//
you're reading...
legal issues

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?

Indira Gandhi International Airport, India

Image via Wikipedia

 REPORTABLE

 IN THE SUPREME COURT OF INDIA

 CIVIL APPELLATE JURISDICTION

 CIVIL APPEAL NO. OF 2011

 [Arising out of SLP(C)No. 369 of 2010) 

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

 Versus

Union of India & Others ...Respondents

 WITH

 CIVIL APPEAL NO. 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. 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. OF 2011

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

 Airport Authority of India versus Union of India & Ors.

 WITH

 CIVIL APPEAL NO. 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. 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) Indira
 Gandhi International Airport TDI Karamchari 

 Union
 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) Union
 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) Airports
 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) Delhi
 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 

 9

the Central Government is the appropriate 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 

 10

 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 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 

11

 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 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 

 12

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 

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 

 13

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. 

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 

 14

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.

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 

 15

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 

transfers all powers and functions and correspondingly the 

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

Act. 

 16

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."

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 

 17

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 

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

services and provision of watch and ward at the airport and 

 18

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.

28. The Division Bench also came to the categorical finding 

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

 19

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;

 (ii) DIAL is equally bound by the Notification 

 dated 26th July, 2004 issued by the Central 

 Government;

 20

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.

32. WHETHER THE CENTRAL GOVERNMENT IS THE 

 "APPROPRIATE GOVERNMENT" 

 CLRAA Section 2(1) reads as follows:

 21

 (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 

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

"appropriate authority" in three relevant situations:

 22

 (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 

be operated and of all aeronautical communication stations for 

the purpose of establishing or assisting in the establishment of 

 23

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.

 (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 

 24

 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. 

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

from AAI and AAI derives its authority from the powers given 

 25

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 

 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 

 26

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 

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 

27

 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 

Act, it is abundantly clear that the Central Government has 

control over AAI and AAI has control over DIAL. 

 28

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 

statutory construction that the legislature is known to avoid 

tautology and redundancy. 

 29

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 

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

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

 30

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."

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

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

 31

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 aforementioned 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, 

6 and 10 of the AAI are further examples of governmental 

 32

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. 

The entire functioning of DIAL is fully dependent on the grant 

 33

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."

 34

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 

 35

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

is now clear that the Central Government impedes 

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.

 36

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 

 37

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 

 38

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 

 39

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 

 40

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 

they
 were, the 26th
 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 

 41

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 

 42

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.

 43

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.

 44

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.

 45

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 

 46

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 

 47

 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.

48

(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 

49

 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 

 50

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 this 

case 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. 

 51

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

 52
About these ads

About advocatemmmohan

ADVOCATE

Discussion

Comments are closed.

Blog Stats

  • 617,778 hits

ADVOCATE MMMOHAN

archieves

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Join 1,550 other followers

comments

k.inbasakaran,advoca… on Sec.138 of N.I.Act – Ter…
Follow

Get every new post delivered to your Inbox.

Join 1,550 other followers