IN THE HIGH COURT OF DELHI AT NEW DELHI SUBJECT : SERVICE MATTER. Order Reserved on: Date of Decision: November 28, 2006

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1 IN THE HIGH COURT OF DELHI AT NEW DELHI SUBJECT : SERVICE MATTER Order Reserved on: Date of Decision: November 28, 2006 WP(C) No.15156/2006 Indira Gandhi Airport, T.D.I. Karamchari Union Petitioner Through: Mr. Colin Gansalves Sr. Advocate with Mr. Mr. Vipin Mathew Benjamin, Advocates VERSUS Union of India & Ors.... Respondents Through: Mr. Atul Sharma, Mr. Harjinder Singh SHIV NARAYAN DHINGRA, J 1. By this writ petition, the petitioner union made following prayers: a. Issue appropriate writ in the nature of mandamus or any other writ, direction or order directing the Respondents No.2 to forthwith take on duty the workers previously engaged in trolley retrieval system as mentioned in Annexure P-1, at the Delhi Airports as permanent workers and pay full wages. b. Issue appropriate writ in the nature of mandamus or any other writ, direction or order directing the respondents No.2 to abolish the Contract Labour system in the trolley retrieval system at the Delhi Airports as per notification dated of respondent No.1. c. pass an order or direction restraining the Respondents from engaging any new worker for trolley retrieval after the present contract expire or from extending the contracts without giving the workers herein preference at Delhi airports. 2. The relevant facts in brief are that the respondent No.2, before privatization of the airports, had engaged contractor M/s TDI International for the work of trolley retrieval at the Airport and TDI International had engaged several persons for this work as its employees. The Government issued a notification dated , prohibiting the contract labour for the work of trolley retrieval in the establishment of Airport Authority of India(AAI) at international airport and domestic airport with effect from The members of the present union, were employees engaged by TDI International. The contract of TDI International was terminated on 30th November, 2003 due to non renewal. In an open public tender, the contract was bagged by the new contractor M/s

2 Sindhu Holdings Pvt. Ltd. and the new contractor employed different labours and the labour employed by TDI International, thus became jobless. The contract of new contractor M/s Sindhu Holdings Pvt. Ltd. is going to expire on 30th November, 2006, after expiry of its duration of three years. This writ petition has been made in view of the fact that the old contract is going to expire and a new contract may be entered into, with the above prayers. 3. The AAI, the respondent No.2, had challenged the notification dated before this Court and this Court vide order dated disposed of the writ petition, directing the AAI to appear before the High Power Committee who was to consider the grievance of the parties and pass an appropriate order recommending whether the AAI was permitted to challenge the notification or not, in terms of the spirit of the order, passed by the Supreme Court in ONGC and Ors vs. Collector, Central Excise 1995 Suppl. 4 SCC 541 and MTNL vs. Central Board of Director Taxes SCC 431. The committee held its meetings where the union representatives, representatives of AAI and Joint Secretaries, Under Secretaries of Government of India and Cabinet Secretaries were present. The record of meeting dated has been placed on record and following observations of the Committee are noteworthy: 11. The Committee has also noted the factual position that the restructuring of Delhi(and Mumbai) airport is under active consideration of the Govt. of India. Already Kochi airport in the private sector is functional and Govt. has also granted approval for airport in the private sector at Hyderabad and also recently granted approval for airport in the private sector at Bangalore. Public-private participation in the ownership or management of Delhi( and Mumbai) airport is under consideration. Nevertheless, the Contract Labour (Regulation and Abolition)Act, 1970 is equally applicable for all kinds of undertakings, establishments/industries whether in the public, private or public/private ownership or management. In this context it is again necessary to refer to Section 10(2)(c) of the Act which does not appear to have been adequately examined by the Ministry of Labour before the issue of the notification in question. 12. Taking into account the oral and written submissions by all the three parties and the totality of all the circumstances, the Committed is of the view that it would be appropriate if the Ministry of Labour would consider keeping the implementation of the notification in abeyance and re-examine the whole matter and further also keeping in view the submissions made in its own note annexed with its OM dated that the interest of workmen may not be safeguarded and there is also a possibility that the workers who work/are engaged by contractor(s) may altogether loose their work if AAI does not recruit additional labour and therefore, does not have to absorb the workmen engaged by the contractor(s). Keeping in view the settlement that the Board has been successful in arriving at in three cases referred to in Para 5 of the note by Ministry of Labour, the Ministry/CACLB may look into the terms and conditions of employment of workmen by the contractor(s) engaged in the job of trolley retrieval. This should inter alia include ensuring payment of minimum wages, PF, ESI and other statutory dues/facilities in accordance with the labour laws by the contractor. As the number of flights and accordingly number of air passengers is increasing, there is bound to be requirement of

3 more trolleys and therefore, increase in the work of trolley retrieval. The Committee, therefore, recommends and requests Ministry of Labour through its agencies to keep the interest of the workmen engaged by the earlier contractor M/s TDI International in view and ensure to the maximum extent possible for this large number of workmen who had worked for a number of years with the earlier contractor are also provided work either by the new contractor by engaging their services with the increase in the workload or engaging more than one contractor at the same airport or separately for international and domestic airports in a manner that the workers who were earlier engaged by M/s TDI International up to midnight of and whose services were not engaged by the new contractor M/s Sindhu Holdings Ltd. are engaged by the contractor(s). The Committee requests that while keeping the implementation of the notification in question in abeyance, the Ministry of Labour in consultation with the Ministry of Civil Aviation/AAI should further the matter within a period of six months. The Ministry of Labour may consider its request/recommendations of the Committee within four weeks and convey its acceptance or otherwise of the same to the Secretariat. In the event of the Ministry of Labour not being in a position to accept the recommendations/request of the Committee, the Committee have no other option but to give clearance to AAI to challenge the notification before the Hon'ble Court(s). 4. However, the airport at Delhi, has been recently privatized and with the privatization of the I.G.I Airport, the trolley retrieval and management of the airport is no more the responsibility of AAI. It is being done by the Delhi International Airport Private Limited, a private limited company, joint venture, which bagged the contract. The contractor, who was earlier assigned the work of retrieval of trolley, continued with the new management uptill the expiry of the contract in view of the agreement entered into between AAI and the Delhi International Airport Pvt. Ltd. However, this contract is since coming to an end, the new management is bound to enter into a new contract for trolley retrieval. 5. It is submitted by learned counsel for the petitioner that since the new contract is going to be entered into, the erstwhile labour engaged by TDI International, should now be engaged by the AAI as permanent employees and directions be given to AAI to engage them as permanent workers of AAI and pay them full wages. Learned counsel also submitted that a mandamus should be issued by this Court to abolish the contract labour system in trolley retrieval system at Delhi Airport in terms of notification dated and the respondent No.5 should be restrained from engaging any new contractor for trolley retrieval after the present contract expires. Learned counsel for the petitioner,during arguments, drew attention of this Court to the judgment in Steel Authority of India Limited v. National Union Waterfront Workers (2001) 7 SCC 1, wherein the Supreme Court held as under: If we may say so, the eloquence of the CLRA Act in not spelling out the consequence of abolition of contact labour system, discerned in the light of various reports of the Commissions and the Committees and the Statement of Objects and Reasons of the Act, appears to be that parliament intended to create a bar on engaging contact labour in the establishment covered by the prohibition notification, by a principal employer so as to leave no option with him except to employ the workers as regular employees directly. Section 10 is intended to work as a permanent solution to the problem rather than to

4 provide a one-time measure by departmentalizing the existing contract labour who may, by a fortuitous circumstances be in a given establishment for a very short time as on the date of the prohibition notification. It could as well be that a contractor and his contract labour who were with an establishment for a number of years were changed just before the issuance of prohibition notification. In such a case there could be no justification to prefer the contract labour engaged on the relevant date over the contract labour employed for a longer period earlier. These may be some of the reasons as to why no specific provision is made for automatic absorption of contract labour in the CLRA Act.(para 88) 6. Learned counsel for the petitioner argued that the erstwhile employees of TDI International had worked for a period from 7 to 15 years and that about 8 months before the notification dated , the contractor was changed. So, the earlier employees of TDI International i.e. the members of the petitioner's union, should be the beneficiary of the notification and not the employees of a new contractor in view of above observation of the Supreme Court. He also drew my attention to para 125(6) Steel Authority of India's case, which reads as under:- If the contract is found to be genuine and prohibition notification under Section 10(1) of the CLRA Act in respect of the establishment concerned has been issued by the appropriate Government, prohibiting employment of contract labour in any process, operation or other work of any establishment and where in such process, operation or other work of the establishment the principal employer intends to employ regular workmen, he shall given preference to the erstwhile contract labour, if otherwise found suitable and, if necessary, by relaxing the condition as to maximum age appropriately, taking into consideration the age of the workers at the time of their initial employment by the contractor and also relaxing the condition as to academic qualifications other than technical qualifications. (Para 125(6)) 7. Learned counsel for the petitioner argued that since the contract with the new contractor is going to expire and the notification dated has not been set aside by this Court and is still in operation, no new contractor can be employed by the respondent No.2 to do the work of trolley retrieval and the respondent No.2 is obliged to engage regular workmen. Therefore, the members of the petitioner union should be engaged as the regular workmen instead of the employees of the new contractor. 8. Learned counsel for the petitioner also argued that the respondent No.5, i.e new management of the airport, was the successor in interest of AAI, in view of the agreement entered into between the AAI and Delhi International Airport Pvt. Ltd on He drew my attention to the various clauses of the agreement to press following points: (i)the work of retrieval of trolleys was an essential service to be provided by the respondent No.2 to the passengers free of cost; (ii) AAI was to provide a list of contracts and agreements between AAI and any third party as relatable to the airport proposed to be transferred to JVC pursuant to the agreement;

5 (iii) that the respondent NO.5 was to engage in complete and incorporated possession and control of airport site and the existing assets; for the purpose of providing aeronautical services and non aeronautical services; (iv)aai had indemnified JVC its agent, employees in relation to legacy matters up to the effected date(date of starting of the agreement) including the liabilities that may be identified subsequently and the respondent No.5 was given responsibility of improving the services already existing. 9. It is argued by the learned counsel for the petitioner that in order to protect the interest of the petitioner workmen, it was necessary that this Court should intervene and in view of the notification dated , this Court should give directions for absorption of the union members of the petitioner as permanent employees of the respondent No.2 AAI. 10. Learned counsel for the respondent No.2 argued that the respondent No.2 had divested itself of the management of the airport. The work of trolley retrieval was not being looked after by the respondent No.2 and the entire management of the airport has been taken over by the respondent No.5 in terms of the agreement dated There were no posts of trolley retrieval persons available under the respondent No.2, neither there was any possibility of creation of any such posts because this work has already been taken over by the respondent No.5. The notification dated does not call upon the respondent No.2 to create posts, neither this Court can call upon the respondent No.2 to create posts for which there is no requirement of the respondent No.2. She further submitted that all major airports are being privatized and the respondent No.2 would not be requiring services of trolley retrieval persons at any such airport because of privatization. Moreover, the notification was only in respect of International Airports and Domestic Airport at Delhi and not in respect of the other airports. The respondent No.2, therefore, has no posts of such employee and has no scope of employing permanent employees for trolley retrieval. 11. Learned counsel for the respondent No.5 argued that the respondent No.5 was neither a State nor the instrumentality of State and was not amenable to writ jurisdiction. The constitution of joint venture would show that the government shares in the joint venture were only 26% and rest of the shares were held by either Indian Companies or foreign companies. He further submitted that as per the memorandum of agreement entered into between the AAI and the respondent No.5, even the general employees cannot be regarded as the employees of respondent No.5. During operation support period, the respondent No.5 has to take only 60% of the general/regular employees of AAI who resigned from AAI and opt to join the respondent No.5 as fresh recruits. There was no obligation thrust upon the respondent No.5 in terms of the agreement of appointing the contractor's employees as the regular employees. The notification dated was not applicable to the respondent No.5 since it has not been issued in respect to the respondent No.5. The appropriate Government in respect of the respondent No.5 shall be the Government of NCT and not the Central Government since the respondent No.5 is not a company working under _he directions or control of the Central

6 Government. It was further submitted that the writ petition was not maintainable in view of the judgment in Steel Authority of India's case, wherein it has been ruled by the Supreme Court that in case where a notification, prohibiting the engagement of contract labour is issued, such contract labours are not entitled to automatic absorption in the services of the principal employer. 12. It is further submitted that the petitioner's union has raised an industrial dispute, which was pending adjudication before the Industrial Tribunal, Delhi under Section 10 of the Industrial Disputes Act, claiming that contract entered into between the respondent No.6 and the respondent No.2 was sham and camouflage and they should be regularized as permanent workmen of AAI. The petitioner cannot take a totally contradictory stand that they were the employees of the respondent No.2 and they should be directed to be absorbed by the respondent No.2 or by the respondent No It is undisputed that the petitioner union had raised an industrial dispute which is pending adjudication before the industrial adjudicator in respect of declaring the contract between the respondent No.6 and the respondent No.2 as sham and camouflage. The petitioner had claimed themselves to be the employees of the contractor in that claim and asked for their absorption on the ground of contract being sham. In the present writ petition, the petitioners have sought absorption by the respondent No.2 on the ground that the trolley retrieval work has been prohibited by the notification. The judgment relied upon by the petitioner's counsel i.e. Steel Authority of India's case(supra), does not help the petitioner in any manner. Para 125(6) of the above judgment, reproduced above, provides that after the prohibition of notification, as and when permanent employees are employed by the employer, the employer shall give preference to the employees of the erstwhile contractor and shall give necessary relaxation in age etc, considering the period of length for which the employee had worked. It is not ruled in Steel Authority of India's case, that on notification prohibiting the contract labour coming into force the principal employer has to absorb each and every employee as its regular employee. Such contention was turned down by the Supreme Court. The petitioner, therefore, could not have filed this writ petition seeking such relief even if there had been no privatization of the airports. However, the scenario has altogether changed. The respondent No.2 has been divested of the management of the airport and now the respondent No.5 a JVC, has taken over the management of airports. The notification, which was issued by the Government on , has not been extended to the joint venture i.e. respondent No.5. In order to prohibit engagement of contract labour by the respondent No.5 in trolley retrieval system, the appropriate Government would now have to issue fresh notification for prohibiting the contract labour system in trolley retrieval. Unless, a fresh notification is issued, the respondent No.5 would not be bound by the earlier notification. The plea of the petitioner that the respondent No.5 was successor in interest of the respondent No.2, is also of no help to the petitioner. The Respondent No.2 has not given over all its functions to the respondent No.5 and has not been wound up. The respondent No.2 has retained some functions with it and handed over the functions as enumerated in the agreement (MoU) to the respondent No.5. The liability of the respondent No.5 in respect of the employees of the respondent No.2 is restricted to the agreement as entered into between the parties on Although the trolley retrieval work has been shown

7 as the essential function but the petitioner has failed to show any clause by which the liability has been foisted on the respondent No.5 to take the earlier contractor's employees as its own employees. The clauses pointed out by the petitioner regarding succession of liability is in _espect of financial liability or legal liability incurred by AAI about which, the respondent NO.5 has been indemnified. The agreement does not thrust upon any obligation of dismissed/terminated employees or the contractor employees upon the respondent No My attention has also been drawn to the proceedings of the Committee as mentioned above. I consider that the notification itself has become irrelevant in view of the privatization of the airports and a new notification will have to be issued by the appropriate Government. The meetings held by the Committee are prior to the situation, when airports had not been privatized but the process of privatization was on the way. The Committee has taken note of this fact and has also observed that the situation has changed. Under the changed scenario, the notification dated would not be applicable to respondent No In view of the foregoing discussion, I find no force in the writ petition. The same is hereby dismissed. No orders as to costs. November 28, 2006 Sd./- SHIV NARAYAN DHINGRA,J