Full Judgment Text
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO.1606 OF 2013
Air India Employees' Union,
a trade union registered under the
Trade Union Act, 1926 having
registration No.4251, having office at
5/9, Air India Colony, Kalina, Santacruz (E),
Mumbai400029. ...Petitioner.
vs.
1) Air India Limited,
Nariman Point, Mumbai400 021.
2) Union of India,
Through Ministry of Labour (Civil Aviation),
Aayakar Bhavan, Mumbai 400023. ...Respondents.
ALONGWITH
WRIT PETITION NO. 419 of 2013
Air India Aircraft Engineers' Association,
Old Airport, Santacruz (East),
Mumbai 400029. ...Petitioner
vs.
1) Air India Limited,
Air India Building, Nariman Point,
Mumbai400 021.
2) Air India Engineering Services Limited, 113,
Gurudwara Rakabgani Road,
Air Lines House, New Delhi 110001.
3) The Union of India,
Through Aayakar Bhavan,
New Marine Lines,
Mumbai 400020. ...Respondents.
ALONGWITH
WRIT PETITION NO.1088 OF 2013
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Indian Commercial Pilot's Association,
Air India Operations Bldg. Gr. Floor,
Domestic Airport,Vile Parle (East),
Mumbai 400029. ...Petitioner
vs.
1) Air India Limited,
Air India Building, Nariman Point,
Mumbai400 021.
2) Union of India,
Through Aayakar Bhavan,
New Marine Lines,
Mumbai 400020. ...Respondents.
ALONGWITH
WRIT PETITION NO. 331 of 2013
Indian Pilots' Guild,
Swithin House, Flat B31C,
St. Anthony Road, Vakola,
Santacruz (E),
Mumbai 400055. ...Petitioner.
vs.
1) Air India Limited,
Air India Building, Nariman Point,
Mumbai400 021.
2) The Union of India,
Through Aayakar Bhavan,
New Marine Lines,
Mumbai 400020. ...Respondents.
ALONGWITH
WRIT PETITION (L) NO. 277 OF 2013
Air India Service Engineers Association,
A Trade Union duly registered
Under the Trade Unions Act, 1926,
having its office at, 26 “Ram Niwas”, Teli Galli,
Cross Lane, Andheri (E), Mumbai 400 069. ...Petitioner
vs.
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1) Air India Limited,
Air India Building, Nariman Point, Mumbai400 021.
2) Union of India,
Through Ministry of Labour
Civil Aviation, Aayakar Bhavan,
Mumbai 400 023. ...Respondents.
ALONGWITH
WRIT PETITION NO. 1168 OF 2013
Air India Aircraft Engineers Association,
being A Trade Union registered
under the provisions of the Trade Unions Act, 1926,
and having its office at PSU Bldg. 1st floor,
New Terminal Bldg. Area, Mumbai Airport,
Vile Parle (East), Mumbai 400 099. ...Petitioner
vs.
1) Air India Limited,
Air India Building, Nariman Point,
Mumbai400 021.
2) Air India Engineering Services Ltd.,
113, Gurudwara, Rakabganj Road,
Airlines House, New Delhi 110 001.
3) The Union of India,
Through Aayakar Bhavan,
New Marine, Mumbai 400 020. ...Respondents.
ALONGWITH
WRIT PETITION NO. 1805 OF 2012
1) Aviation Industry Employees Guild,
Old Airport, Santacruz (East),
Mumbai 400 020.
2) Air India 25 years Employees and retirees club,
Old Airport, Santyacruz (East), Mumbai 400 029. ...Petitioners.
vs.
1) Air India Limited,
Earlier known as National Avitation
Co. of India Limited, Air India Building,
Nariman Point, Mumbai400 021.
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2) Union of India,
Through Ministry of Labour
Civil Aviation, Aayakar Bhavan, Mumbai 400 023.
...Respondents.
ALONGWITH
WRIT PETITION (L)NO.2677 OF 2013
1) All India Cabin Crew Association,
(AICCA), a trade union registered under
the Trade Unions Act, 1926,
having its office at Room No.107/108,
st
1 floor, In flight Service Bldg.,
Medicon Bhavan, NITC Sahar,
Andheri (E), Mumbai 400 099.
2) Sanjay Lazar,
General Secretary, All India Cabin Crew Association,
st
at Room No.107/108,1 floor, In flight Service Bldg.,
Medicon Bhavan, NITC Sahar,
Andheri (E), Mumbai 400 099.
3) Sagar Karnik,
Assistant Treasurer,
All India Cabin Crew Association,
st
at Room No.107/108,1 floor, In flight Service Bldg.,
Medicon Bhavan, NITC Sahar,
Andheri (E), Mumbai 400 099. ...Petitioners.
vs.
1) Union of India,
Through Ministry of Civil Aviation,
through the office of the Ministry of Law,
Aayakar Bhavan, M.K.Road, Churchgate,
Mumbai 400020.
2) Air India Limited,
Earlier known as National Aviation
Co. of India Limited, Air India Building,
Nariman Point, Mumbai400 021. ...Respondents.
Mr. Anand Grover, Sr. Advocate with Ms. Firdos Moosa with Mr.
Prakash Mahadik for the Petitioners in W. P. No.1606/2013.
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Mr. Kevic Setalwad with Mrs. S.V. Bharucha and Mr. A.R.Verma for
Respondent No.2UOI in W.P .No.1606/2013, W.P. No.331/2013 and
W.P. No.419/2013.
Mr. R.A.Dada, Senior Advocate with Ms. Jyoti Sinha instructed by M/s.
Nehgandhi, Shah and Hidayatullah for the Petitioners in W.P.
No.1088/2013.
Mr. J.P .Cama, Senior Advocate with Mr. Ashok D. Shetty and Ms. Rita
Joshi for the Petitioners in W.P .No.1805/2012.
Ms. Jane Cox with Rajmohan A. Amonkar, Manmohan A. Amonkar and
Benner D'souza for the Petitioners in W. P. No.419/2013, W.P. No.
331/2013 and W.P. No.1168/2013.
Mr. Kevic Setalwad, A.S.G. with Mrs. S.V. Bharucha, Mr. N. D.Sharma,
Mr. A.R.Verma, Mr. H.V. Mehta and Mr. Parag Vyas for RespondentUOI
in W.P. No.1168/2013.
Mr. A.S. Peerzada for the Petitioner in Writ Petition(L) No.277/2013.
Mr. H.V. Mehta with Mr. A.R. Verma and Mr. Advait Sethna for
Respondent Union of India in W.P. No.331 of 2013 & W.P .No.277/2013.
Mr. Kevic Setalvad, Addl. Solicitor General with Mr. P.M. Shah for
Respondent Nos. 1 to 3 in W.P. No.2699/2012.
Mr. Kevic Setalwad, A.S.G. along with Mr. N.D.Sharma for Respondent
UOI in MMW No.540/2013 in W.P.1088/2013.
Mr. Kevic Setalvad, Addl. Solicitor General, Ms. S.V. Bharucha, Advait
Sethna and Ashok Verma for the Union of India in W. P. No.277/2013..
Mr. Girish Kulkarni, Sr. Advocate along with Mr. Anupam Surve, Mr.
S.D. Shetty and Ms. Kavita Anchan i/by M.V. Kini & Co. for Air India
Respondent No.1.
Mr. C.J. Joveson i/by K.P. Anilkumar for Petitioner in WP(St.)
No.2677/2013.
Mr. Parag Vyas with H.P. Chaturvedi for Respondent Union of India in
WP(st.) No.2677/2013.
CORAM : MOHIT S. SHAH, C.J. AND
M.S. SANKLECHA, J.
Reserved on : 30 November 2013
Pronounced on: 27 January 2014.
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JUDGMENT: (Per M. S. SANKLECHA, J.) :
1) These petitions are fallout of a merger of Indian Airlines
Limited and Air India Limited which was done to make the national
carrier more competitive and profitable in the context of open sky
policy of the Government of India. This amalgamation gave rise to
various issues relating to compensation, harmonization and
rationalization of the wages/salaries of the employees coming into
amalgamated company from the amalgamating companies. To achieve
the above object, an expert committee was appointed to decide and
suggest the measures to integrate the employees of the two merged
entities including bringing about pay parity between them. The report
of the expert committee viz. Justice Dharmadhikari Committee report
has been accepted and is being implemented by the merged entity
namely Air India Limited. These petitions have been filed challenging
the implementation of Justice Dharmadhikari Committee report on
various grounds including non observance of the procedure prescribed
under the law to bring about any change in service conditions of the
employees/workmen of the merged entity viz. Air India Limited.
2) Writ Petition No.2699 of 2012 filed by Air India Office
Association v/s. Union of India and Writ Petition No.2600 of 2013 by
Sohel Masood v/s. Union of India were also a part of the present group
of the petitions. However, these two petitions were detagged from this
group as they have been filed by the Officers of Air India Limited.
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3) This group of petitions has been filed by the workmen as
defined under the Industrial Disputes Act, 1947 (the I. D. Act) against
the Union of India and Air India Limited. Therefore, the two petitions
filed by officers would be dealt with separately as different
considerations would apply.
4) The above group of petitions being disposed of by this
order can be broadly classified into two categories:
(a) Writ Petition (L) Nos.277 of 2013, Writ Petition No.419 of
2013 and Writ Petition No.216 of 2013 have been filed by different
Associations of Workmen in Engineering Services department whose
services have been transferred from Air India Limited to Air India
Engineering Services Limited. The same set of workmen had earlier
challenged their transfer from Air India Limited to Air India Engineering
Services Limited. This Court by Judgment dated 2 April 2013 passed in
Writ Petition No.2457 of 2013 and other connected petitions had
negatived the challenge. Therefore, though these petitioners are no
longer employees of Air India Limited, their petitions are being heard
as a part of the group for the reason that in Paragraph 49 of the order
dated 2 April 2013, this Court has recorded the submission made on
behalf of Union of India to the effect that all the benefits, privileges and
facilities given to secure the interests of employees of Air India Limited
would be extended to the employees of Air India Engineering Services
Limited whose services were transferred from Air India Limited; and
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(b) All the other petitions in the group have been filed by
Associations of Workmen who continue to work with merged entity Air
India Limited.
5) The common issue raised in all the petitions is:
“Whether Air India Limited can alter the Pay Scale,
Designation, Seniority etc., i.e. conditions of service as
provided in the fourth schedule of the I. D. Act 1947
on the basis of the recommendation of Justice
Dharmadhikari committee without following the due
procedure of law as provided under Section 9A of the
I.D. Act, 1947.?”
6) As the issue arising in all these Petitions are similar, for
the sake of convenience, we set out the facts from Writ Petition No.1606
of 2013 which are as under:
(a) The members of the petitionerunion are technical and non
technical employees working with erstwhile Air India Limited which is
now a part of a merged/ amalgamated (transferee entity) called Air
India Limited;
(b) The erstwhile Air India and Indian Airlines were formed as
statutory corporations under the Air Corporations Act, 1953. The
erstwhile Air India operated flights to foreign lands while the erstwhile
Indian Airlines operated in the domestic sector with a few destinations
in neighboring countries;
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(c) On 29 August 1960, the Government of Maharashtra issued
a notification under clause (b) of the proviso to Section 9A of the I. D
Act notifying the following regulations:
(i) The Air India International Employees'
Services Regulations;
(ii) The Indian Airlines Corporation (Flying
Crew) Service Rules;
(iii) The Indian Airlines Corporation (Aircraft
Engineering Department) Service Rules; and
(iv) The Indian Airlines Corporation (Employees
other than Flying crew and those in the Aircraft
Engineering Department) Service Rules
(the notified regulations).
As a result of the above the employers of workmen
governed by notified regulations were exempted/excepted from the
giving any notice to its workmen of change in conditions of service.
(d) In 1993, liberalized sky policy was introduced by the
respondent Union of India. This resulted in private air lines also being
allowed to compete with the erstwhile Air India Corporation and
Indian Airlines Corporation;
(e) In their desire to prevent exodus of its employees to
private sector from the erstwhile Indian Airlines and Air India a
Productivity Linked Incentives (PLI) Scheme was introduced by both
the erstwhile Corporations;
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(f) On 29 January 1994, the Air Corporation Act, 1953 was
repealed by Air Corporations (Transfer of Undertaking and Repeal) Act
1994, (Repeal Act 1994). By virtue of this Repeal Act 1994, the
erstwhile statutory corporations of Air India and Indian Airlines were
transferred to companies by the same name viz Air India Limited and
Indian Airlines Limited under the Companies Act, 1956. The terms and
conditions of services of the employees/ workmen then working with
the two Corporations were protected by the Repeal Act, 1994;
(g) On 13 December 1995, 5 May 1996 and 31 May 1996 the
PetitionerUnion signed several Agreements/Settlements with Air India
Ltd. regarding pay fixation, terms and conditions of service etc.;
(h) On 18 July 1996, a new wage agreement was arrived at/
settled between the PetitionerUnion and Air India Limited for the
period 1 January 1997 to 31 December 2006;
(i) On 22 August 2007, the Government of India passed an
order sanctioning the Scheme of Amalgamation of Air India Limited and
Indian Airlines Limited into transferee entity National Aviation
Corporation of India (NACIL)). This order was passed under Section
391394 of the Companies Act, 1956. On 24 September 2010, the
NACIL was renamed as Air India Limited;
(j) In the meantime, being conscious of the losses being
incurred by the merged entity the Government of India appointed SBI
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Capital Markets Limited to examine the financial restructuring of Air
India Limited. Thereafter, with the assistance of the SBI Capital Markets
Limited the management of Air India Limited formulated the Turn
Around Plan (TAP) and Financial Restructuring Plan (FRP) with an
underlying strategy to improve the financial position of the Air India
Limited. Further, Air India Limited also appointed Deloite Touche
Tohmatsu India Pvt. Ltd. to review the TAP and FRIP. On 11 February
2011, the Deloite Touche Tohmatsu India Pvt. Ltd. submitted its report
on the review of the TAP and FRP of Air India Limited;
(k) Thereafter the Group of Ministers of Government of India
appointed a Group of Officers of the Finance Ministry to examine the
TAP and FRP of Air India Limited and submit its report. The Group of
officers in its report observed that the staff cost of Air India Limited was
highest in the industry both in terms of number of employees per air
craft as well in terms of costs per employee. Therefore, it suggested a
review of the allowances and perks being given by Air India Limited to
its employees. It was pointed out by the respondents that the
accumulated losses till 2012 of Air India Limited were to the extent of
Rs.30 crores. On 12 April 2012 the Union Cabinet of the Government of
India had approved the TAP & FRP for Air India Limited with the
objective of reviving it. This would entail infusion of funds aggregating
to Rs.49,500/ crores. However, this infusion of funds was subject to the
transferee entity Air India Limited reaching the milestones as provided
in the TAP and FRP;
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(l) During the above process sometime in March 2011, Air
India Limited requested the Government of India to constitute an
independent committee of external experts to examine various issues
relating to compensation, harmonization, level mapping, parity/
rationalization of wages/ salaries and other allowances amongst the
different categories of employees at various levels. This was necessary
as its employees were drawn from the erstwhile Air India Limited and
Indian Airlines Limited so as to formulate uniform wage policy/ service
conditions for the transferee entity Air India Limited;
(m) On 11 May 2011, the Government of India set up a
committee under the Chairmanship of Mr. Justice D. M. Dharmadhikari
(Retired Judge of Supreme Court). The terms of reference to the
Justice Dharmadhikari Committee were to examine the principle of
integration across various cadres, determination of seniority, examine
on the principle of pay/wages rationalization/restructuring between
all employees of the erstwhile airlines and to suggest harmonized
working conditions in the light of cost neutrality principle. All the above
to bring them in line with the best airline practices;
(n) On 31 January 2012, Justice Dharmadhikari Committee
submitted its report to the Government of India. The report
recommended various measures to bring about integration of the
employees of the two merged entities i.e. erstwhile Indian Airlines
Limited and Air India Limited. The Committee suggested/recommended
that PLI (Productivity Linked Incentives) should be replaced by PRP
(Profit /Productivity Related Pay). The revised pay should be such that
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all allowances other than Dearness allowance should not be in excess
of 50% of the basic wages. The Government of India then set up
three member committee to look into the Dharmadhikari's Committee
report and also record a time schedule for its implementation;
(o) The petitioners by their letter dated 28 June 2013 to the
Executive Director of Air India Limited raised objections to the
recommendations made by Justice Dharmadhikari's Committee. In
particular, objection was in respect of fixing of interse seniority of
different cadres and requested that the same may not be enforced on
its members;
(p) On receipt of the report of the three member Committee, a
cabinet note was prepared. The note of the cabinet recorded the fact
that implementation of the Dharmadhikari Committee will result in an
aggregate saving of Rs.320 crores per annum (Rs.200 crores in respect
of licenced category and Rs.120 crores in respect of non licenced
category). The above note was approved by the cabinet on 22 February
2013. These recommendations of Dharmadhikari Committee after
approval of the cabinet are now being implemented by Air India
Limited;
(q) We find that pending the approval of Justice
Dharmadhikari report by the Cabinet on 22 February 2013, the
transferee entity Air India Ltd. has issued two staff Notifications dated
22 January 2013 and 23 January 2013 providing/seeking to make ad
hoc payments of arrears of salary from July to September 2012 and
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October and November 2012 respectively. Mention of the above two
staff notifications are made in Writ Petition No.1088 of 2013 filed by
Indian Commercial Pilots Association. The above two Notifications
provide that non licenced category would be paid 75% of the difference
between revised salary and amount i.e. Cost to Company (CTC) as per
Justice Dharmadhikari Committee report and the actual salary. The lay
over and flying allowance payable to the Cabin crew would also be 75%
of the amounts payable. Besides the other licenced categories such as
Air Craft Technicians Service Engineer were also to be paid it arrears ad
hoc at 75% of their applicable entitlement. Both the Notifications
provided that these adhoc payments were being made pending final
implementation of the Justice Dharmadhikari Committee report and the
same will be adjusted against the final payments to be made. It is
submitted on behalf of the petitioners in Writ Petition No.1088 of 2013
that the present payments are still being made on the above basis.
7) All these petitions have been filed by Associations/Union of
Workmen challenging the implementation of the Justice Dharmadhikari
Committee report by Air India Limited without following the procedure
provided in Section 9A of the I. D. Act. It is the petitioners' case that
directions issued in pursuance of the Dharmadhikari Committee report
result in change of conditions of service as specified in the Schedule IV
to the I. D. Act.
8) Mr. R.A. Dada, Senior Counsel, Mr. J.P. Cama, Senior
Counsel, Mr. Anand Grover, Sr. Counsel, Ms. Jane Cox, Mr. A.S.
Peerzada and Mr. B. D'souza appearing for the petitioners support the
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petitions on the following grounds:
(a) The implementation of the Dharmadhikari Committee
Report by Air India Limited amounts to change in conditions of service
of the petitioners' workmen as specified in fourth schedule of the I.D.
Act. It is urged that this change in conditions of service to their
prejudice is in breach of statutory requirement of Section 9A of the I. D.
Act. The condition of service of the petitioner workmen in respect of
matters specified in the fourth schedule of the I. D. Act had been
arrived at under diverse settlements and awards. Therefore, such
unilateral change in conditions of service is not sustainable in law;
(b) The scheme of arrangement/amalgamation of erstwhile
Indian Airlines Limited and Air India Limited by an order dated 28
August 2007 was an order allowing the scheme of amalgamation
specifically on the condition that the transferee entity will abide by the
Settlement arrived at between the erstwhile Companies (transferor
entities) and its unions. Further, it was on the assurance that the
service conditions of the workmen would not be changed to their
detriment that the scheme of amalgamation was sanctioned. Thus Air
India Limited is estopped from changing the conditions of service of its
workmen to the prejudice of the workmen;
(c) The Settlements arrived at between the erstwhile Air India
Limited and Indian Airlines Limited with their respective employees will
continue to hold the field notwithstanding their merger into the
transferee entity Air India Limited. This is in the view of the fact that
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Section 18(3)(c) of the I. D. Act provides that settlements/awards
arrived earlier in point of time will be binding upon the successor
employer;
(d) It was further submitted that even when a
Settlement/Award between the petitioner union and the erstwhile Air
India Limited and Indian Airlines Limited were to come to an end by
efflux of time, yet the settlement/award arrived at earlier would
continue to be binding and in operation till a new settlement is arrived
at or an award is passed by the Tribunal. This was in view of the clear
provision in Section 19(2) of the I.D. Act; and
(e) The notification dated 29 August 1960 issued by the State
of Maharashtra under clause (b) of the proviso to Section 9A of the I.
D. Act in case of employees who are governed by notified regulations
will not apply in view of the fact that all these notified regulations were
issued under the Air Corporation Act, 1953 which itself was repealed in
1994. Consequently, as these notified regulations have ceased to exist
the notification dated 29 August 1960 are also not enforceable.
9) Mr. Kevic Setalwad, learned Additional Solicitor General for
the Union of India and Mr. Girish Kulkarni Counsel for the Air India
Limited while opposing the petitions made the following submissions:
(a) The decision of the Government of India as reflected in
decision of cabinet dated 22 February 2013 which is being implemented
by Air India Limited cannot be interfered with in writ jurisdiction as the
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same is a policy decision. This decision on matter of policy has been
taken by the Government of India in supervening Public interest and
only in order to save Air India Limited from being wound up;
(b) The petitioners are all workmen. Air India Limited has
been consistently incurring losses. In these circumstances, the
petitioners have no legal right to seek writ of mandamus in respect of
allowances and emoluments in complete disregard to the factual reality
of consistent losses of Air India Limited leading to a real threat of it
facing winding up proceedings under the Companies Act, 1956;
(c) Air India Limited is only implementing the decision of the
expert body namely Justice Dharmadhikari Committee as contained in
its report on issues of pay scale and allowances of its employees. On
the above facts this Court may not interfere with the implementation of
the expert report of Dharmadhikari Committee in its writ jurisdiction;
d) The order of the Central Government dated 22 August
2007 sanctioning the scheme of amalgamation /merger of erstwhile
Indian Airlines Limited and Air India Limited under Section 391 to 394
of the Companies Act has the force of law. Therefore, the order/scheme
of amalgamation can only be modified by the Company Court under
Section 392 of the Companies Act, 1956 and it is not open to the
petitioner to seek modification of the order of the scheme allowing the
amalgamation of erstwhile Indian Air Lines Limited and Air India
Limited. In fact, Clause 3.13(a) of the scheme of amalgamation entitles
the transferee entity to change the service conditions of its workmen
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as per applicable law. The petitioners are by this petition seeking to
modify the scheme of amalgamation and this cannot be permitted.
Further Section 9 of the Repeal Act, 1994 specifically empowers the
Central Government to issue orders/directions. Thus, the decision of the
Government of India in issuing directions to implement the report in
terms of Article 165 of Articles of Association of Air India Limited read
with clause 3(13)(a) of Scheme of Amalgamation is a change of service
conditions in accordance with law as permitted by the Scheme of
Amalgamation;
e) Section 9A of the I.D. Act would have no application to the
present facts for the reason that on 29 August 1960, the Appropriate
Government i.e. State Government had issued a notification under
clause (b) of the proviso to Section 9A of the Act. Consequently the
notified regulations would not require giving of any notice of change in
terms of Section 9A of the Act; and
f) In any event, the issue whether Notification dated 29
August 1960 issued by the State of Maharashtra under Clause(b) of the
proviso to Section 9A of the I.D. Act is still in force or has it lapsed on
account of repeal of the Air Corporation Act,1953 is an issue which is
pending before the National Industrial Tribunal. In the above
circumstances, it is not open to the petitioners to nullify the issue
before the Tribunal by seeking directions on the same aspect from this
Court. In view of the above, it is submitted that the petitions should not
be entertained.
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10) We have considered the rival submissions. The crux of the
dispute between the parties is whether in the facts of this case Section
9A of the I. D. Act is at all applicable. It is very clear that Section 9A of
the I. D. Act is applicable whenever an employer seeks to change the
conditions of service of any workman in respect of matters referred to in
the fourth schedule to the I. D. Act. This section prohibits any change in
conditions of service unless notice of at least 21 days of proposed
changes in conditions of service is given in the prescribed manner to the
workmen. The exceptions provided to the above requirement in Section
9A of the I. D. Act is in present facts applicable only when the change
is effected by virtue of settlement/award or when the appropriate
Government has issued a notification notifying the rules/regulations
under clause (b) of the provisions to Section 9A of the I. D. Act.
11) For the sake of convenience we are reproducing herewith
Section 9A of the I. D. Act.
“9A. Notice of change. No employer, who proposes to
effect any change in the conditions of service
applicable to any workman in respect of any matter
specified in the Fourth Schedule, shall effect such
change,
(a) without giving to the workmen likely to be
affected by such change a notice in the prescribed
manner of the nature of the change proposed to be
effected; or
(b) within twenty one days of giving such notice:
Provided that no notice shall be required for effecting
any such change
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(a) where the change is effected in pursuance of any
1[ settlement or award]; or
(b) where the workmen likely to be affected by the
change are persons to whom the Fundamental and
Supplementary Rules, Civil Services (Classification,
Control and Appeal) Rules, Civil Services (Temporary
Service) Rules, Revised Leave Rules, Civil Service
Regulations, Civilians in Defence Services
(Classification, Control and Appeal) Rules or the
Indian Railway Establishment Code or any other rules
or regulations that may be notified in this behalf by
the appropriate Government in the Official Gazette,
apply.] or
(c).....”
12) It is not seriously disputed before us that as a consequence
of implementation of the Justice Dharmadhikari Committee report there
would be a change in the conditions of service in respect of matters
referred to in the fourth schedule to the I.D. Act in these bunch of
cases. However, it is the contention of the respondent that Section 9A
of the I.D. Act is not applicable for the reason that the State
Government i.e. State of Maharashtra which was the appropriate
Government had issued a notification dated 29 August 1960 in terms of
clause (b) of the proviso to Section 9A of the I.D. Act notifying the
regulations. All the notified regulations were framed under the
provisions of Air Corporation Act, 1953. In 1994, the Repeal Act 1994
repealed the Air Corporations Act, 1953. It is urged by the petitioners
that as the parent Act viz. Air Corporations Act, 1953 under which the
notified regulations were framed was repealed, the notified regulations
also cease to exist. In fact it was submitted that this issue is no longer
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resintegra as this very issue was considered by the Supreme Court in
Air India vs. Union of India 1995(4) SCC 734. The Apex Court held that
if subordinate legislation framed under the parent Act is to survive then
the repealing statute must say so in so many words. The Apex Court
held that on coming into force of the Repeal Act 1994 with effect from
29 January 1994 the Regulations made under the Air Corporations Act
1953 would also come to an end. The Court also observed that Section
8 of the Repeal Act, 1994 which seeks to protect the conditions of
existing employees on that date does not apply to employees who
joined the erstwhile Indian Airlines Limited or Air India Limited after
1994 Repeal Act came into force. In the above circumstances, the Apex
Court held that the notified regulations ceased to be effective from
January 1994. Consequently it must follow that the notification dated
28 August 1960 issued by the State Government would also cease to
exist as the notified regulations themselves cease to exist. The above
decision has been followed by the Apex Court in the matter of Indian
Airlines Limited vs. Prabha D. Kanan 2006(II) SCC 67 wherein it has
held that Indian Airlines Flying Crew Services Regulations (one of the
notified regulations) has ceased to be effective on the repeal of the Air
Corporations Act, 1953 as the regulations were framed thereunder.
13) The respondents contest the submission on the ground that
the very issue whether or not regulations issued under Air Corporations
Act, 1953 are still in force post the Repeal Act has been referred to a
larger Bench by the Apex Court on 11 December 2006 in India Airlines
vs. Union of India SLP(Civil) No.22330331/2005. However, no decision
has yet been rendered by the larger Bench nor the decision of the Apex
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Court in Air India vs. Union of India 1995(4) SCC 734 and in
Indian Airlines vs. Prabha Kanan 2006 (II) ACC 67 has been stayed.
The respondents submitted that in any case the above decisions of the
Apex Court being relied upon by the petitioner did not decide upon the
validity of the notification and therefore, do not apply.
14) We note that once the Apex Court holds that on repeal of
the Air Corporations Act, 1953 the regulations framed thereunder cease
to exist, it must follow the notification dated 29 August 1960 cannot
apply. Therefore, we are bound by both the above decisions of the
Supreme Court and must hold that Notification dated 29 August 1960
issued by the State of Maharashtra under clause (b) of the proviso to
Section 9A of the I.D. Act is not in force as the notified regulations have
ceased to exist.
15) In the alternative, the respondents relied upon the
following decisions to contend that Section 9A of the I. D. Act is not
applicable and therefore, no notice of change of service conditions is
required to be given:
(a) B.J.Shetty and ors. Vs. Air India Limited
2001 B.C.R. 343.
(b) Air India Cabin Crew Association vs. Air
India Ltd. 1981 II LLJ 306.
(c) Indian Pilot Guild vs. Union of India 1995
LLJ 784.
(d) Air India Cabin Crew Association vs. Air
India Corporation in Appeal No.157/1974.
(e) Air India Cabin Crew Association vs. Air
India Corporation in Miscellaneous
Application No.281 of 19784 dated 4 July
1974.
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(f) Indian Airlines vs. Union of India 2006
(128) DLT 505 and
(g) Air India Cabin Crew Association vs. Union of
India and ors. 2008 I LLJ 63(Bombay).
We find that all the aforesaid decisions at (a)to (f) were
rendered prior to the decision of the Apex Court in Indian Airlines Vs.
Prabha D. Kanan (supra) (2006) which followed the decision of the
Apex Court in Air India Vs. Union of India (supra) 1995. In that view
of the matter the decisions relied upon by the respondents cannot be
considered to be good law. So far as the decision at (g) above is
concerned, though the same was rendered after the decision of the
Supreme Court in the matter of Prabha D. Kanan (supra), yet the
decision has not been considered. Therefore, it was rendered per
incurim and is not good law. In view of the above we hold that
Section 9A of the I. D. Act is applicable to the present facts as the
Notification dated 19 August 1960 is not in force.
16) It was next contended by the respondents that the change
in conditions of service of the workmen is a decision taken at the
highest level of the Government by the Cabinet on 22 February 2013.
The decision is a policy decision. It is submitted that a policy decision is
not to be interfered with and in support various decisions were cited.
There can be no dispute that in respect of policy decision of the
Government this Court would be loath to interfere. However, even if
we accept the aforesaid submission as stated (without examining it on
merits) that change in conditions of service in the present facts is a
policy decision, yet the implementation of a policy decision by the State
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has necessarily to be in compliance with statutory requirement of law.
In this case the statutory requirement is of giving of notice in terms of
Section 9A of the I.D. Act. Taking of a policy decision does not absolve
the Executive from complying with the legislative enactment. This alone
ensures that there is no arbitrariness in the decision making and
implementation process. This is a basic postulate of the rule of law.
Consequently, the respondent – Air India Limited cannot absolve itself
of its obligation under Section 9A of the I.D. Act to issue notice of
change in the conditions of service to its workmen of at least 21 days
before effecting any change.
17) It is next contended by the respondents that once the
scheme has been sanctioned under Section 391 to 394 of the Companies
Act 1956 then any modification of the scheme can only be done under
Section 392 of the Companies Act, 1956. It is contended by the
petitioners' that the order dated 22 August 2007 permits the Central
Government to issue directions to the merged entity for the proper
implementation of the scheme (See Para 35(b)(vii) of the order dated
22 August 2007). However, the scheme itself provides an assurance
that the conditions of service of the employees in the transferee
company will not be less favorable to those being enjoyed by the
employees/workmen of the transferor company on the effective date of
the scheme of amalgamation. Thus, in the present case we do not find
that the petitioners have sought any change in the scheme or the order
which allowed the amalgamation/ merger of Air India Limited and
Indian Airlines Limited. In fact, if at all, the petitioners are only seeking
to enforce the representation made under the scheme that there would
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be no change in the conditions of service of the workmen to their
prejudice. In any case any change in the conditions of service in future
has to be in accordance with the applicable law. In this case the
applicable law is Section 9A of the I.D. Act which the Air India Limited
is required to comply with. Therefore, we find no substance in this
objection by the respondents.
18) It was next contended that no notice under Section 9A of
the I. D. Act is required to be given to the workmen as the power is
being exercised in terms of clause 3.13(a) of the Scheme of
Amalgamation read with Section 9 of the Repeal Act, 1994 which
permits the Central Government to issue directions/orders to the
transferee entity Air India Limited. We find that even if the change of
service conditions has been issued in terms of the above provision, the
same does not do away with the necessity of following the mandate of
Section 9A of the Act. Further, it is submitted that the directions have
been issued by the Central Government to Air India Limited in terms of
Article 77 of the Constitution. Article 77 of the Constitution deals with
making of rules for the convenient transaction of business of the
Government and can have no application where directions are being
issued to an entity which is separate and distinct from the Government
of India as in this case. Therefore, reliance upon Article 77 of the
Constitution of India is misplaced and has no application to the present
facts.
19) During the course of the arguments before us, the
respondents also submitted that the settlements arrived at between the
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petitioner Unions and the erstwhile Indian Airlines Ltd. and Air India
Limited had expired by lapse of time. Thus there is no
settlement/award which was effective. In the circumstances, it was no
longer obligatory on the respondents to give any notice of change in
conditions of service to its workmen under Section 9A of the I. D. Act.
20) The petitioner in response drew attention to Section 19(2)
of the I.D. Act which provides that a settlement shall be binding for
such period as is agreed upon by the parties and if no period is
mentioned therein then for a period of 6 months. However, the
settlement/award arrived at would continue to be binding even after
the expiry of the minimum period mentioned therein of six months, in
the absence of any period and until two months have expired after the
date on which the notice in writing of an intention to terminate the
settlement is given by one of the parties to the agreement. Therefore,
even if the settlement has come to an end by lapse of time as provided
in the settlement/award yet by virtue of Section 19(2) of the I.D. Act
the same would continue to be binding. The Apex Court in LIC of
India vs. D.J. Bahadur AIR 1980(SC) 2181 has inter alia observed as
under:
“Once the earlier contract is extinguished and
fresh conditions of service are created by the award or
the settlement the inevitable consequence is that even
though the period of operation and the span of
binding force expire, on the notice to terminate the
contract being given, the said contract continues to
govern the relations between the parties until a new
agreement by way of settlement or statutory contract
by the force of an award take its place. If notice had
not been given, the door for raising an industrial
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dispute and the fresh conditions of service would not
have been legally open. With action under Section 9A,
Section 10(2) or (6) the door is ajar for disputes being
raised and resolved. This, in short is the legal effect
not the lethal effect of invitation to industrial trial of
strength with no contract of service or reversion to an
absolute and long ago “dead” contract of service.”
21) We note that the Court in the above case observed that
even if a settlement/award ceases to be effective as an
award/settlement, yet it would continue to be in force as a contract
between the parties. Therefore, the fact that the settlement/award has
come to an end by efflux of time as provided in the award yet it would
still continue to operate as arising out of contract. Thus any change in
the terms and conditions have to meet rigour of Section 9A of the I.D.
Act. Thus, we do not find any substance in the above objection.
22) The respondents also submitted that the settlement/ award
was arrived at not between the transferee entity Air India Limited but
by its predecessor and the petitioner unions. Consequently, such a
settlement/award is not binding upon the transferee entity Air India
Limited. We find that a complete answer to the above submission is
provided under Section 18(3)(c) of the I.D. Act which inter alia
provides that when settlement has been arrived at between the
employer and its workmen, the same shall be binding not only on all
the parties to the dispute but also upon the heirs and successor of the
employers i.e. erstwhile Air India Limited and Indian Airlines Limited
in this case. In view of the above, the transferee entity Air India
Limited would continue to be bound by the settlement/award arrived at
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between its predecessor Air India Limited and Indian Airlines
Limitedwith the petitionerunions. Therefore, we do not find any
substance in the above submissions.
23) It was next contended that the issue arising herein namely
whether regulations framed under the Air Corporations Act 1953
continue to apply to the employees of the merged entity i.e. Air India
Limited has already been referred to National Industrial Tribunal for
its opinion. Therefore, the petition should not be entertained and the
National Industrial Tribunal be allowed to rule on the issue of whether
the Notification dated 29 August 1960 under Section (b) of the
provisions to Section 9A of the I. D. Act is still in force. Both the sides
advanced arguments before us at great length as to the applicability
/inapplicability of Notification dated 29 August 1960 even after the
repeal of the Air Corporation Act 1953. We have considered the
submissions of both the sides on the above issue and ruled on the issue
at para 11 to 13 herein above. We have held following the decisions of
the Apex Court in Air India (1995)(supra) and Prabha D.Kanan (2006)
(supra) that the Notification dated 29 August 1960 is not in force.
Therefore, the issue before the National Industrial Tribunal stands
concluded in favour of the petitioners by virtue of this decision.
24) In view of the above, we are of the view that notice under
Section 9A of the I.D. Act should be given by Air India Limited to the
petitioner unions of the change in conditions of service in the prescribed
manner. Thereafter, it is for the unions to accept the same or agitate in
respect thereof by raising a dispute. In case a dispute is raised, which
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seems likely, the same would be resolved under the I.D. Act on its
merits. However, the above issue to be resolved may take some time,.
Therefore, the issue to be considered is what relief, if any, is to be
granted in the meantime. We have noted the fact that the merged
entity Air India Limited would possibly be wound up unless further
funds to the extent of Rs.49,120 crores are infused. Therefore, keeping
in view the peculiar condition of Air India Limited and also the desire of
Unions to reach an amicable settlement and not to adopt an attitude
which would result in the transferee entity Air India Limited being
wound up and the workmen losing their jobs, it would be in the fitness
of things that pending the resolution of the dispute by the Industrial
Tribunal or earlier the petitionersworkmen would be entitled to receive
and would continue to have the same service benefits i. e. emoluments
etc. as is being received by them today. This position would continue
till the resolution of the likely dispute, if raised by the Workmen
Unions on the service of notice under Section 9A of the I.D. Act.
25) Before parting we may point out that so far as the Writ
Petition Lodging No.2717/2013, Writ Petition No.419/2013 and Writ
Petition No.1168/2013 are concerned these very associations had filed
petitions challenging the dehiving of the Engineering Department of
Air India Ltd. to Air India Engineering Services Ltd. This Court dealt
with the above challenge in its order dated 2 April 2013 in Writ Petition
No.2457 of 2012 along with other petitions. In the order dated 2 April
2013 it was recorded that the merged entity Air India Limited as well
as Government of India has specifically made a statement before the
Court that the petitioners therein would continue to have the same
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service conditions as they would have had if they had continued in Air
India Limited. This was an undertaking given. It was on the basis of the
aforesaid representation/undertaking that this Court by its order dated
3 April 2013 upheld the action of the respondents dehiving the
Engineering Department of Air India Limited to Air India Engineering
Services Ltd. It is in the above circumstances that the petitioners in the
three petitions are aggrieved by the action of the respondents. By this
order it is directed that even if they are no longer employees of Air
India Limited, their present employers viz. Air India Engineering
Services Ltd. will issue notice of change in service conditions to the
petitioners under Section 9A of the I. D. Act.
26) Therefore, the issue raised for our consideration as framed
in Paragraph 5 above is answered in the negative i.e. Air India Limited
cannot alter the conditions of service as provided in the forth Schedule
of the I.D. Act, 1947 without following the procedure prescribed in
Section 9A of the I. D. Act, 1947.
27) Accordingly, the petitions are allowed in the above terms
with no order as to costs.
CHIEF JUSTICE
(M.S. SANKLECHA, J.)
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