Supreme Court of India
M/S. DELHI INTERNATIONAL AIRPORT PVT. LTD.versusUNION OF INDIA & ORS.
- Citation
- 2011 INSC 686
- Decided
- 15 September 2011
- Disposal
- Disposed off
- Bench
- DALVEER BHANDARI
Holding
The Central Government is the appropriate government for DIAL and the 26 July 2004 notification under the CLRAA is equally binding on DIAL.
Summary
The case concerned 136 contract workers who had been employed as trolley retrievers at Delhi airports and sought regularisation after the Central Government’s 2004 notification under the Contract Labour (Regulation and Abolition) Act, 1970 (CLRAA) prohibited such contract labour in the Airports Authority of India (AAI) establishment. The issue was whether the notification applied to Delhi International Airport Private Limited (DIAL), which had taken over airport operations in 2006 under an Operation, Management, Development and Agreement (OMDA) with AAI. The Supreme Court held that DIAL operates under the authority of the Central Government, making the Central Government the "appropriate government" under both the CLRAA and the Industrial Disputes Act, 1947. Consequently, the 2004 notification was binding on DIAL, obligating it to abolish contract labour in the trolley‑retrieval function. The Court directed DIAL to pay Rs 5 lakh to each of the 136 former workers as compensation in lieu of regularisation, noting that further regularisation would be impracticable. The appeals were disposed of, affirming the High Court’s order.
Issues considered
- The appropriate government for DIAL under the CLRAA and the Industrial Disputes Act
- Whether the Central Government’s 26 July 2004 notification prohibiting contract labour in the AAI establishment applies to DIAL
- Whether DIAL is a contractor or a principal employer within the meaning of the CLRAA
- The interpretation of ‘establishment’ under the CLRAA in the context of privatised airport operations
- The appropriate remedy for the former contract workers – regularisation or compensation
Legislation cited
- Airports Authority of India Act, 1994s. 12, s. 12A
- Contract Labour (Regulation and Abolition) Act, 1970s. 10(1), s. 12A
- Industrial Disputes Act, 1947s. 2(a)
Subjects
contract labourappropriate governmentCLRAAIndustrial Disputes ActprivatisationairportsDIALAAInotificationtrolley retrievalabolition of contract labour
Judgment
[2011) 13 (ADDL.) S.C.R. 1115
M/S. DELHI INTERNATIONAL AIRPORT PVT. LTD. A
v.
UNION OF INDIA & ORS.
(Civil Appeal No. 7872 of 2011 etc.)
SEPTEMBER 15, 2011
B
[DALVEER BHANDARI AND DEEPAK VERMA, JJ.]
Contract Labour (Regulation and Abolition) Act, 1970 -
ss. 10(1) and 12A - Issuance of Notification by the Central
Government u/s. 10 (1) prohibiting employment of contract C
labour of trolley retrievals in the establishment of the Airporl
Authority of India (AA/) at the Indira Gandhi International
Airporl and Domestic Airporl at Delhi - Delhi International
Airporl Private Limited (DIAL), private underlaking coming into
existence after the issuance of the said Notification, taking D
over the Airporls (Domestic and International) - Applicability
of the said Notification to DIAL - Appropriate government for
DIAL under the CLRAA and ID Act - Held: Central
Government is the appropriate government for DIAL and AA/
under the CLRAA and ID Act - Entire functioning of DIAL is E
fully dependent on the grant of permission by the Central
Government - Thus, DIAL operates and functions under the
authority of the Central Government - Central Government's
notification was _issued before Operation, Management,
Development and Agreement (OMDA) was signed, by virlue F
of which DIAL stepped into the shoes of AA/ - DIAL expressly
assumed the 'rights and obligations associated with the
operation and management of the airporl' through OMDA -
DIAL was transferred all of AAf's responsibilities at the airporls
except cerlain reserved functions which means that DIAL only G
had incomplete control, thus, DIAL was nothing more than a
contractor for AA/ establishment and was not a principal
employer of an independent establishment - Thus, the said
Notification, directed at AA/ establishment, was equally
1115 H
1116 SUPREME COURT REPORTS [2011] 13 (ADDL.) S.C.R.
A binding on DIAL under the CLRAA - DIAL to abolish all
contract labour as per the terms of the notification - In the
interest of justice, DIAL directed to pay Rupees five lacs to
each of the erstwhile workers of DIAL who were working for
them as trolley retrievers till 2003 - Industrial Disputes Act,
B 1947.
136 workers were employed by the contractor TOI
Company to do the work of trolley retrieving at the
Domestic and at the International Airport at Delhi in the
year 1992. The workmen approached the Contract
C Labour Court seeking abolition of contract labour system
and their absorption as regular employees. On 26th July
2004, the Central Government issued a Notification
abolishing the contract labour system. Airports Authority
of India (AAI) which had come into force challenged the
D notification. The High Court held that the present
proceedings could not be proceeded with till the matter
was resolved by the High Powered Committee (HPC) and
as such the matter went to the HPC and the Notification
was not given effect to. Meanwhile, the said 136 workers
E were removed from service in the year 2003 as the
contract of TOI Company tame to an end and a new
contractor 'SH' came in its place. Thereafter, from 4th
April 2006, a new private entity, Delhi International Airport
Private Limited (DIAL) took over the Airports (Domestic
F and International). 136 workers filed a writ petition praying
for their absorption in service as regular employees and
for implementation of the Notification dated 26th July,
2004. The Single Judge of the High Court dismissed the
writ petition holding that the establishment of AAI is no
G longer in existence and has changed and as such, the
Notification dated 26th July, 2004 cannot be applied to the
new entity DIAL and the appropriate government shall
have to issue a fresh Notification. Indira Gandhi
International Airport TOI Karamchari Union and Union of
H
DELHI INTERNATIONAL AIRPORT PVT. LTD. v. 1117
UNION OF INDIA & ORS.
India filed separate LPA's. During pendency of the LPA's A
the Chief Labour Commissioner, Government of India
passed an order holding that the appropriate government
for DIAL is the Central Government and the documents
and file relating to DIAL were sent to the Central
Government. DIAL filed a writ petition. AAI filed another B
writ petition challenging the said notification. The Division
Bench of the High Court held that in relation to airport, it
is the Central Government which is the appropriate
government for the purpose of CLRAA; and that DIAL is
equally bound by the Notification dated 26th July, 2004 c
issued by the Central Government. The review petition
filed by the Union of India was also disposed of.
Aggrieved, DIAL, AAI and the Indira Gandhi International
Airport TOI Karamchari Union filed the instant appeals.
The question which arose for consideration in these D
appeals are as to who is the appropriate government for
DIAL under the CLRAA and ID Act; that whether the
Notification dated 26th July, 2004 issued by the Central
Government under Section 10 (1) of the CLRAA
prohibiting employment of contract labour of trolley E
retrievals in the establishment of the Airport Authority of
India at the Indira Gandhi International Airport and
Domestic Airport.at Delhi would be applicable to DAIL
which only came into existence on 4th April, 2006.
F
Disposing of the appeals, the Court
HELD: 1.1. Section 2(a) of the Contract Labour
(Regulation and Abolition) Act, 1970 makes it clear that
the Central Government would be the "appropriate
government" under CLRAA for any establishment for G
whom the Central Government is the "appropriate
government" under the Industrial Disputes Act. Section
2(a) of the ID Act indicates that the Central Government
is the "appropriate authority" in three relevant situations
H
1118 SUPREME COURT REPORTS [2011) 13 (ADDL.) S.C.R.
A wherein both Airport Authority of India (AAI) and the air
transport service have been specifically incorporated
itself. Thus, if Delhi International Airport Private Limited
(DIAL) industry is carried on under the authority of the
Central Government, the dispute in question can be said
B 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 stah1te. [Paras 33 and 34) [1145-F-H; 1146-
C A-D-E]
1.2. The AAI Act was constituted for the better
administration and cohesive management of airports and
civil enclaves whereas air transport services are operated
or are intended to be operated and of all aeronautical
D communication stations for the purpose of establishing
or assisting in the establishment of airports and for
matters connected therewith or incidental thereto. [Para
35) [1146-F-G]
E 1.3. 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 foase 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
F 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
G
derives its authority from AAI and AAI derives its authority
from the powers given by the Central Government. In the
impugned judgment, the Division Bench clearly held that
AAI works "under the authority" of the Central
Government [Paras 38, 39 and 40) [1147-H; 1148-A-B-E]
H
DELHI INTERNATIONAL AIRPORT PVT. LTD. v. 1119
UNION OF INDIA & ORS.
1.4. A close reading of the objects and reasons A
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 B
authority may deem fit. Some of its (AAl'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 c
has control over AAI and AAI has control over DIAL. [Para
42] [1150-E-F]
1.5. 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 D
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 AAl's
functions (in the public interest or in the interest of better
management of airports). It was this proviso which E
allowed AAI to assign some of its functions to DIAL
through Operation, Management, Development and
Agreement (OMDA), responsibility for trolley collection
services at the Indira Gandhi International Airport and the
domestic airport. [Para 45) [1151-E-F] F
1.6. 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 G
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 H
1120 SUPREME COURT REPORTS [2011] 13 (ADDL.) S.C.R.
A are 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'. [Para 50)
B [1153-A-C)
1. 7. 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
C Delhi airports. The entire functioning of DIAL is fulty
dependent on the grant of permissron by the Central
Government. The undertakings need not be government
undertal<ings to have had authority conferred upon them.
But the word "government" clearly modifies "company."
However, tt cannot modify "undertaking," for the phrase
D "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, "a question of fact
which has to be ascertained on the facts and in the
E circumstances of each case." In the facts ·and
circumstances of these cases, it is abundantly clear that
DIAL operates under the authority of the Central
Government [Paras 52, 53 and 54) [1153-G-H; 1154-D-E)
F 1.8. The functions and powers .of DIAL in relation to
the Delhi airports are traceable to Section 12A of the AAI
Act. Without Central Gov.ernment'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
G dependent on the approval of the Central Government.
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". [Para 55) [1154-F-H]
H
DELHI INTERNATIONAL AIRPORT PVT. LTD. v. 1121
UNION OF INDIA & ORS.
1.9. DIAL does not explain how having the State A
Government as the appropriate government - the only
alternative under CLRAA and ID Act - would be any more
conducive to· privatization. The Central Government does
not impede privatization any more than the State
Government; after all, it was the Central Government that B
sought to encourage privatization through the AAI Act by
incorporating Section 12A in the Act. [Para 56] (1155-B-
C]
1.10. In case AAI and DIAL act under the authority of
different governments it would bring about absurd C
results: AAI could simply circumvent potential Central
Government orders by delegating various functions to
third parties, such as DIAL. AAI would need to obtain
Central Government approval prior to making such a
delegation under Section 12A of the AAI Act, but it D
nevertheless seems unlikely that the Central Government
would intend to maintain authority over AAl'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 made no E
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. [Para 57] (1155-D-E]
F
1.11. 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 G
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 H
1122 SUPREME COURT REPORTS (2011] 13 (ADDL.) S.C.R.
A 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
B 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. Under the ID Act (and therefore, CLRAA), the third•
c situation in which the Central Government is the-
"appropriate Government" is "in relation to industrial•
disputes concerning air transport services." [Paras 58•
and 59] [1155-G-H; 1156-A-C]
1.12. Trolley retrievers themselves are not physicallY"
P transporting anything by air. However, it is entirelY"
possible that the drafters of the AAI Act did not intend toi
restrict the coverage of this provision merely to pilots,.
stewardesses, and others engaged in the actual, physicall
transport of people and objects, as DIAL would havei
E liked the Court to believe. Trolleys at airports relate to ai11
transportation- just as they relate to "a single flight or a.
series of flights." [Para 60) [1156-E]
1.13. At the time of amendment when private airlinem
F operators had started functioning and as "air transpor1
service" they included all airline operators, private 011
public and the said industry was included as ar-
enumerated industry. Thus, the "air transport service'
concerns airline operators only. DIAL is not e~gaged ir-
G the business of operating an airline for carryin~
passengers and goods by air through flights. In fact, AA-
is also not involved in this activity and Section 12 of tha
AAI Act which lists out the functions of AAI does no•
include the function of carrying people and good9
through air by flights operated by it. As such, when AA-
H
DELHI INTERNATIONALAIRPORT PVT. LTD. v. 1123
UNION OF INDIA & ORS.
-oes not perform such function then there is no question A
-f transfer of such functions to DIAL. [Paras 62 and 64)
d156-H; 1157-C]
1.14. It is the duty of the authority to provide all air
·ansport services at the airport, and if it is not the duty
8
f the authority to carry passengers and goods by air
'!rough flights, then by the appellants own logic, air
·ansport service must mean more than the mere
iarriage of passengers and goods by air through flights.
it did not, then there would be no reason that "air C
ansport service" would be listed as a "duty of the
•uthority" under Section 12(2). This Section clearly
odlcates that it is the duty of the Authority to provide "air
.ans port service", such duty does not mean that the
dthority provides such services itself. AAI is responsible
"Ider the AAI Act for providing air transport service D
iould not necessarily mean that DIAL also does so.
aras 65 and 66) [1157-E-F]
1.15. In the instant case, under Section 12A of the AAI
-:t all functions were given to DIAL except watch and E
erd function, air traffic service and civil enclaves. From
e provisions of OMDA, it was clear that all functions of
l\I barring reserved activities and all land except certain
1rved out assets were given to DIAL. DIAL admitted that
111 transferred to it all functions except those related to F
itch and ward, air traffic service and civil enclaves,
-ne of which could be considered as "air transport
irvice". That being the case, AAI must have transferred
duty to provide "air transport service" to DIAL and the
1ntral Government must, therefore, be the appropriate G
•vernment for DIAL under the CLRAA and ID Act. [Para
68] [1157-G-H; 1158-A-B]
1.16. Section 10(1) of the CLRAA permits the
opropriate government" to "prohibit employment of
'ltract labour in any process, operation or other work H
1124 SUPREME COURT REPORTS [2011) 13 (ADDL.) S.C.R.
A in any establishment. The Central Government's 26th
July, 2004 notification clearly forbade the "AAI
establishment" from employing trolley retrievers as
contract labour. [Para 69] [1158-D]
1.17. The provision s. 291)(e) makes it clear, the
8
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
C establishments. [Para 72] [1159-C]
1.18. On the one hand, AAI clearly cannot be
considered a lbcal authority as it is charged with
managing airports throughout India. On the other hand,
AAI also cannot be considered an "office or department
D of the Government". The 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
E 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,
F trade or business activity is carried on then it necessarily
follows in the context of the instant case that it is the
Delhi Airports which constitute the establishment of AAI
and in turn the establishment of DIAL. There could be
multiple establishments at the airport. That being the
G case, the Division Bench's assertion that the
establishment of Ml is in turn the establishment of DIAL
must be justified. (Paras 73, 75] (1159-D-G; 1160-B]
1.19. DIAL while performing work on behalf of AAI, it
is not performing work on behalf of AAI establishment.
H Instead·, it is merely working on behalf of its own
DELHI INTERNATIONAL AIRPORT PVT. LTD. v. 1125
UNION OF INDIA & ORS.
establishment. Further, all the independence DIAL does A
have, the AAI Act and OMDA make it clear that AAI
maintains ultimate responsibility for the airport. (Paras78
and 79] [1160-G)
1.20. Noticing that air traffic services and security are B
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. [Para 80) [1161 ·Al
c
1.21. DIAL has been leased out the portion of AAl'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. o
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. (Para 81] (1161-C]
1.22. DIAL falls under AAI establishment. Clause 5.1 E
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, F
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 G
obligations. Critical to this inference is the fact that the
Central Government's 26th July, 2004 notification was
issued before OMDA was signed. (Para 83] [1161-E-G]
1.23. In the impugned judgment, the Division Bench H
1126 SUPREME COURT REPORTS (2011] 13 (ADDL.) S.C.R.
A 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 such private player" must be
B repeated. This interpretation would defeat the rights of
the workers, which are meant to be protected by CLRAA.
The Division Bench correctly observed that the
obligation flowing from the notification under Section
10(1) CLRAA should continue to bind every private player
C that steps into the shoes of AAI. [Para 84) [1162-A-C]
2. The Central Government is the appropriate
government for DIAL for the following reasons -
(i) DIAL could not have entered into a contract
D with AAI without approval of the Central
Government according to the mandate of
Section 12A of the AAI Act. It is abundantly
clear that DIAL functions "under the authority"
of the Central Government;
E (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. DIAL works under the authority of the
Central Government;
F
(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
G "concerns" AAI, if DIAL does not perform its
work properly or adequately, then AAI would
be breaching its statutory obligation and
would be responsible for the consequences.
(iv) AAI is under an obligation to follow the
H
DELHI INTERNATIONAL AIRPORT PVT. LTD. v. 1127
UNION OF INDIA & ORS.
directions of the Central Government and if A
DIAL.'!· has admittedly assumed those
obligations through the OMDA, then DIAL is
presumably also obligated to follow such
directions. A contrary interpretation would
allow AAI to circumvent the Central 8
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 C
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
AAl's obligations, the11 DIAL must also be D
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 E
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.
F
(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 G
extremely unlikely that it would have intended
for AAI to be able to circumvent the Central
Government orders by contracting with
private parties.
H
1128 SUPREME COURT REPORTS [2011] 13 (ADDL.) S.C.R.
A (viii) The privatization of the airports does not mean
that the "appropriate government" cannot be
the Central Government. The definition of
'establishment' in the CLRAA takes in Its fold
purely private undertakings. Concerns about
8 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 transferred all of ltS responsibilities at
c 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 transferred its "air transport
D 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
E
that DIAL was transferred only a portion of
AAl'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
F 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
G (xi) The contention of DIAL that it would not be
bound by the obligation of AAI establisnment
would lead to absurd consequencr.s. The
Division Bench in the impugned judgment has
rightly pointed out that every time a fresh
H agreement is entered into, the entire process
DELHI INTERNATIONAL AIRPORT PVT. LTD. v. 1129
UNION OF INDIA & ORS.
of getting a notification issued by the A
appropriate government in relation to the
same work of 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 B
are meant to be protected by the CLRAA.
(xii) In the impugned judgment, the Division Bench
of the High Ceurt correctly held that the
obligation flowing from the said notification C
under Section 10(1) CLRAA should continue to
bind every private player that steps into the
shoes of AAI. [Para 85] [1162-D-H; 1163-A-H;
1164-A-H; 1165-A-B]
Steel Authority of India Limited & Others etc. etc. v. D
National Union Water Front Workers and Others etc. etc.
(2001) 7 sec 1 - relied on.
3.1. It is clear that the notification dated 26th July,
2004 was equally binding on DIAL under the CLRAA and, E
therefore, DIAL must abolish all contract labour as per the
terms of the notification. [Para 86] [1165-C]
3.2. 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 F
general is clear from the said notification. They are liable
to be regularized as regular employees of DIAL. DIAL
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 G
member of the workers' union alike and inequitable to
leave the current workers jobless so as to make room for
erstwhile workers of DIAL [Para 87] [1165-D-E]
3.3. In view of the peculiar facts and circumstances H
1130 SUPREME COURT REPORTS [2011] 13 (ADDL.) S.C.R.
A 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, DIAL is directed to pay
Rupees five lacs to each of the erstwhile 136 workers of
B 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 work.ers in lieu of their
permanent absorption/reinstatement with DIAL and their
c claim of back wages. This is in full and final settlement
of entire claims of erstwhile 136 workers of DIAL. [Para
88] [1165-G-H; 1166-A]
, Oil and Natural Gas Commission and Anr. vs. Collector
of Central Excise 1992 Suppl. (2) SCC 432; Gammon India
D Ltd. and Ors. v. Union of India (UO/) and Ors. (1974) 1 SCC
596: 1974 (3) SCR 665 - referred to.
Case Law Reference:
1992 Suppl. (2) sec 432 Referred to. Para 7
E
1974 (3) SCR 665 Referred to. Para 14
(2001) 1 sec 1 Relied on. Para 85
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
F 7872 of 2011.
From the Judgment & Order dated 18.12.2009 of the High
Court of Delhi at New Delhi in W.P. {C) No. 139 of 2008.
WITH
G
C.A. Nos. 7873, 7874, 7875, 7876, 7878-79 of 2011.
P.P. Malhotra, ASG, R.F. Nariman, Dr. A.M. Singhvi,
Sudhir Chandra, Chander Udai Singh, Colin Gonsalves, Atul
H Sharma, Saket Singh, Milanka Chaudhary, Sarojanand Jha,
DELHI INTERNATIONAL AIRPORT PVT. LTD. v. 1131
UNION OF INDIA & ORS.
Sunil Fernandes, Atul Sharma, Abhishek Sharma, Lalit Bhasin, A
Nina, Gupta Ratna Dhingra, Mudit Sharma, Bina Gupta, Tariq
Adeed, Alin Mahanta, Divya Jyoti (for Jyoti Mendiratta), Rachna
Joshi lssar Chetan Chawla, Samridhi Sinha (for Shreekant N.
Terdal) for the appearing parties.
B
The Judgment of the Court was delivered by
DALVEER BHANDARI, J. 1. Leave granted in all the
Special Leave Petitions.
2. These appeals emanate from the judgment of the High c
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 }8, 2009.
3. The short question which arises for consideration in
these appeals is whether the Notification dated 26th July, 2004 D
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 E
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 appe'als preferred
before this Court against the following Letters Patent Appeals F
and Writ Petitions decided by the High Court:
(a) Indira Gandhi lntemational Airport TD/ Karamchari
Union v. Union of India and others - LPA No.38
of 2007
G
This Letters Patent Appeal was filed against the judgment
of the learned Single Judge dated 28th November, 2006 in Writ
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 H
1132 SUPREME COURT REPORTS (2011] 13 (ADDL.) S.C.R.
A 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
B 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
C issued.
(b) Union of India v. Indira Gandhi International
Airport TOI Karamchari Union - LPA No.1065 of
2007
D 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.
(c) Airports Authority of India v. Union of India Writ
E Petition (Cl 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.
F
(d) Delhi International Airports P.Ltd. v. Union of
India Writ Petition (Cl No.139 of 2008
DIAL had preferred this writ petition challenging the order
of the Chief Labour Commissioner, Government of India dated
G 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
H
DELHI INTERNATIONAL AIRPORT PVT. LTD. v. 1133
UNION OF INDIA & ORS. (DALVEER BHANDARI, J.]
all documents concerning DIAL were directed to be shifted to A
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. 8
BRIEF FACTS:
6. 136 workers were employed by the contractor Mis. TDI
International Pvt. Ltd. to do the work of trolley retrieving at the
Domestic and at the International Airport at Delhi in the year c
1992. In view of the perennial nature of the work, the workmen
approached the Contract Labour Couit for aboUtion 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 D
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 E
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 F
resolved by the High Powered Committee (HPC). Accordingly,
the matter went to the HPC and the notification was not given
effect to.
8. Meanwhile, 136 workers who were engaged as Trolley G
retrievers by the contractor Mis. TOI International Private Limited
working at the airport since 1992 were removed from service
on 5th December, 2003 as the contract of Mis. TOI International
Private Limited had come to an end and a new contractor
H
1134 SUPREME COURT REPORTS 12011] 13 (ADDL.) S.C.R.
A 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.
B
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
c 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.
10. Indira Gandhi International Airport TOI Karamchari
D 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
E
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
F 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
G December, 2009.
12. The review petition was preferred py the Union of India
which was decided on 12th March, 2010 by the High Court
modifying para 61 of the impugned judgment. Against the
+ H
DELHI INTERNATIONAL AIRPORT PVT. LTD. v. 1135
UNION OF INDIA & ORS. [DALVEER BHANDARI, J.)
impugned judgment of the Division Bench of the High Court, A
two appeals were preferred by DIAL and three by AAI and one
by the Indira Gandhi International Airport TOI Karamchari Union.
In these appeals, two broad issues that arise are:
(a) Who is the appropriate government for DIAL under the B
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 C
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. D
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 E
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
to note that the 1970 Act does not create any machinery or F
forum for the adjudication of any dispute arising between the
contract. labour and ·the ~rincipal 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 G
India (UOI) and Others (1974) 1 sec 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 H
1136 SUPREME COURT REPORTS [2011] 13 (ADDL.) S.C.R.
A 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
B 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 1O of the Act. Section 1O of the Act deals with
c 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."
D 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 government for DIAL
E 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,-
F (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
G [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 SA of the Dock Workers (Regulation
DELHI INTERNATIONAL AIRPORT PVT. LTD. v. 1137
UNION OF INDIA & ORS. [DALVEER BHANDARI, J.]
of Employment) Act, 1948 (9 of 1948), or [the A
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 B
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 c
SA and section SB, 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 D
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 E
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 F
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 G
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 H
'.
1138 SUPREME COURT REPORTS [2011] 13 (ADDL.) S.C.R.
A 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
B 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
•
c 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]
D (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
E Government:
Provided that in case of a dispute between a
contractor and the contract labour employed through
the contractor in any industrial establishment where
F 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;
G
(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,
H
• DELHI INTERNATIONAL AIRPORT PVT. LTD. v. 1139
UNION OF INDIA & ORS. [DALVEER BHANDARI, J.]
(ii) in the case of weekly paid workman, in the four A
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 B
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 C
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 D
Government. Secondly, the Central Government is ttfe
"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 E
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.
F
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. G
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 H
1140 SUPREME COURT REPORTS (2011) 13 (ADDL.) S.C.R.
A that in relation to DIAL there has to be a separate Section 1O
(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 notification.
8 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
C that of Mi'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
D 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
E 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
F 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
G 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
H
DELHI INTERNATIONAL AIRPORT PVT. LTD. v. 1141
UNION OF INDIA & ORS. [DALVEER BHANDARI, J.]
operating under the authority of the Central Government. The A
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 'Ml Act'). It was
submitted that DIAL is rendering "air transport service"
including emplaning and deplaning of passengers, handling of B
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) CLRM is valid and binding on it The Division C
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 D
'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 E
interpretation would run counter to the scheme of CLRM and
would defeat its object and purpose.·
22. The Division Bench also held that it is inconceivable
by virtue of Section 12A of the Ml Act, that only the functions F
and powers of Ml 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 Ml and
its contractors also get transferred to CLRM. This transfers
all powers and functions and correspondingly the obligations G
under CLRM by virtue of Section 12A of the Ml Act.
23. The· Division Bench held that:
•... .In fact OMDA makes ar:i express reference to the Ml
H
1142 SUPREME COURT REPORTS (2011] 13 (ADDL.) S.C.R.
A 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
B 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
c 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
D 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
E 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 Ml Act, there could
not have been an OMDA between AAI and DIAL."
F
24. After examining the settled legal principles, the Division
Bench held that irrespective of whether the amendment to
Section 2(a) l.D. Act was later, the appropriate government for
the purposes of Section 10 CLRAA in the instant case
G · 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 :
H 2(i) "civil enclave" means the area, if any, allotted at an
DELHI INTERNATIONAL AIRPORT PVT. LTD. v. 1143
UNION OF INDIA & ORS. [DALVEER BHANDARI, J.]
airport belonging to any armed force of the Union, for use A
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."
B
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 C
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 civil enclaves
remain with AAI, notwithstanding that it has entered into an
agreement of OMDA with DIAL. D
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 E
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 F
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 G
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
H
1144 SUPREME COURT REPORTS [2011] 13 (ADDL.) S.C.R.
A 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
B 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.
C That was never the intention of the legislature in enacting
CLRAA and in particular Section 1O 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
D following conclusions: ·
(i) That in relation to airport, it is the Central
Government which is the appropriate government
for the purpose of CLRAA;
E
(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:
F
"Notwithstanding anything cohtained 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
G 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
H CLRAA is inapplicable to DIAL. First, DIAL claims that the
DELHI INTERNATIONAL AIRPORT PVT. LTD. v. 1145
UNION OF INDIA & ORS. [DALVEER BHANDARI, J.]
Central Government is not the appropriate government to issue A
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 ~pplicable to DIAL establishment, a B
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"
c
CLRAA Section 2(1) reads as follows:
(1) In this Act, unless the context otherwise
requires,-
(a) "appropriate government" means,- D
(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; E
(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 F
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 G
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
H
1146 SUPREME COURT REPORTS [2011) 13 (ADDL.) S.C.R.
A to analyse this provision. Section 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
B
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
c concerning AAI.
(iii) The Central Government is the "appropriate
government" in relation to industrial dispute
concerning air transport service.
D 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 cari be said to concern air
E 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
F 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 airports and for matters connected therewith
G 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:
DELHI INTERNATIONAL AIRPORT PVT. LTD. v. 1147
UNION OF INDIA & ORS. [DALVEER BHANDARI, J.]
"air transport service" means any service, or any kind of A
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;
B
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 C
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;
D
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. E
(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 F
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 G
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
H
1148 SUPREME COURT REPORTS [2011] 13 (ADDL.) S.C.R.
A 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.
B 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 AAl's authority is
carried on under the authority of the Central Government.
•
c 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 th,e Central Government is the "appropriate
D authority" for DIAL?
40. ln the impugned judgment, the Division Bench has
clearly held that AAI works "under the authority" of the Central
Government.
E
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
F
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.
G
2. Considering the need for heavy investments and
operational flexibility requ'ired for construction and
management of large airports, the International Airports
Authority of India (IAAI) was constituted as an autonomous
. '
H
I
DELHI INTERNATIONAL AIRPORT PVT LTD. v. 1149
UNION OF INDIA & ORS. [DALVEER BHANDARI, J.]
body under the International Airports Authority Act, 1971. A
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 air traffic control and related B
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 C
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 D
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. E
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 F
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 G
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 H
1150 SUPREME COURT REPORTS [2011] 13 (ADDL.) S.C.R.
A 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 National
Airports Authority to continue to be operative in relation to
B
the Airports Authority of India.
(e) Every officer or other employee of the
International Airports Authority of India and the National
Airports Authority, serviQg in its employment immediately
c 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
D 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 Ml Act
E 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 (Mi's) functions
have been leased out to DIAL. This has been done under
F Section 12A(2) with the previous approval of the Central
Government. On proper scrutiny of the provisions of the Ml Act,
it is abundantly clear that the Central Government has control
over Ml and Ml has control over DIAL.
43. DIAL claims that if Mi's industry was being carried
G 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 Ml 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
DELHI INTERNATIONAL AIRPORT PVT. LTD. v. 1151
UNiON OF INDIA & ORS. [DALVEER BHANDARI, J.]
has admitted that all these industries, en a cursory look, seem A
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 ti1e authors of the ID Act, in listing the B
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 c
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.
44. The crucial questions which need our adjudication are:
whether DIAL works under the Central Government and whether D
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' E
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 AAl's functions (in the public interest or in the interest
of better management of airports). It was this proviso which F
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 AAl's industry was being carried
out under the authority of the Central Government under Section G
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 Dlft..L is correct.
On the other hand, however, such reasoning would seem to
H
1152 SUPREME .COURT REPORTS [2011] 13 (ADDL.) S.C.R.
A 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
B 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
c 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:
D
"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."
E
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 :
F •... .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)
G
49. If the passage from SA/L'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.
H
DELHI INTERNATIONAL AIRPORT PVT. LTD. v. 1153
UNION OF INDIA & ORS. [DALVEER BHANDARI, J.]
50. In the impugned judgment, the Division Bench correctly A
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 Gov~rnment
on AAI. AAI has to obtain approval from the Central
Government before delegating any of its functions to third 8
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
reservations of authority. The Central Government retains its
statutory control over AAI. In the impugned judgment, the High C
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 D
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 E
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 companyrundertaking. To put it differently, if
there is lack of conferment of power or permission by the F
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 G
not be able to carry out functions at the Delhi airports. 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 :
H
1154 SUPREME COURT REPORTS [2011] 13 (ADDL.) S.C.R.
A "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
B created, no further que.stion 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
c 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
D 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
E case."
54. In the facts and circumstances of these cases, it is
abundantly clear that DIAL operates under the authority of the
Central Government.
F 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
G 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
H of the Central Government".
DELHI INTERNATIONALAIRPORT PVT. LTD. v. 1155
UNION OF INDIA & ORS. [DALVEER BHANDARI, J.)
56. It was argued on behalf of DIAL that "if the intent of the A
Parliament was to make DIAL co(lle 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 B
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 c
in the Act.
57. In case AAI and DIAL act under the authority of different
governments it would bring about absu!d results : AAI could
simply circumvent potential Central Government orders by
delegating various functions to third parties, such as DIAL. Of D
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 AAl's
actions, while allowing actions performed by other entities on E
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 F
conclusion.
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 G
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 H
1156 SUPREME COURT REPORTS [2011) 13 (ADDL.) S.C.R.
A 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
B 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.
C 59. Under the ID Act (and therefore CLRAA), the third
situation in which the Central Government is the "appropriate
Government" is "in relation to indusftial disputes concerning air
transport services."
60. The question for the purposes of this case, then, is
D 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
E 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."
F 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.
G
62. At the time of amendment when private airline
operators had started functioning and as "air transport service"
they included all airline operators, private or public and the said
industry was included as an enumerated industry. This makes
H
DELHI INTERNATIONAL AIRPORT PVT. LTD. v. 1157
UNION OF INDIA & ORS. [DALVEER BHANDARI, J.]
it abundantly clear that "air transport service" concerns airline A
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 B
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 c
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. D
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 through E
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. F
66. AA! 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 G
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. H
1158 SUPREME COURT REPORTS [2011] 13 (ADDL.) S.C.R.
A 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 and
B 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
C 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
D 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?
E 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 't2A of the AAI Act. In support
F of this ciaim, 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
July, 2004 notification, even if otherwise valid, did not apply.
The Single Bench apparently agreed, holding that
G
"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.
H
DELHI INTERNATIONAL AIRPORT PVT. LTD. v. 1159
UNION OF INDIA & ORS. [DALVEER BHANDARI, J.]
71. To address these claims, it is important to analyse the A
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 B
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
c
"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.
D
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 AAI Act makes
clear that AAI must, in certain circumstances, obtain approval E
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 F
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 G
in turn the establishment of DIAL.
74. This Court in SA/L's case held as under:
"It is thus evident that there can be plurality of
establishments in regard to the Government or local H
1160 SUPREME COURT REPORTS [2011] 13 (ADDL.) S.C.R.
A 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 estal>fishments at
8 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.
76. It would be pertinent to refer to the definition of
"contractor" in Section 2(1 )(c) of CLRAA, which reads as under:
c
"'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
D contract Jabour or who supplies contract labour for any
work of the establishment and includes a sub-contractor."
77. DIAL "undertakes to produce a given resulr - trolley
retrieval services; among other things - for AAI establishment
E 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
F 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.
G 79. Further, all the independence DIAL does have, the AAI
Act and OMDA make it clear that AAI maintains ultimate
responsibility for the airport.
80. The question that has to be answered Is who has
H
DELHI INTERNATIONAL AIRPORT PVT. LTD. v. 1161
UNION OF INDIA & ORS. [DALVEER BHANDARI, J.)
control of the entire establishment? Noticing that air traffic A
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. B
81. Admittedly, DIAL has been leased out the portion .of
AAl'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 C
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 D
to it. In SA/L's case, the Constitution Bench explicitly held that
the definition of "establishment" in the CLRAA takes in its fold
purely private undertakings.
83. This issue is fully settled by the foregoing analysis. From
the analysis, DIAL falls under AAI establishment. For example, E
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 F
claims, separate establishments. If AAI establi.shment 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 G
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
H
1162 SUPREME COURT REPORTS [2011) 13 (ADDL.) S.C.R.
A 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
B work of trolley retrieval and with the same establishment vis-a-
vis 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 frorn the notification under
C 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
D 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
E
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
F 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
G 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 breaching its statutory obligation
and would be responsible for the consequences.
H
DELHI INTERNATIONAL AIRPORT PVT. LTD. v. 1163
UNION OF INDIA & ORS. [DALVEER BHANDARI, J.]
(iv) AAI is under an obligation to follow the directions A
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 B
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 c
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 AAl's obligations, then
DIAL must also be obligated to follow the D
notification. In other words, the notification issued
by the Central Government is equally binding on
DIAL.
(vi) Holding the 26th July, 2004 notification inapplicable E
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 F
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 G
Central Government orders by contracting with
private parties.
(viii) The privatization of the airports does not mean that
the "appropriate government" cannot be the Central H
~- ' .
1164 SUPREME COURT REPORTS [2011] 13 (ADDL.) S.C.R.
A 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.
B
(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 tl1at AAI has
transferred all of its responsibilities at the airpotts
with the exception of certain reserved functions.
c 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
D 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 AAl's work
E 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
F 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
G 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 trolley retrieval and with the same
H
DELHI INTERNATIONAL AIRPORT PVT. LTD. v. 1165
UNION OF INDIA & ORS. [DALVEER BHANDARI, J.]
establishment via-a-vis such private player must bji A-
repeated. But this interpretation would defeat the
rights of the \('/Orkmen which are meant to be
protected by the CLRAA.
(xii) In the impugned judgment, the Division Bench of the B
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 C
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 D
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 OIAL. DIAL has replaced many of the workers E
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
inequitable to leave the current workers jobless so as to make
room for erstwhile workers of DIAL.
F
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 G
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 H
1166 SUPREME COURT REPORTS [2011] 13 (ADDL.) S.C.R.
A 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
8
the prescribed period, then it would carry interest at the rate of
12% per month from that point till the amount is paid.
90. These appeals are accordingly disposed of in the
aforementioned terms. In the facts and circumstances of these
C cases, we direct the parties to bear their own costs.
N.J. Appeals disposed of.
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