M/S Delhi International Airport P.Ltd vs Union Of India & Ors

M/s. Delhi International Airport Pvt. Ltd. ...Appellant

Versus

Union of India & Others ...Respondents

WITH

CIVIL APPEAL NO. 7873 OF 2011

[Arising out of SLP(C)No. 377 of 2010)

M/s. Delhi International Airport Limited versus Indira Gandhi Airport

TDI Karamchari Union & Ors.

WITH

CIVIL APPEAL NO. 7874 OF 2011

[Arising out of SLP(C)No. 1713 of 2010)

Airport Authority of India versus Indira Gandhi Airport TDI Karamchari

Union & Ors.

WITH

CIVIL APPEAL NO. 7875 OF 2011

[Arising out of SLP(C)No. 1814 of 2010)

Airport Authority of India versus Union of India & Ors.

WITH

CIVIL APPEAL NO. 7876 OF 2011

[Arising out of SLP(C)No. 10647 of 2010)

Indira Gandhi Airport TDI Karamchari Union versus Union of India &

Ors.

WITH

CIVIL APPEAL NOS. 7878-7879 OF 2011

[Arising out of SLP(C)Nos. 9757-9758 of 2010)

Airport Authority of India versus Union of India & Ors.

J U D G M E N T

Dalveer Bhandari, J.

1. Leave granted in all the Special Leave Petitions.

2. These appeals emanate from the judgment of the High

Court of Delhi delivered in LPA No.38 of 2007, LPA No.1065 of

2007, Writ Petition (C) No.139 of 2008 and Writ Petition (C)

No.6763 of 2008 on December 18, 2009.

3. The short question which arises for consideration in

these appeals is whether the Notification dated 26th July,

2004 issued by the Central Government under Section 10 (1)

of the Contract Labour (Regulation and Abolition) Act, 1970

(for short, `CLRAA') prohibiting employment of contract labour

of trolley retrievals in the establishment of the Airport

Authority of India (for short, `AAI') at the Indira Gandhi

International Airport and Domestic Airport at Delhi would be

applicable to the Delhi International Airport Private Limited

(for short, `DIAL') or not?

4. This judgment would decide these appeals preferred

before this Court against the following Letters Patent Appeals

and Writ Petitions decided by the High Court:

a) In dira Gandhi International Airport TDI Karamchari

U nion v . Union of India and others - LPA No.38 of

2007

This Letters Patent Appeal was filed against the judgment

of the learned Single Judge dated 28th November, 2006 in Writ

2

Petition (C) No.15156 of 2006. The workers' Union had

preferred the writ petition for seeking implementation of the

Notification of prohibition dated 26th July, 2004 and for

absorption in service amongst other things. The learned

Single Judge took notice of the fact that from 4th April, 2006 a

new private entity, DIAL had taken over the Airports (Domestic

and International). Hence at the airport, there was no longer

any establishment of AAI existing but a new establishment of

DIAL was operating due to which the notification dated 26th

July, 2004, prohibiting the engagement of contract labour in

trolley retrieval activity in the establishment of AAI at the

Delhi Airports could not automatically apply to the new entity,

DIAL and a new notification by the appropriate government

would have to be issued.

b) U nion of India v . Indira Gandhi International Airport

TDI Karamchari Union - LPA No.1065 of 2007

This Letters Patent Appeal was preferred by the Union of

India against the learned Single Judge's judgment dated 28th

November, 2006 passed in Writ Petition (C) No.15156 of 2008

on a very limited point of certain observation in the judgment.

3 c) Ai rports Authority of India v. Union of India Writ

Petition (C) No.6763 of 2008

AAI after getting permission of the High Powered

Committee to go ahead with the litigation challenged the

notification dated 26th July, 2004 by filing the said writ

petition.

d) De lhi International Airports P.Ltd. v. Union of India

Writ Petition (C) No.139 of 2008

DIAL had preferred this writ petition challenging the

order of the Chief Labour Commissioner, Government of India

dated 24th September, 2007 by which the Central Government

was held to be the `appropriate government' for DIAL for the

purposes of Industrial Disputes Act, 1947 (hereinafter referred

to as "ID Act") and CLRAA. The order dated 22nd November,

2007 of Chief Secretary, Government of NCT of Delhi by which

all documents concerning DIAL were directed to be shifted to

the Central Government machinery was also impugned.

5. Both the writ petitions of AAI and DIAL were heard and

disposed of by the Division Bench of the High Court along with

these LPAs by the impugned judgment.

4 BRIEF FACTS:

6. 136 workers were employed by the contractor M/s. TDI

International Pvt. Ltd. to do the work of trolley retrieving at the

Domestic and at the International Airport at Delhi in the year

1992. In view of the perennial nature of the work, the

workmen approached the Contract Labour Court for abolition

of contract labour system and for their absorption as regular

employees. AAI came into force merging the International

Airport Authority Act, 1971 and the National Airport Authority

Act, 1985. On 26th July, 2004 the Central Government

accepted the recommendations of the Contract Labour Court

and issued notification dated 26th July, 2004 abolishing the

contract labour system.

7. This notification was challenged by AAI before the High

Court of Delhi. Taking note of the ONGC judgment reported in

Oil and Natural Gas Commission and Another Vs.

Collector of Central Excise 1992 Suppl. (2) SCC 432 the

High Court vide judgment dated 3rd February, 2005 held that

the present proceedings cannot be proceeded with till the

matter is resolved by the High Powered Committee (HPC).

5 Accordingly, the matter went to the HPC and the notification

was not given effect to.

8. Meanwhile, 136 workers who were engaged as Trolley

retrievers by the contractor M/s. TDI International Private

Limited working at the airport since 1992 were removed from

service on 5th December, 2003 as the contract of M/s. TDI

International Private Limited had come to an end and a new

contractor Sindhu Holdings came in its place. These 136

members filed Writ Petition No.15156 of 2006 before the

learned Single Judge of the High Court of Delhi praying for

their absorption in service as regular employees and for

implementation of the notification dated 26th July, 2004.

9. The learned Single Judge of the High Court after hearing

the parties including DIAL vide judgment dated 28th November,

2006 held that the establishment of AAI is no longer in

existence and has changed. As such, the notification dated

26th July, 2004 cannot be applied to the new entity DIAL. The

appropriate government shall have to issue a fresh

notification. Consequently, the Writ Petition filed by the said

136 workers stood dismissed by the learned Single Judge of

the High Court.

6 10. Indira Gandhi International Airport TDI Karamchari

Union preferred LPA No.38 of 2007 against the judgment of

the learned Single Judge. The Union of India also preferred

LPA No.1065 of 2007 against the judgment of the learned

Single Judge.

11. During the pendency of these LPAs, an order dated 24th

September, 2007 was passed by the Chief Labour

Commissioner, Government of India holding that the

appropriate government for DIAL is the Central Government.

By order dated 22nd November, 2007 the documents and file

relating to DIAL were sent to the Central Government. These

orders were challenged by DIAL in Writ Petition (C) No.139 of

2008. After getting the permission, AAI filed another Writ

Petition (C) No.6763 of 2008 challenging the said notification

on merit. The Division Bench of the High Court heard all

these matters together and passed the impugned order of 18th

December, 2009.

12. The review petition was preferred by the Union of India

which was decided on 12th March, 2010 by the High Court

modifying para 61 of the impugned judgment. Against the

7

impugned judgment of the Division Bench of the High Court,

two appeals were preferred by DIAL and three by AAI and one

by the Indira Gandhi International Airport TDI Karamchari

Union. In these appeals, two broad issues that arise are:

a) Who is the appropriate government for DIAL

under the CLRAA and ID Act? This is the

subject matter of SLP (C) No.369 of 2010 filed

by DIAL.

b) Whether the notification dated 26th July, 2004

is applicable to DIAL as it is issued by the

Central Government which is not the

appropriate government for DIAL and secondly

whether the notification that applies to the

`establishment of AAI' will be applicable to the

`establishment of DIAL' which only came into

existence on 4th April, 2006? This is the subject

matter of SLP (C) No.377 of 2010 filed by DIAL.

13. We deem it appropriate to deal with the basic objects and

reasons of passing the CLRAA. This Act was enacted with a

view to abolish the contract labour under certain

circumstances and to provide for better conditions of service to

the labour. The business of providing contract labour is

regulated as the contractor is required to obtain a licence and

the principal employer is not entitled to engage a contractor

without obtaining registration. The rules also contain detailed

provisions to carry out the purposes of the Act. It is significant

8

to note that the 1970 Act does not create any machinery or

forum for the adjudication of any dispute arising between the

contract labour and the principal employer of the contractor.

14. The object of the Act was dealt with by this Court in the

judgment of Gammon India Ltd. and Others v. Union of

India (UOI) and Others (1974) 1 SCC 596 which reads as

under:-

"The Act was passed to prevent the exploitation of

contract labour and also to introduce better

conditions of work. The Act provides for regulation

and abolition of contract labour. The underlying

policy of the Act is to abolish contract labour,

wherever possible and practicable, and where it

cannot be abolished altogether, the policy of the Act

is that the working conditions of the contract labour

should be so regulated as to ensure payment of

wages and provision of essential amenities. That is

why the Act provides for regulated conditions of

work and contemplates progressive abolition to be

extent contemplated by Section 10 of the Act.

Section 10 of the Act deals with abolition while the

rest of the Act deals mainly with regulation. The

dominant idea of the Section 10 of the Act is to find

out whether contract labour is necessary for the

industry, trade, business, manufacture or

occupation which is carried on in the

establishment."

15. The Central Government will be the appropriate government under

CLRRA for any establishment for whom the Central Government is the

appropriate government under the ID Act. The main question arises for

adjudication is whether the Central Government is the appropriate

9

government for DIAL under the ID Act? Section 2 (a) of the ID Act deals

with the appropriate government which reads as under:-

"2. In this Act, unless there is anything repugnant in the

subject or context,--

(a) "appropriate government" means--

(i) in relation to any industrial dispute concerning any

industry carried on by or under the authority of the

Central Government, or by a railway company [or

concerning any such controlled industry as may be

specified in this behalf by the Central Government] or

in relation to an industrial dispute concerning [a Dock

Labour Board established under section 5A of the

Dock Workers (Regulation of Employment) Act, 1948

(9 of 1948), or [the Industrial Finance Corporation of

India Limited formed and registered under the

Companies Act, 1956 (1 of 1956)] or the Employees'

State Insurance Corporation established under section

3 of the Employees' State Insurance Act, 1948 (34 of

1948), or the Board of Trustees constituted under

section 3A of the Coal Mines Provident Fund and

Miscellaneous Provisions Act, 1948 (46 of 1948), or the

Central Board of Trustees and the State Boards of

Trustees constituted under section 5A and section 5B,

respectively, of the Employees' Provident Fund and

Miscellaneous Provisions Act, 1952 (19 of 1952), or

the Life Insurance Corporation of India established

under section 3 of the Life Insurance Corporation Act,

1956 (31 of 1956), or [the Oil and Natural Gas

Corporation Limited registered under the Companies

Act, 1956 (1 of 1956)], or the Deposit Insurance and

Credit Guarantee Corporation established under

section 3 of the Deposit Insurance and Credit

Guarantee Corporation Act, 1961 (47 of 1961), or the

Central Warehousing Corporation established under

section 3 of the Warehousing Corporations Act, 1962

(58 of 1962), or the Unit Trust of India established

under section 3 of the Unit Trust of India Act, 1963

(52 of 1963), or the Food Corporation of India

established under section 3, or a Board of

Management established for two or more contiguous

States under section 16, of the Food Corporations Act,

1964 (37 of 1964), or [the Airports Authority of India

constituted under section 3 of the Airports Authority of

India Act, 1994 (55 of 1994)], or a Regional Rural Bank

10

established under section 3 of the Regional Rural

Banks Act, 1976 (21 of 1976), or the Export Credit and

Guarantee Corporation Limited or the Industrial

Reconstruction Bank of India Limited], [the National

Housing Bank established under section 3 of the

National Housing Bank Act, 1987 (53 of 1987)], or [an

air transport service, or a banking or an insurance

company,] a mine, an oil field,] [a Cantonment Board,]

or a [major port, any company in which not less than

fifty-one per cent. of the paid-up share capital is held

by the Central Government, or any corporation, not

being a corporation referred to in this clause,

established by or under any law made by Parliament,

or the Central public sector undertaking, subsidiary

companies set up by the principal undertaking and

autonomous bodies owned or controlled by the Central

Government, the Central Government, and]

(ii) in relation to any other industrial dispute,

including the State public sector undertaking,

subsidiary companies set up by the principal

undertaking and autonomous bodies owned or

controlled by the State Government, the State

Government:

Provided that in case of a dispute between a contractor

and the contract labour employed through the

contractor in any industrial establishment where such

dispute first arose, the appropriate government shall

be the Central Government or the State Government,

as the case may be, which has control over such

industrial establishment.

(aa) "arbitrator" includes an umpire;

(aaa) "average pay" means the average of the wages payable

to a workman--

(i) in the case of monthly paid workman, in the three

complete calendar months,

(ii) in the case of weekly paid workman, in the four

complete weeks,

(iii) in the case of daily paid workman, in the twelve

full working days,

preceding the date on which the average pay becomes

payable if the workman had worked for three complete

calendar months or four complete weeks or twelve full

working days, as the case may be, and where such

11

calculation cannot be made, the average pay shall be

calculated as the average of the wages payable to a

workman during the period he actually worked;."

16. Firstly, the Central Government is the "appropriate government"

in relation to any industrial dispute concerning any industry carried on

by or under the authority of the Central Government. Secondly, the

Central Government is the "appropriate government" in relation to

industrial disputes concerning AAI. Thirdly, the Central Government is

the "appropriate government" in relation to industrial disputes

concerning an air traffic service. Thus, if DIAL's industry is carried on

"under the authority" of the Central Government, if the dispute in

question can be said to concern AAI, or the dispute in question can be

said to concern an "air transport service", then the Central Government

is the "appropriate government" both under ID Act and CLRAA.

17. In these appeals, the validity of the Notification dated 26th

July, 2004 issued by the Central Government under Section

10(1) CLRAA was assailed by AAI and DIAL. It was also urged

that the Notification dated 26th July, 2004 cannot bind DIAL.

18. It was further contended that DIAL is not an agent of AAI

and DIAL cannot be considered as a 'delegate' of such an

entity. It was also contended that an "establishment" in

question is that of DIAL, wherever it conducts its business

and that in relation to DIAL there has to be a separate Section

10 (1) notification issued by the Government of the NCT Delhi

12

prohibiting the employment of contract labour in trolley

retrieval work in the establishment of DIAL. According to

DIAL, NCT Delhi is an "appropriate government" to issue the

notification. DIAL also disputed that it did not carry on the

'air transport service'. It was pointed out that DIAL is not

required to and in fact does not have a licence issued to it

under Rule 134 of the Aircraft Rules. It is submitted that DIAL

is performing its functions independently in its own

establishment which is not that of AAI's.

19. The workers' union submitted that the notification dated

26th July, 2004 clarified the position of DIAL. According to

them, the definition of the term under CLRAA does not

envisage multiple principal employers or establishments. It

was submitted that the definition of an 'establishment' under

CLRAA is materially different from the definition of that term

under the ID Act which envisages separation of

establishments. For the purposes of CLRAA, it was submitted

that the prohibition on employment of the contract labour in

a job is qua the establishment and operates irrespective of any

change in the principal employer as long as the process,

operation or other work continues in that establishment.

13 Alternatively, it was submitted that even if DIAL is taken to be

the principal employer which has stepped into the shoes of AAI

by virtue of Operation, Management, Development and

Agreement (for short "OMDA"), the notification under Section

10 (1) CLRAA would bind it and for DIAL too the appropriate

government would be the Central Government.

20. It was also submitted that DIAL is providing an "air

transport service", therefore, the appropriate government is

the Central Government. The Central Government defended

the notification of 26th July, 2004. It was submitted that

adopting a contrary interpretation would defeat the objective

and purpose of CLRAA. The Central Government submitted

that DIAL is operating under the authority of the Central

Government. The industry that is carried on by DIAL by virtue

of OMDA is relatable to the authority granted by Section 12A

of the Airport Authority of India Act 1994 (55 of 1994) (for

short, the `AAI Act'). It was submitted that DIAL is rendering

"air transport service" including emplaning and deplaning of

passengers, handling of passengers' luggage, booking of cargo,

and, therefore, the Central Government is the appropriate

government.

14 21. The Division Bench held that the notification dated 26th

July, 2004 issued by the Central Government under Section

10(1) CLRAA is valid and binding on it. The Division Bench in

the impugned judgment held that the recourse to the ID Act

for the purposes of understanding what is an "establishment"

is misconceived since the definition of 'establishment' under

CLRAA is unambiguous. It is futile to seek recourse to ID Act

to understand what is an 'establishment' for the purposes of

CLRAA. The Division Bench further held that the

establishment is one and it cannot be divided into several

small establishments where for one part the appropriate

government would be the Central Government and for the

other part it would the State Government. Such an

interpretation would run counter to the scheme of CLRAA and

would defeat its object and purpose.

22. The Division Bench also held that it is inconceivable by

virtue of Section 12A of the AAI Act, that only the functions

and powers of AAI stand transferred and not the

corresponding obligations. In fact, in terms of Clause 5.1 of

OMDA, the statutory obligations under CLRAA which are that

of AAI and its contractors also get transferred to CLRAA. This

15

transfers all powers and functions and correspondingly the

obligations under CLRAA by virtue of Section 12A of the AAI

Act.

23. The Division Bench held that:

"....In fact OMDA makes an express reference to the

AAI Act. Consequently, consistent with the

observations of the Supreme Court in the SAIL case,

the exercise by DIAL of the functions and powers of

DIAL in relation to the Delhi airports is traceable to

Section 12A of the AAI Act and therefore in relation

to the Delhi airports the Central Government will

continue to remain the appropriate government.

Further, the provisions of the AAI Act show that

there is extensive control of the Central Government

over the functioning of AAI. The authority of the

Central Government is conferred by the statute

itself. Therefore, it is not correct to contend that

consequent upon OMDA, the establishment of AAI

i.e. the Delhi airports ceased to be under the control

of the Central Government.

Therefore, the inescapable conclusion is that

consistent with the observations in the SAIL case,

the statute itself contemplates the Central

Government to be the appropriate government

notwithstanding that there has been a privatization

of the management of the Delhi airports. By being

brought within the ambit of Section 12 A of the AAI

Act, even the private actor i.e. DIAL has been

brought within the ambit of the control and

authority of the Central Government. In fact, there

is an express reference to the AAI Act in the body of

the OMDA itself. If there was no provision like

Section 12 A in the AAI Act, there could not have

been an OMDA between AAI and DIAL."

16

24. After examining the settled legal principles, the Division

Bench held that irrespective of whether the amendment to

Section 2(a) I.D. Act was later, the appropriate government for

the purposes of Section 10 CLRAA in the instant case

continues to be the Central Government.

25. The definition of "air transport service" is certainly wider

than "air traffic service". This has to be seen also in the

context of Section 2(i) which defines "civil enclave" to mean as

under :

2(i) "civil enclave" means the area, if any, allotted at

an airport belonging to any armed force of the

Union, for use by persons availing of any air

transport services from such airport or for the

handling of baggage or cargo by such service, and

includes land comprising of any building and

structure on such area."

26. The Division Bench further observed that when the above

definitions are read along with Section 1(3) of the AAI Act, it is

plain that the AAI Act will apply to a civil enclave. It is clear

that the handling of baggage or cargo by an air transport

service would form part of the services provided in a civil

enclave. The functions that have been excluded under Section

12A(1) of the AAI Act are "air traffic services or watch and

17

ward at airport and civil enclaves". In other words, air traffic

services and provision of watch and ward at the airport and

civil enclaves remain with AAI, notwithstanding that it has

entered into an agreement of OMDA with DIAL.

27. The Division Bench further observed that the Air Traffic

Rules envisage that all the licences for air and air traffic

service would be issued separately. That by itself may not be

determinative of whether trolley retrieval forms part of the

services to be provided by DIAL in terms of OMDA. Only 'air

traffic services and provision of watch and ward' are, in terms

of Section 12A of the AAI Act to be retained by AAI as part of

its functions. The Division Bench viewed that the trolley

retrieval along with toilets and handling of baggage or car

within the area of a 'civil enclave' are recognized as essential

services by virtue of Schedule 16 to the OMDA. This is what is

relevant in determining whether trolley retrieval is also part of

the services provided in the establishment. Therefore,

notwithstanding whether DIAL is actually offering other kinds

of air transport services, it is certainly meant to provide

trolley retrieval services at the Delhi airports.

18 28. The Division Bench also came to the categorical finding

that for the purpose of establishment of Delhi airport, it is the

Central Government that continues to be the "appropriate

government". The Division Bench also came to the conclusion

that in view of Section 12A of AAI Act, the obligation flowing

from the said notification under Section 10(1) of CLRAA will

continue to bind every private player that steps into the shoes

of AAI even for some of its functions. Otherwise, every time a

fresh agreement is entered into, the entire process of getting a

notification issued by the appropriate government in relation

to the same work of trolley retrieval and with the same

establishment vis-a-vis such private player has to be re-stated.

That was never the intention of the legislature in enacting

CLRAA and in particular Section 10 CLRAA. Such

interpretation would defeat the rights of the workmen which

are meant to be protected by the CLRAA.

29. The Division Bench of the High Court came to the

following conclusions:

(i) That in relation to airport, it is the Central

Government which is the appropriate

government for the purpose of CLRAA;

19

(ii) DIAL is equally bound by the Notification

dated 26th July, 2004 issued by the Central

Government;

30. The most useful starting point of analysis is Section 10 of

CLRAA. Sub-Section (1) reads as follows:

"Notwithstanding anything contained in this Act,

the appropriate government may, after consultation

with the Central Board or, as the case may be, a

State Board, prohibit, by notification in the official

gazette, employment of contract labour in any

process, operation or other work in any

establishment."

31. Two critical issues are raised by DIAL to suggest that the

Central Government's 26th July, 2004 notification directed at

"AAI establishment" under the authority of Section 10(1) of

CLRAA is inapplicable to DIAL. First, DIAL claims that the

Central Government is not the appropriate government to

issue such notices to it. Second, DIAL claims that even if the

Central Government was the appropriate government, its 26th

July, 2004 notification was directed at "AAI establishment"

and AAI and DIAL are separate establishments. For the terms

of the notice to be made applicable to DIAL establishment, a

separate notification would have to be issued. These two

issues will be addressed in its own turn.

20

32. WHETHER THE CENTRAL GOVERNMENT IS THE

"APPROPRIATE GOVERNMENT"

CLRAA Section 2(1) reads as follows:

(1) In this Act, unless the context otherwise

requires,-

(a) "appropriate government" means,--

(i) in relation to an establishment in respect of

which the appropriate government under the

Industrial Disputes Act, 1947 (14 of 1947), is

the Central Government;

(ii) in relation to any other establishment, the

Government of the State in which that other

establishment is situated.

33. In the definition itself given in Section 2(a), specific

reference has been made to the Airport Authority of India

constituted under the AAI Act and the air transport service.

This provision makes it clear that the Central Government will

be the "appropriate government" under CLRAA for any

establishment for whom the Central Government is the

"appropriate government" under the ID Act. The question

which now arises for adjudication is whether the Central

Government is the "appropriate government" under the ID Act.

According to DIAL, it is not an "appropriate government",

therefore, it is imperative to analyse this provision. Section

21 2(a) of the ID Act indicates that the Central Government is the

"appropriate authority" in three relevant situations:

(i) The Central Government is the "appropriate

authority" in relation to any industrial dispute

concerning any industry carried on by or

under the authority of the Central

Government.

(ii) The Central Government is the "appropriate

government" in relation to the industrial

disputes concerning AAI.

(iii) The Central Government is the "appropriate

government" in relation to industrial dispute

concerning air transport service.

34. Both AAI and the air transport service have been

specifically incorporated in the Section itself. Thus, if DIAL

industry is carried on under the authority of the Central

Government, the dispute in question can be said to concern

AAI or if the dispute in question can be said to concern air

transport service, then the Central Government is the

appropriate authority both for ID Act and CLRAA. It may be

pertinent to properly comprehend the relevant statute.

35. The AAI Act was constituted for the better administration

and cohesive management of airports and civil enclaves

whereat air transport services are operated or are intended to

22

be operated and of all aeronautical communication stations for

the purpose of establishing or assisting in the establishment of

airports and for matters connected therewith or incidental

thereto.

36. In Section 2 of the AAI Act, air transport service has been

defined in Section 2(e) of the Act which is set out as under:

"air transport service" means any service, or any

kind of remuneration, whatsoever, for the transport

by air of persons, mail or any other things, animate

or inanimate, whether such service relates to a

single flight or series of flights;

37. Section 12A of the AAI Act, which was inserted with effect

from 1.7.2004, reads as under:

"12A. Lease by the authority.- (1)

Notwithstanding anything contained in this Act, the

Authority may, in the public interest or in the

interest of better management or airports, make a

lease of the premises of an airport (including

buildings and structures thereon and appertaining

thereto) to carry out some of its functions under

section 12 as the Authority may deem fit;

Provided that such lease shall not affect the

functions of the Authority under section 12 which

relates to air traffic service or watch and ward at

airports and civil enclaves.

(2) No lease under sub-section (1) shall be

made without the previous approval of the Central

Government.

23 (3) Any money, payable by the lessee in terms

of the lease made under sub-section (1), shall form

part of the fund of the Authority and shall be

credited thereto as if such money is the receipt of

the Authority for all purposes of section 24.

(4) The lessees, who has been assigned any

function of the Authority under sub-section (1),

shall have all the powers of the Authority necessary

for the performance of such function in terms of the

lease."

38. It is clear from Section 12A that AAI may in public

interest or in the interest of a better management of the

airport, make a lease of the premises of the airport to carry out

some of its functions under Section 12 as the Authority may

deem fit. Detailed functions of the Authority have been

enumerated in Section 12. Out of those functions under

Section 12A, some functions can be delegated on lease in the

public interest or in the interest of better control and

management of the airports. Consequently, in pursuance of

the agreement with DIAL, some functions of AAI were leased

out to DIAL. DIAL argued that not only its own industry is

not carried on under the authority of the Central Government

but further that not even AAI's authority is carried on under

the authority of the Central Government.

24 39. It is relevant to mention that DIAL derives its authority

from AAI and AAI derives its authority from the powers given

by the Central Government. The question, of course, is

whether DIAL works "under the authority" of the Central

Government and therefore, whether the Central Government is

the "appropriate authority" for DIAL?

40. In the impugned judgment, the Division Bench has clearly

held that AAI works "under the authority" of the Central

Government.

41. It would be relevant to recapitulate the Statement of

Objects and Reasons for passing the AAI Act. The Statement

of Objects and Reasons reads as under:

"STATEMENT OF OBJECTS AND REASONS

Until 1971, the Director General of Civil Aviation

was entrusted with the responsibility not only of

regulatory functions relating to civil aviation but

also of construction and management of airports,

air traffic control and air space management in the

country.

2. Considering the need for heavy investments and

operational flexibility required for construction and

management of large airports, the International

Airports Authority of India (IAAI) was constituted as

an autonomous body under the International

Airports Authority Act, 1971. Four international

airports, namely, Delhi, Bombay, Madras and

25

Calcutta were transferred to IAAI with effect from

1.4.1972; later, Trivandrum airport was also

transferred to IAAI. In 1985, it was felt that similar

treatment was required for domestic airports and

air traffic control and related services.

Consequently, the National Airports Authority (NAA)

was constituted under the National Airports

Authority Act, 1985.

3. International airports are put to more intensive

use and generate substantial revenues which

accrue to the IAAI. Revenues of the NAA are much

less buoyant because a number of its airports do

not have any commercial air service whatsoever

while many others have only infrequent operations.

The NAA has, therefore, not been able to generate

adequate resources to meet the requirements of

development and modernization. To overcome this

handicap and provide for closer integration in the

management of airports and air traffic contract

services in the country, it has been found necessary

to merge the IAAI and the NAA, which the Bill seems

to achieve.

4. The salient features of the Bill are:-

(a) Constitution of a single unified Airports

Authority of India to control and manage both the

national and international airports in the country

and transfer and vesting of the undertakings of the

International Airports Authority of India and

National Airport Authority in the said Airports

Authority of India.

(b) Repeal of the International Airports

Authority of India Act, 1971 and the National

Airports Authority Act, 1985.

(c) All licences, permits, quotas and

exemptions granted to the International Airports

Authority of India or the National Airports Authority

26

be deemed to have been granted to the Airports

Authority of India.

(d) Guarantees given for or in favour of the

International Airports Authority of India or the

National Airports Authority to continue to be

operative in relation to the Airports Authority of

India.

(e) Every officer or other employee of the

International Airports Authority of India and the

National Airports Authority, serving in its

employment immediately before the appointed day,

to become an officer or other employee, as the case

may be, of the Airports Authority of India, with

option to resign.

(f) Power of the Central Government to give

directions to the Airports Authority of India.

5. The Bill seeks to achieve the aforesaid

objectives."

42. A close reading of the objects and reasons indicates that

the Central Government under Section 12A of the AAI Act has

retained the power to give directions in the public interest or

in the interest of better management to lease the premises of

the airport to carry out some of its functions under Section

12A, as the authority may deem fit. Some of its (AAI's)

functions have been leased out to DIAL. This has been done

under Section 12A(2) with the previous approval of the Central

Government. On proper scrutiny of the provisions of the AAI

27

Act, it is abundantly clear that the Central Government has

control over AAI and AAI has control over DIAL.

43. DIAL claims that if AAI's industry was being carried out

under the authority of the Central Government under Section

2 of the ID Act, there would have been no need for the

legislature to separately include AAI as an "enumerated

industry". Such reasoning would be seen on a plain reading of

the phrase: "under the authority of the Central Government",

as DIAL itself has admitted that all these industries, on a

cursory look, seem to be by or under the control of the Central

Government. Further, this line of thinking would imply that

none of the many industries enumerated in ID Act can be held

to act "under the authority of the Central Government". While

this is conceivably the case, it may be more likely that the

authors of the ID Act, in listing the enumerated industries,

simply wanted to ensure that those industries were covered by

the Act, without meaning to affect the separate issue of

whether those industries were also acting "under the authority

of the Central Government." Further, while it is fair to assume

that the legislature attempts to avoid tautology, such canons

are not necessarily dispositive. It is well established canon of

28

statutory construction that the legislature is known to avoid

tautology and redundancy.

44. The crucial questions which need our adjudication are:

whether DIAL works under the Central Government and

whether the Central Government is the 'appropriate

government' for DIAL?

45. The AAI Act was passed by the Central Government "to

provide for the constitution of the Airports Authority of India'

which was in turn charged with the "better administration and

cohesive management of airports." Preamble to Section 12A of

the AAI Act allows AAI to contract with third parties to perform

some of AAI's functions (in the public interest or in the interest

of better management of airports). It was this proviso which

allowed AAI to assign some of its functions to DIAL through

OMDA, responsibility for trolley collection services at the

Indira Gandhi International Airport and the domestic airport.

46. DIAL claims that if AAI's industry was being carried out

under the authority of the Central Government under Section

2 of the ID Act, then there would have been no need for the

legislature to separately include AAI as an "enumerated

29

industry". On the one hand, this argument of DIAL is correct.

On the other hand, however, such reasoning would seem to

contradict a plain reading of the phrase "under the authority

of the Central Government" as DIAL itself has admitted, "all

these industries, on a cursory look seem to be by or under the

control of the Central Government." Further, this line of

thinking would imply that none of the many industries

enumerated under Section 2 of the ID Act can be held to act

"under the authority of the Central Government". While this is

conceivably the case, it may be more likely that the framers of

the ID Act, in listing the enumerated industries simply wanted

to ensure that these industries were also acting "under the

authority of the Central Government."

47. The Constitution Bench of this Court in Steel Authority

of India Limited & Others etc. etc. v. National Union

Water Front Workers and Others etc. etc., (2001) 7 SCC 1,

popularly known as 'SAIL' case held:

"Where the authority, to carry on any industry for or

on behalf of the Central Government, is conferred

on the government company/any undertaking by

the statute under which it is created, no further

question arises."

30

48. AAI, a government undertaking has been created by a

statute, to carry out the air transport industry on behalf of the

Central Government. In the words of the AAI Act itself, the

Act was created :

"....for the transfer and vesting of the undertakings

of the International Airports Authority of India and

the National Airports Authority to and in the

Airports Authority of India so constituted for the

better administration and cohesive management of

airports and civil enclaves..." (Preamble)

49. If the passage from SAIL's case is to be taken at its face

value, it would appear that AAI clearly functions "under the

authority" of the Central Government, and that the Central

Government is, therefore, the "appropriate government" under

the terms of CLRAA and ID Act.

50. In the impugned judgment, the Division Bench correctly

held that "the provisions of the AAI Act show that there is

extensive control of the Central Government over the

functioning of AAI." Section 12A reveals control of the Central

Government on AAI. AAI has to obtain approval from the

Central Government before delegating any of its functions to

third parties, such as DIAL. This clearly indicates that the

Central Government has complete control over AAI. Sections 2,

31 6 and 10 of the AAI are further examples of governmental

reservations of authority. The Central Government retains its

statutory control over AAI. In the impugned judgment, the

High Court correctly came to the conclusion that "the

authority of the Central Government is conferred by the

statute itself."

51. In fact, in these cases, we are merely concerned with very

limited controversy whether DIAL works under the authority of

the Central Government or not? DIAL, of course, claims that

it does not. In the SAIL judgment, the Constitution Bench

held as under :

"the phrase "any industry carried on under the

authority of the Central Government" implies an

industry which is carried on by virtue of, pursuant

to, conferment of, grant of, or delegation of power or

permission by the Central Government to a Central

Government company or other government

company/undertaking. To put it differently, if there

is lack of conferment of power or permission by the

Central Government to a government company or

undertaking, it would disable such a

company/undertaking to carry on the industry in

question."

52. In case the Central Government had never granted

permission, pursuant to Section 12A of the AAI Act, DIAL

would not be able to carry out functions at the Delhi airports.

32 The entire functioning of DIAL is fully dependent on the grant

of permission by the Central Government. The Constitution

Bench, in the SAIL judgment further observed as under :

"may be conferred, either by a statute or by virtue of

the relationship of principal and agent or delegation

of power. Where the authority, to carry on any

industry for or on behalf of the Central Government,

is conferred on the government company/any

undertaking by the statute under which it is

created, no further question arises. But, if it is not

so, the question that arises is whether there is any

conferment of authority on the government/any

undertaking by the Central Government to carry on

the industry in question. This is a question of fact

and has to be ascertained on the fact and in the

circumstances of each case."

53. The undertakings need not be government undertakings

to have had authority conferred upon them. But the word

"government" clearly modifies "company." However, it cannot

modify "undertaking," for the phrase "government/any

undertaking". Thus, it would seem that any "undertaking"-

even private undertakings, like DIAL - may function "under

the authority" of the Central Government. Whether or not they

do it, as the Constitution Bench noted, "a question of fact

which has to be ascertained on the facts and in the

circumstances of each case."

33 54. In the facts and circumstances of these cases, it is

abundantly clear that DIAL operates under the authority of

the Central Government.

55. In the impugned judgment, it was noted that "the

functions and powers of DIAL in relation to the Delhi airports

are traceable to Section 12A of the AAI Act." It is clear that

without Central Government's permission, AAI could not have

delegated any power to DIAL. In other words, the functioning

of DIAL at the Delhi airports itself was fully dependent on the

approval of the Central Government. In other words, DIAL

could not have received its contract with AAI without the

Central Government's approval. That being the case, by a

plain reading of the phrase it seems that "DIAL functions

under the authority of the Central Government".

56. It was argued on behalf of DIAL that "if the intent of the

Parliament was to make DIAL come under the authority of the

Central Government then it would have militated against the

basic objective of achieving privatization." DIAL, however, does

not explain how having the State Government as the

appropriate government - the only alternative under CLRAA

34

and ID Act - would be any more conducive to privatization. It

is now clear that the Central Government does not impede

privatization any more than the State Government; after all, it

was the Central Government that sought to encourage

privatization through the AAI Act by incorporating Section

12A in the Act.

57. In case AAI and DIAL act under the authority of different

governments it would bring about absurd results : AAI could

simply circumvent potential Central Government orders by

delegating various functions to third parties, such as DIAL.

Of course, AAI would need to obtain Central Government

approval prior to making such a delegation under Section 12A

of the AAI Act, but it nevertheless seems unlikely that the

Central Government would intend to maintain authority over

AAI's actions, while allowing actions performed by other

entities on behalf of AAI, such as DIAL, to be carried out under

the authority of the State Government. DIAL has made no

suggestions as to why the Central Government might have

intended such a result while drafting the AAI Act and CLRAA,

and there is, therefore, little justification for coming to such a

conclusion.

35 58. DIAL expressly assumed the "rights and obligations

associated with the operation and management of the airport"

through OMDA. While Section 12A of the AAI Act only notes

that the "powers and functions" of AAI will be transferred to its

lessors, it is "inconceivable that by virtue of Section 12A the

powers and functions of AAI will stand transferred and not the

corresponding obligations." If it was the "obligation" of AAI to

follow valid directions of the Central Government by virtue of

its status as an enumerated industry, and if DIAL has

admittedly assumed those same obligations through OMDA,

then DIAL is presumably also obligated to follow such

directions. Again, a contrary interpretation would allow AAI to

circumvent the Central Government's exercise of authority

over its work merely by contracting it out to third parties. It is

abundantly clear that the Central Government is the

appropriate government qua DIAL and consequently the said

Notification of 26th July, 2004 is equally applicable to DIAL.

59. Under the ID Act (and therefore CLRAA), the third

situation in which the Central Government is the "appropriate

36

Government" is "in relation to industrial disputes concerning

air transport services."

60. The question for the purposes of this case, then, is

whether the trolley retrieval services performed by DIAL are

done "for the transport by air of persons, mail, or any other

thing." Clearly, trolley retrievers themselves are not physically

transporting anything by air. However, it is entirely possible

that the drafters of the AAI Act did not intend to restrict the

coverage of this provision merely to pilots, stewardesses, and

others engaged in the actual, physical transport of people and

objects, as DIAL would have liked the Court to believe.

Clearly, trolleys at airports relate to air transportation- just as

they relate to "a single flight or a series of flights."

61. On behalf of DIAL, it was submitted that "air transport

services" as enumerated industry under ID Act replaced an

earlier listing of "Indian Airlines" and "Air India", two

corporations clearly engaged in the actual, physical

transportation of individuals by air.

62. At the time of amendment when private airline operators

had started functioning and as "air transport service" they

37

included all airline operators, private or public and the said

industry was included as an enumerated industry. This

makes it abundantly clear that "air transport service" concerns

airline operators only.

63. Section 12(2) of the AAI Act reads as under:

"It shall be the duty of the Authority to provide air

traffic service and air transport service at any

airport and civil enclaves."

64. It may be relevant to mention that DIAL is not engaged in

the business of operating an airline for carrying passengers

and goods by air through flights. In fact, AAI is also not

involved in this activity and Section 12 of the AAI Act which

lists out the functions of AAI does not include the function of

carrying people and goods through air by flights operated by it.

As such, when AAI does not perform such function then there

is no question of transfer of such functions to DIAL.

65. It is the duty of the authority to provide all air transport

services at the airport, and if it is not the duty of the authority

to carry passengers and goods by air through flights, then by

the appellants own logic, air transport service must mean

more than the mere carriage of passengers and goods by air

38

through flights. If it did not, then there would be no reason

that "air transport service" would be listed as a "duty of the

Authority" under Section 12(2). This Section clearly indicates

that it is the duty of the Authority to provide "air transport

service", such duty does not mean that the Authority provides

such services itself.

66. AAI is responsible under the AAI Act for providing air

transport service would not necessarily mean that DIAL also

does so.

67. In the instant case under Section 12A of the AAI Act all

functions have been given to DIAL except watch and ward

function, air traffic service and civil enclaves. From the

provisions of OMDA, it is clear that all functions of AAI barring

reserved activities and all land except certain carved out

assets has been given to DIAL.

68. DIAL has admitted that AAI has transferred to it all

functions except those related to watch and ward, air traffic

service and civil enclaves, none of which can be considered as

"air transport service". That being the case, AAI must have

transferred its duty to provide "air transport service" to DIAL

39

and the Central Government must, therefore, be the

appropriate government for DIAL under the CLRAA and ID Act.

AAI and DIAL are not separate establishments, but even if

t hey were, the 26 th July, 2004 notification applies to DIAL

anyway

69. Section 10(1) of the CLRAA permits the "appropriate

government" to "prohibit employment of contract labour in any

process, operation or other work in any establishment. The

Central Government's 26th July, 2004 notification clearly

forbade the "AAI establishment" from employing trolley

retrievers as contract labour. The question, then, is whether

DIAL is part of "AAI establishment" for purposes of the

CLRAA?

70. DIAL contends that the establishment of AAI at the Indira

Gandhi International Airport and Domestic Airport underwent

a change and a new private entity in the form of the appellant

DIAL established its establishment, after being granted a lease

under Section 12A of the AAI Act. In support of this claim,

DIAL contends that it has complete overall control and

supervision over the Airport to the exclusion of AAI, and is not

an agent or delegate of AAI but is, rather, a separate and a

new principal entity to whom the Central Government's 26th

40

July, 2004 notification, even if otherwise valid, did not apply.

The Single Bench apparently agreed, holding that

"the notification itself has become irrelevant in view

of the privatization of the airports and a new

notification will have to be issued by the appropriate

government.

71. To address these claims, it is important to analyse the

definition of "establishment". Section 2(1)(e) of the CLRAA

defines "establishment" as follows:

" `establishment' means -

c) any office or department of the Government or a

local authority, or

d) any place where any industry, trade, business,

manufacture or occupation is carried on."

72. As this provision makes it clear, the definition of

"establishment" focuses either on (1) Place; or (2) Offices or

departments of the Government or a local authority. The 26th

July, 2004 notification must, therefore, have been directed at

one of these types of establishments.

73. On the one hand, AAI clearly cannot be considered a

local authority as it is charged with managing airports

throughout India. On the other hand, AAI also cannot be

considered an "office or department of the Government". The

41 AAI Act makes clear that AAI must, in certain circumstances,

obtain approval from the Central Government, thereby

implying that AAI is not itself the Central Government.

Therefore, "establishment" in this case cannot refer to "any

office or department of the Government or a local authority", it

must refer to a "place where any industry, trade, business,

manufacture or occupation is carried on". The Division

Bench in the impugned judgment held that the establishment

for the purposes of the CLRAA is a place where the industrial,

trade or business activity is carried on then it necessarily

follows in the context of the present case that it is the Delhi

Airports which constitute the establishment of AAI and in turn

the establishment of DIAL.

74. This Court in SAIL's case held as under:

"It is thus evident that there can be plurality of

establishments in regard to the Government or local

authority and also in regard to any place where any

industry, trade, business, manufacture or

occupation is carried on."

75. Accordingly, there could be multiple establishments at

the airport. That being the case, the Division Bench's

assertion that the establishment of AAI is in turn the

establishment of DIAL must be justified.

42 76. It would be pertinent to refer to the definition of

"contractor" in Section 2(1)(c) of CLRAA, which reads as under:

"`contractor', in relation to an establishment, means

a person who undertakes to produce a given result

for the establishment, other than a mere supply of

goods or articles of manufacture to such

establishment, through contract labour or who

supplies contract labour for any work of the

establishment and includes a sub-contractor."

77. DIAL "undertakes to produce a given result" - trolley

retrieval services, among other things - for AAI establishment

through contract labour. To prove, otherwise, DIAL would

need to be able to assert the following, adopted from the

CLRAA definition of contractor excerpted above.

"DIAL does not undertake to produce any result for

AAI establishment. Instead, DIAL undertakes to

produce result for its own establishment"

78. DIAL while performing work on behalf of AAI, it is not

performing work on behalf of AAI establishment. Instead, it is

merely working on behalf of its own establishment.

79. Further, all the independence DIAL does have, the AAI

Act and OMDA make it clear that AAI maintains ultimate

responsibility for the airport.

43 80. The question that has to be answered is who has control

of the entire establishment? Noticing that air traffic services

and security are the heart of the airport and also noticing the

clauses of OMDA providing for overall supervision of DIAL by

AAI, checking of accounts, step in rights of AAI and so on, it

must be concluded that AAI has overall control of the airport

site.

81. Admittedly, DIAL has been leased out the portion of AAI's

work, which DIAL only has incomplete control over as well as

the fact that DIAL meets the definition of a contractor under

the CLRAA, further suggests that DIAL is nothing more than a

contractor for AAI establishment. DIAL is not, in other words,

a principal employer of an independent establishment. That

being the case, the 26th July, 2004 notification, declared at AAI

establishment, must also apply to DIAL.

82. The fact that DIAL is a private entity is of no assistance

to it. In SAIL's case, the Constitution Bench explicitly held

that the definition of "establishment" in the CLRAA takes in its

fold purely private undertakings.

44 83. This issue is fully settled by the foregoing analysis. From

the analysis, DIAL falls under AAI establishment. For

example, Clause 5.1 of OMDA, which notes that the "rights

and obligations associated with the operation and

management of the Airport would stand transferred to" DIAL,

would seem to suggest that orders given to AAI establishment

would also apply to DIAL establishment, even if the two were,

as DIAL claims, separate establishments. If AAI establishment

is obligated to abolish contract labour and DIAL establishment

(even if it is somehow separate) has assumed AAI

establishment's obligations through the OMDA, then DIAL is

presumably required to fulfil those obligations. Critical to this

inference is the fact that the Central Government's 26th July,

2004 notification was issued before OMDA was signed.

84. The contention that DIAL would not also be bound by the

obligations of AAI establishment would once again lead to

absurd consequences. In the impugned judgment, the Division

Bench correctly observed that "every time a fresh agreement is

entered into, the entire process of getting a notification issued

by the appropriate Government in relation to the same work of

trolley retrieval and with the same establishment vis-a-vis

45

such private player" must be repeated. This interpretation

would defeat the rights of the workers, which are meant to be

protected by CLRAA. The Division Bench has correctly

observed that the obligation flowing from the notification

under Section 10(1) CLRAA shall continue to bind every

private player that steps into the shoes of AAI.

85. We have carefully heard the learned counsel for the

parties and perused the written submissions filed by them. In

our considered view, the Central Government is the

appropriate government for DIAL for the following reasons -

(i) DIAL could not have entered into a contract

with AAI without approval of the Central

Government according to the mandate of

Section 12A of the AAI Act. In this view of the

matter, it is abundantly clear that DIAL

functions "under the authority" of the Central

Government;

(ii) AAI clearly acts under the authority of the

Central Government and DIAL acts under the

authority of AAI because of its contract with

DIAL. Then it can be logically stated that DIAL

works under the authority of the Central

Government;

(iii) The Central Government has given AAI

responsibility for overseeing the airports. To

fulfil its obligations, AAI contracted with DIAL.

However, it is clear that DIAL's work

"concerns" AAI, if DIAL does not perform its

work properly or adequately, then AAI will be

46

breaching its statutory obligation and would

be responsible for the consequences.

(iv) AAI is under an obligation to follow the

directions of the Central Government and if

DIAL has admittedly assumed those

obligations through the OMDA, then DIAL is

presumably also obligated to follow such

directions. Again, a contrary interpretation

would allow AAI to circumvent the Central

Government's exercise of authority over its

work merely by contracting it out to third party

(DIAL).

(v) Clause 5.1 of the OMDA specifically notes that

the "rights and obligations associated with the

operation and management of the Airport

would stand transferred" to DIAL. If AAI was

admittedly obligated to follow the 26th July,

2004 notification and DIAL has assumed all of

AAI's obligations, then DIAL must also be

obligated to follow the notification. In other

words, the notification issued by the Central

Government is equally binding on DIAL.

(vi) Holding the 26th July, 2004 notification

inapplicable to DIAL would mean that the

Government would have to issue separate

notification every time AAI contracts with a

third party. This would clearly violate the

basic objects and reasons of CLRAA.

(vii) The security of contract labour working for AAI

envisaged, a law cannot be made to depend on

the private sector. If the legislature had found

it fit to specifically include AAI as an

enumerated industry under the ID Act, it is

extremely unlikely that it would have intended

for AAI to be able to circumvent the Central

Government orders by contracting with private

parties.

47 (viii) The privatization of the airports does not mean

that the "appropriate government" cannot be

the Central Government. According to the

Constitution Bench judgment of this Court in

the case of SAIL, the definition of

`establishment' in the CLRAA takes in its fold

purely private undertakings...".Concerns about

privatization are, therefore, unfounded.

(ix) Under Section 12(2) of the AAI Act, AAI is

obliged to provide air traffic service and air

transport service at the airport. DIAL admits

that AAI has transferred all of its

responsibilities at the airports with the

exception of certain reserved functions. Since

industries concerning air transport service

function under the authority of the Central

Government, and since AAI has transferred its

"air transport service" responsibilities to DIAL,

the Central Government must be held to be the

appropriate Government for DIAL.

(x) The OMDA makes it clear that AAI maintains

ultimate responsibility for the airports. The

fact that DIAL was transferred only a portion of

AAI's work which DIAL only has incomplete

control over as well as the fact that DIAL meets

the definition of a contractor under the CLRA

Act further suggests that DIAL is nothing more

than a contractor for AAI establishment. That

being the case, notification dated 26th July,

2004 directed at AAI establishment must also

apply to DIAL.

(xi) The contention of DIAL that it would not be

bound by the obligation of AAI establishment

would lead to absurd consequences. The

Division Bench in the impugned judgment has

rightly pointed out that every time a fresh

agreement is entered into, the entire process of

getting a notification issued by the appropriate

government in relation to the same work of

48

trolley retrieval and with the same

establishment via-a-vis such private player

must be repeated. But this interpretation

would defeat the rights of the workmen which

are meant to be protected by the CLRAA.

(xii) In the impugned judgment, the Division Bench

of the High Court has correctly held that the

obligation flowing from the said notification

under Section 10(1) CLRAA should continue to

bind every private player that steps into the

shoes of AAI.

86. For the foregoing reasons, it is clear that the notification

dated 26th July, 2004 was equally binding on DIAL under the

CLRAA and, therefore, DIAL must abolish all contract labour

as per the terms of the notification.

87. We have no hesitation in coming to the conclusion that

the Central Government notification dated 26th July, 2004 is

clearly binding and applicable to DIAL. DIAL's obligation with

regard to the contract labour in general is clear from the said

notification. They are liable to be regularized as regular

employees of DIAL. DIAL has replaced many of the workers

with other trolley retrievers and it would be unrealistic to

expect DIAL to regularize the employment of their current

trolley retrievers and member of the workers' union alike and

49

inequitable to leave the current workers jobless so as to make

room for erstwhile workers of DIAL.

88. In view of the peculiar facts and circumstances of these

cases directing DIAL to regularize services of trolley retrievers

who worked with DIAL till 2003 would be harsh, unrealistic

and not a pragmatic approach, therefore, in the interest of

justice, we deem it proper to direct DIAL to pay Rupees five

lacs to each of the erstwhile 136 workers of DIAL who were

working for them as trolley retrievers till 2003 and in case any

worker has expired, then his or her legal heirs would be

entitled to the said amount. This compensation is paid to the

workers in lieu of their permanent absorption/reinstatement

with DIAL and their claim of back wages. This is in full and

final settlement of entire claims of erstwhile 136 workers of

DIAL.

89. We direct DIAL to pay the amount to these 136 erstwhile

workers of DIAL within three months after proper verification.

In case the amount, as directed, is not paid within the

prescribed period, then it would carry interest at the rate of

12% per month from that point till the amount is paid.

50 90. These appeals are accordingly disposed of in the

aforementioned terms. In the facts and circumstances of

these cases, we direct the parties to bear their own costs.

..................................J.

(Dalveer Bhandari)

.................................J.

(Deepak Verma)

New Delhi;

September 15, 2011

51