The Delhi High Court today stayed till February 6 the decision of the Centre to reject the security clearance of an air charter service for transporting Rs 3.5 crore in demonetised notes in passenger baggage.
"Is demonetisation affecting all the government policies? Where does it give you the power to cancel the licence? The money did not belong to them," Justice Sanjeev Sachdeva said after counsel for the Directorate General of Civil Aviation (DGCA) submitted that the action against the charter airline was taken for carrying demonetised notes in such a "huge volume".
The court put on hold the government's December 8, 2016 decision to reject the security clearance of Air Car Airlines Pvt Ltd, the petitioner, as well as any consequential action under a show cause notice of December 13 till the next date of hearing, saying the cash was released and no action was taken against the passenger in whose luggage the money was found.
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"They were not carrying arms. They were only carrying cash. Cash does not become a bomb," the court said and issued notice to the Ministry of Civil Aviation (MoCA) and DGCA and sought their reply before February 6 next year, which is the next date of hearing.
It said the government was not able to show any rule or regulation which made it mandatory for the petitioner airline to point out to the authorities that any cash was being carried.
The court further said that the circulars of Bureau of Civil Aviation Security (BCAS) on which the government has relied to support its decision only deal with safety and security of the passengers and aircraft and do not oblige airlines to inform the authorities that cash was being carried onboard.
Air Car Airlines Pvt Ltd, which provides air charter services, has said in its plea that its aircraft was booked for a Delhi-Hissar-Dimapur-Delhi flight and the passengers travelling from Hissar to Dimapur were carrying Rs 3.5 crore in demonetised currency.
The airline has said that the currency was checked by the
pilot in command regarding "source and use" of the money, as well as the documentary proof and added that the notes were seized at Dimapur airport, but subsequently released to the lawful owner.
The government contended that the action was taken against the airline as it was an "apparent case of money laundering", to which the court asked, "How does money laundering allow you to cancel licence or security clearance of the airline?"
"You cannot punish someone beyond what the law permits," the court said.
The company has contended that the action was initiated against it for "making it a scapegoat".
It has claimed that the rejection of its security clearance has caused it a monetary loss of Rs 90 lakh on account of aircraft lease charges, aircraft parking, employee salaries, maintenance and severe loss of reputation.
It also said that its appeal against the December 8 decision of BCAS was pending before the MoCA.
