Supreme Court Rules Out Fundamental Rights Cases Against Air India Post-Tata Takeover, Cites Article 12

The Supreme Court of India delivered a crucial judgment on May 16, regarding the status of Air India Limited (AIL) following its disinvestment and takeover by the Tata Group in January 2022. The court declared that AIL is no longer considered a ‘State’ or an instrument of the State under Article 12 of the Constitution, hence cases alleging violation of fundamental rights against it cannot proceed.

The apex court dismissed appeals against a decision made by the Bombay High Court on September 20, 2022, which had dealt with writ petitions filed by some AIL employees regarding issues such as alleged wage disparities, promotion delays, and late payments of revised salaries and arrears. The Supreme Court upheld that Air India ceased to be a ‘State’ post its privatization, and thus, was not subject to the constitutional mandates governing state entities at the time the petitions were filed.

Article 12 of the Indian Constitution defines the term ‘State’, specifying the entities to which it applies. This article is crucial in determining who can be held accountable for violating the fundamental rights enshrined in Part III of the Constitution. The Supreme Court has extensively interpreted Article 12, broadening its scope beyond government and state institutions. This ensures that governmental actions, along with those of related entities, remain accountable for their actions.

Article 12’s definition of ‘State’ provides citizens a pathway to hold such entities accountable for any infringements of their fundamental rights. Most claims of fundamental rights violations are brought against the State or its instruments, rather than private bodies. The expanded significance of the term ‘State’ under Article 12 is critical in determining which bodies fall under this definition to ascertain accountability.

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The Tata Group took over Air India, a state-run airline then operating at a significant loss, by acquiring a 100% stake for INR 18,000 crore two years ago. This move marked Air India’s return to its original home 68 years after its inception. Founded as Tata Airlines by JRD Tata in 1932, it was renamed Air India Limited in 1946 before being nationalized by the government in 1953.

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