AirAsia India in legal wrangle over grant of aviation permits

Close on the heels of startling revelations made by ousted Tata Sons' Chairman Cyrus Mistry in a leaked email, the Federation of Indian Airlines (FIA) moved the Supreme Court on Thursday challenging the grant of aviation permits to Tata Sons and Malaysia-based Air Asia, according to reports.

Federation of Indian Airlines (FIA) is an apex body of private airlines which include Jet Airways, GoAir, IndiGo and SpiceJet.

"Agreement places effective control in the hands of a foreign party," a Livemint report quoted senior advocate Dushyant Dave who argued on behalf of the FIA.

In a blistering letter directed at Tata Board, Cyrus Mistry alleged that members and trustees were aware of ethical concerns raised with respect to certain transactions.

"A recent forensic investigation revealed fraudulent transactions of Rs 22 crore involving non-existent parties in India and Singapore," Mistry wrote in the letter.

In 2013, Malaysia-based AirAsia and Tata Sons entered into a JV to start no-frills carrier in India.

The airline has drawn the ire of BJP MP Subramanian Swamy, who had moved the Delhi High Court early this year seeking "immediate suspension" of flying licence granted to airline AirAsia India alleging that it had obtained the licence through "fraud".

In his letter, Mistry also alleged that he had to execute a similar fait accompli JV with Singapore Airlines. Tata Sons joint venture with Singapore Airlines operates full-service carrier Vistara in the country.

"Passions for the airlines sector had led Tata to continue his involvement with the strategy of the two airlines," Mistry wrote in the letter.