s Air India Ltd. will have no residual Government ownership and will be completely privately owned, it has been decided that foreign investment in M/s Air India Ltd be brought on a level playing field with other scheduled airline operators.  The amendment in FDI policy will permit foreign investment in M/s Air India Ltd at par with other Scheduled Airline Operators i.e. upto 100% in M/s Air India Ltd by those NRIs, who are Indian Nationals.  The proposed changes in FDI Policy will enable foreign investment by NRIs into M/s Air India Ltd. upto 100%, under automatic route.

          Above amendment to the FDI Policy are meant to liberalise and simplify the FDI policy to provide ease of doing business in the country.  Leading to largest FDI inflows and thereby contributing to growth of investment, income and employment.


FDI is a major driver of economic growth and a source of non-debt finance for the economic development of the country. The FDI policy is reviewed on an ongoing basis, with a view to attract larger volumes of foreign investment inflows into the country. Government has put in place an investor friendly policy on FDI, under which FDI up to 100% is permitted on the automatic route in most sectors/activities.

FDI policy provisions have been progressively liberalized across various sectors in the recent past to make India an attractive investment destination. Some of the sectors include Defence, Construction Development, Trading, Pharmaceuticals, Power Exchanges, Insurance, Pension, Other Financial Services, Asset Reconstruction Companies, Broadcasting, Single Brand Retail Trading, Coal Mining, Digital Media etc.

These reforms have contributed to India attracting record FDI inflows in the recent past.  FDI inflows in India stood at US $ 45.15 billion in 2014-15 and have consistently increased since then.  FDI inflows increased to US $ 55.56 billion in 2015-16, US $ 60.22 billion in 2016-17, US $ 60.97 billion in 2017-18 and the country registered its highest ever FDI inflow of US $ 62.00 billion (provisional figure) during the last Financial Year 2018-19. Total FDI inflows in the last 191/2 years (April 2000- September 2019) are US $ 642 billion while the total FDI inflows received in the last 51/2 years (April 2014- September 2019) are US $ 319 billion which amounts to nearly 50 % of total FDI inflow in last 191/2 years.

Global FDI inflows have been facing headwinds for the last few years. As per UNCTAD’s World Investment Report 2019, Global Foreign Direct Investment (FDI) flows slid by 13% in 2018 to US $1.3 trillion in the previous year, that is the third consecutive annual decline. Despite the dim global picture, India continues to remain a preferred and attractive destination for Global FDI flows. However, it is felt that the country has the potential to attract far more Foreign Investment which can be achieved, inter-alia, by further liberalizing and simplifying the FDI policy regime.


[Source: PIB]

[Press Release dt. 04-03-2020]

Hot Off The PressNews

Hardeep S. Puri, Minister of State (I/C), Ministry of Civil Aviation informed that the newly constituted Air India Specific Alternative Mechanism (AISAM), headed by Hon’ble Home Minister and comprising of Union Ministers of Commerce & Industry, Finance & Corporate Affairs and Civil Aviation, as members, has approved the release of the Preliminary Information Memorandum (PIM) for inviting Expression of Interest (EOI) from the Interested Bidders (IBs) for Strategic Disinvestment of Air India.  He informed that the Government has released the PIM for seeking EOI for strategic disinvestment of Air India.

Addressing the Media, Shri Puri informed that Air India along with Air India Express has 146 aircraft in its fleet, 82 of which are owned by it; have worldwide bilateral rights and spread over domestic as well as international slots and added that during 2018-19, both Air India and Air India Express carried around 26.2 million passengers. Air India and Air India Express have an average aircraft age of 8 years which is among the youngest fleet. 27 Boeing-787 with Air India are as young as 5 years and 27 Airbus-320 Neo (CFM engines) are as young as 2 years. Air India and Air India Express have almost 51% share of the international traffic to/from India among Indian carriers and 18 % share including global carriers (ex-India).

Pointing out that Air India has coverage of 98 destinations with 56 domestic and 42 international destinations, Shri Puri informed that Air India offers 75 additional destinations through its secondary network of code share operations.  Air India and Air India Express have combined revenue of Rs. 30,632 crore in 2018-19, which is the highest among Indian carriers.  Air India + Air India Express employee cost as % of revenue is about 11% which is comparable to Indian carriers and much lower to International carriers.  AISATS provides in-house ground handling facilities at key metro airports – Delhi, Bengaluru, Hyderabad, Thiruvananthapuram and Mangalore.  Even after infusion of about Rs. 30,500 crore as per Turn Around Plan since 2012, Air India has been running into losses year after year.  Due to its accumulated debt of about Rs.60,000 crore, its financial position is in a very fragile condition.

A few of the key decisive parameters in the current PIM include:

  • Transfer of management control and sale of 100% shares of Air India along with Air India’s 100% stake in its subsidiary, Air India Express Limited and 50% stake in a joint venture, AISATS.
  • Freezing of Debt in Air India at Rs.23,286.5 crore which is approximately equivalent to the Written Down Value (WDV) of combined assets of Air India and Air India Express.
  • The liabilities to be retained in Air India will be equal to certain current and non-current assets. Considering the combined figures as on March 31, 2019, the liabilities retained would be Rs 8771.5 crore.
  • The remaining debt and liabilities of Air India and Air India Express will be allocated to SPV (Air India Assets Holding Limited).
  • The contingent liabilities related to statutory dues and Government dues will be indemnified by Government.
  • The contingent liabilities due to retired employees will be clarified at the RFP stage.
  • Corporate guarantees given by Air India on behalf of Alliance Air will not be passed to new investor.
  • Land and buildings at Delhi, Mumbai airports and Corporate Office which are core assets for running the airline will be given to new investor on right to use basis for a limited period.
  • Government has committed to pay certain employees’ related dues before the closing of transaction.
  • The bidding structure on forming the Consortium has been eased as compared to last round of bidding.
  • The financial capability of prospective investors has also been made more attractive such as lowering of Net Worth criteria to Rs. 3,500 crore, and Net Worth qualification of investor based on strength of its Affiliate.
  • Individual member must have at least 10% share in the consortium i.e. a net worth or ACI of Rs.350 crore. The scheduled Indian commercial operator(s), however, with zero or a negative net worth are eligible to be a member of the consortium provided they have a shareholding of <=51%.
  • Air India with new investors will continue using the ‘Air India’ brand.

Employees related issues

  1. The total employee strength of the two companies is 17,984, out of which 9617 are permanent employees. Approx 36% of the permanent employee will be retiring in the next 5 years.
  2. AISATS has 11958 contractual employees and 399 employees are deployed from Air India and other subsidiaries.
  3. Employees’ dues of about Rs. 1383.70 crore on account of Justice Dharmadhikari Commission’s recommendation on past arrears will be paid by the Air India Assets Holding Limited (AIAHL) – the SPV before the closing of the proposed transaction.
  4. Provision for Rs. 207.63 crore towards wage arrears accruable to employees working on Narrow Body fleet has been made in the books of account of Air India. The treatment of this liability may be provided at the RFP stage.
  5. 3% of equity shares of Air India to be offered to the permanent employees of Air India as ESOP.

[Source: PIB]

Ministry of Civil Aviation

[Press Release dt. 27-01-2020]

Case BriefsHigh Courts

Kerala High Court: Deciding the question regarding the compliance of principles of natural justice in the context of inquiry conducted by the Internal Complaints Committee (ICC) constituted under the Sexual Harassment of Women at Work Place (Prevention, Prohibition and Redressal) Act, 2013 the Court held that when prejudicial statements are made, the same shall not be used against any person without giving him an opportunity to correct and contradict.

The issue involved a complaint against the appellant to ICC of Air India, Southern Region of misconduct based on sexual harassment by 17 women employees of Air India-SATS. Based on the complaint, the ICC conducted an enquiry and submitted its report. The appellant was aggrieved on the ground of non-compliance with the principles of natural justice as the inquiry concluded without giving him an opportunity to cross-examine the complainant and to controvert the factual finding in the inquiy report, hence vitiating the same. The stand of the Airport Authority was that the report was a priliminary report to find the apellant’s involvement and when a prima facie case was made out, further disciplinary proceedings would be initiated as per the rules and regulations of Air India.

Setting aside the impugned report, the Bench of Muhamed Mustaque, J. held that every Internal Complaints Committee constituted under the Act necessarily has to follow the principles of natural justice in conducting their enquiry. The Rules framed under the Act also indicate that the Committee shall follow the principles of natural justice [See Rule 7(4)].  The Court observed that the inquiry conducted by ICC as to the fact finding is final unless it is varied in appeal. It cannot be varied by the employer in a follow-up action to be taken in terms of Section 13.

The Court held that “The fundamental principles relating to the principles of natural justice is that when prejudicial statements are made, the same shall not be used against any person without giving him an opportunity to correct and contradict.

The Court noted that verbal cross-examination is not the sole criteria to controvert/contradict any statement of the aggrieved before any authority. Primarily in a sexual harassment complaint, the Committee has to verify and analyse the capability of the aggrieved to depose before them fearlessly without any intimidation. Fair opportunity has to be understood in the context of an atmosphere of free expression of grievance. If the Committee is of the view that the witness or complainant can freely depose without any fear, certainly the delinquent can be permitted to have verbal cross-examination of such witnesses. In cases, where the Committee is of the view that the complainant is not in a position to express freely,  it can adopt such other method permitting the delinquent to contradict and correct either by providing statement to the delinquent and soliciting his objections to such statement. The Court observed that a fair opportunity should be given to the delinquent in such manner as the committee thinks fit to consider. The ICC was directed to reconsider the matter after giving fullest opportunity to the petitioner. [L.S. Sibu v. Air India Limited, Writ Petition (C) No. 4001 of 2016 (A), decided on April 8, 2016]