Administrative Law Moot Problem-2

Air Jharkhand (AJ) is a statutory public corporation incorporated by Parliament through ‘The
Jharkhand Air Corporation Limited Act, 2002' having 30% fully paid up share capital
acquired by Jharkhand Government and the rest by Central Government.

AJ was developed during the formation of Jharkhand State to boost up state‘s tourism
industry with social restructuring of employees and is presently doing business mainly in the
area of domestic airlines with 15 airbuses as per norms of Director General of Civil Aviation
and Airport Authority of India.

The corporation has a Board of Directors which is the highest authority in the management
and regulation of the Corporation. The Air Jharkhand Rules, 2004 were framed by the
corporation which gives absolute authority to the Chairperson of AJ in terms of managerial
and decision making process.

On 31st September 2018, through a decision made in the board meeting, decided to sell 5 of
its aircrafts. As per the rules of 2004, an expert committee was formed. It was headed by the
chief executive aeronautical engineer whose job was to select which aircrafts were to be sold
and also to find an appropriate buyer.

On 23rd December a notification was published in the local newspaper by the Chairman advertising
the sale of aircrafts. It stated that it would be done by the method of auction and sold to the highest
bidder. 5 aircrafts were sold through this method to a Ranchi based businessman Ram Ratan Lakhani
of White star Airlines on 12th April 2019 at rupees 6 crores. It was rumored that Lakhani group was
very much closely associated with Chairman of AJ.

On 10th August 2019 one of the employees Mr. Ahmad Ali filed a writ of mandamus at the High
Court against the decision of AJ selling of 5 aircrafts. Petitioner also claimed the rules of AJ have
given excessive power to the chairman and on his personal interest chairman has sold aircrafts to one
of his associates. Due to this administrative decision, the corporation has suffered huge loss which has
affected normal Course of business.
But the High Court rejected the petition stating that petitioner has no locus-standi and also that
chairman has done everything according to provision of rules of 2004.

Ali has thus appealed against the decision of the High Court

Issues

1. Whether this appeal is maintainable under Article 132 of the Constitution? Does he have the
required Locus Standi?
2. Is the power given to the Corporation to draft rules excessive delegation of legislative
powers?
3. Is the exercise of the power by the Chairman to affect the sale made excessive in nature?