IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 20TH DAY OF AUGUST 2019 BEFORE THE HON’BLE MR. JUSTICE JOHN MICHAEL CUNHA CRIMINAL PETITION NO.5849 OF 2015 BETWEEN:
SHRI WILLY KO. CEO AIR INDIA SATS AIRPORT SERVICES PRIVATE LTD C/O AIR INDIA BOOKING OFFICE, HAT HILL ROAD, LALBAGH MANGALORE-575003 ... PETITIONER (BY: JAYAKUMAR S. PATIL, SR. ADVOCATE A/W SRI:SHOBHITH N SHETTY, ADVOCATE) AND STATE OF KARNATAKA REP BY THE LABOUR ENFORCEMENT OFFICER (CENTRAL), GOVT.OF INDIA, MINISTRY OF LABOUR & EMPLOYMENT, RAILWAY STATION ROAD, MANGALORE-575501 ... RESPONDENT (By Sri. S.R. DODAWAD, CGC FOR SRI: C SHASHIKANTH, ASG ) THIS CRL.P IS FILED U/S.482 CR.P.C PRAYING TO QUASH THE PROCEEDINGS IN C.C.NO.1777/2015 PENDING ON THE FILE OF THE JMFC-II COURT, MANGALORE AGAINST THE PETR.
THIS CRL.P COMING ON FOR ADMISSION THIS DAY, THE COURT MADE THE FOLLOWING:-
O R D E R Petitioner has sought to quash the proceedings in C.C.No.1777/2015 on the file of the JMFC II Court, Mangalore.
Heard learned Senior Counsel appearing for petitioner and learned Central Government Counsel appearing for respondent. Perused the records.
2. The respondent – the Labour Enforcement Officer (Central) filed a complaint under section 200 Cr.P.C., seeking prosecution of petitioner Sri.Willy Ko., CEO, Air India SATS Airport Services Pvt. Ltd., under section 23 of the Contract Labour (Regulation & Abolition) Act, 1970 for the alleged breach of section 12(1) of the said Act. The substance of the alleged complaint is that the petitioner is a contractor engaged in ground handling services at Mangalore Airport, Mangalore and thus, accused is a ‘Contractor’ as defined in section 2(1) of the Act and they were found executing the work through 70 contract labourers without obtaining a licence.
3(i) The contention of learned Senior Counsel appearing for petitioner is that, “Petitioner is a Company incorporated under the Companies Act, 1956 and petitioner is a Joint Venture with Air India and engaged in the business of providing ground handling service to the flights of Air India Ltd., at Mangalore, Bangalore and certain other Air Ports. Petitioner employed 184 permanent employees at Mangalore Air Port in various categories for the purpose of carrying its operation for Air India, which is a national carrier.” Since petitioner – Company is a Joint Venture Company (JVC), it is not a Contractor within the meaning of the Contract Labour (Regulation & Abolition) Act, 1970. That the work being carried out by petitioner is on principal to principal basis and therefore, the question of violation of the Contract Labour (Regulation & Abolition) Act, 1970 does not arise at all.
3(ii) Referring to communication issued by the Under Secretary to the Government of India dated 16.03.2009 (Document No.3 annexed to the petition) and the letter dated 22.09.2010 of the Chairman and Managing Director, Air India (Document No.4 annexed to the petition), learned Senior Counsel would submit that the proposal of the Air India for setting up a Joint Venture Company (JVC) with SATS for ground and cargo handling activities at Indian Air Ports was considered by the Cabinet in its meeting held on 23.02.2009 and the same has been approved subject to the conditions outlined therein.
3(iii) Section 42 of the Airports Authority of India Act, 1994 empowers the authority to make regulations consistent with the Airports Authority of India Act, 1994 and the rules made thereunder to provide for all matters for which provisions are necessary or expedient for the purpose of giving effect to the provisions of this Act. In exercise of powers conferred under sections 42 of the Airports Authority of India Act, 1994, the Airports Authority of India, with the prior approval of the Central Government has notified the regulations called as the “Airports Authority of India (General Management, Entry for Ground Handling Services) Regulations, 2000”. Regulation 3 thereof empowers an operator or carrier to carry out ground handling services at an airport by itself or engage the services of any of the following:
(1) Airports Authority of India;
(2) The two national carrier Air India and Indian Airlines; & (3) Any other handling agency licensed by the Airports Authority of India.
3(iv) In terms of the above regulation, the petitioner has entered into a joint venture with Air India which has been approved by the Government of India, Ministry of Civil Aviation. This contract therefore is entered on principal to principal basis and therefore, the provisions of the Contract Labour (Regulation and Abolition) Act, 1970 and the Contract Labour (Regulation & Abolition) Central Rules, 1971 do not apply to the Joint Venture Company which has engaged the services of workers in its venture and hence, the impugned action initiated against the petitioner being contrary to the provisions of the above Act and Regulation, is liable to be quashed in exercise of powers under section 482 of Cr.P.C.
3(v) To buttress this point, learned Senior Counsel has also placed reliance on the term “Contractor” as defined under the Contract Labour (Regulation and Abolition) Act, 1970 and has emphasized that in relation to the establishment namely Air India Ltd., petitioner does not answer the description of “Contractor” as defined therein and hence, the prosecution initiated against petitioner being an abuse of process of court, is liable to be quashed.
3(vi) In support of his argument, learned Senior Counsel has placed reliance on the decision of the High Court of Judicature at Bombay in Writ Petition No.277/2003 connected with Writ Petition No.278/2003 dated 8.6.2015.
4. Disputing the above contentions, learned Central Government Counsel appearing for respondent, by referring to the very same regulation relied on by learned Senior Counsel would submit that the approval accorded by the Government for setting up Joint Venture Company does not amount to permitting the petitioner to violate the provisions of the Contract Labour (Regulation and Abolition) Act, 1970 or any other provisions of law. Petitioner is a “Contractor” within the meaning of the Contract Labour (Regulation and Abolition) Act, 1970. The inspection conducted by the Labour Enforcement Officer purely indicates that petitioner has committed the breach of section 2(1)(c) of the said Act and thus seeks to dismiss the petition.
5. I have bestowed my careful thought to the rival contentions urged at the Bar and have gone through the relevant provisions of law relied on by petitioner and the decision rendered by the High Court of Judicature at Bombay.
6. The facts of the case dealt by the High Court of Judicature at Bombay are distinguishable from the facts of this case. In the writ petitions, supra, considered by the High Court of Judicature at Bombay, the petitioners therein sought for appropriate writ, order and direction to declare that the provisions of Contract Labour Act were not applicable to the extent of contract of ground handling services entered into between petitioner No.1 and various foreign airlines. In the said case, the settlement contract annexed to the petition indicated that foreign airlines entered into a contract with Air India and Indian Airlines in respect of ground handling services in terms of the Airports Authority of India (General Management, Entry for Ground Handling of Transport Services) Regulations, 2000 and in that context, it was held by the High Court of Judicature at Bombay that the said contract having been entered into on principal to principal basis, the question of violation of the provisions of the Contract Labour (Regulation and Abolition) Act, 1970 and the Contract Labour (Regulation and Abolition) Central Rules, 1971 does not arise at all, since the provisions of Regulations, 2000 clearly authorized the petitioner to enter into contract of ground handling activities.
7. In the instant case, as per the case of the petitioner, the contract was entered into between the petitioner SATS Airport Services Pvt. Ltd., and Air India. The communication issued by the Under Secretary to the Government of India dated 16.03.2009 (Document No.3) relied on by the petitioner indicates that the proposal of Air India for setting up a Joint Venture Company (JVC) with SATS for ground and cargo handling activities at Indian Airports was approved by the Cabinet, subject to the conditions outlined therein. One of the conditions stipulated therein was that, “the JVC shall be got incorporated under the Companies Act, 1956 and the Certificate of Commencement of Business shall be obtained by 15.04.2009.” The said communication also dealt with terms and conditions of transfer of employees of Air India to JVC. This communication, therefore, makes it evident that on account of the approval accorded by the Government, an independent entity has come into existence for the purpose of dealing with ground and cargo handling activities at Indian Airports.
8. This view gets further strengthened from the subsequent communication dated 22.09.2010 (Document No.4) wherein the Chairman and Managing Director of Air India has written to the Chairman, Airports Authority of India Ltd., that with effective from 01.10.2010, all Air India flights will be handled by it through their joint venture M/s.AI SATS at Mangalore. This agreement was not between two Carriers rather the joint venture was between National Carrier and a handling agency licensed by the Airports Authority of India. Though Airports Authority of India (General Management, Entry for Ground Handling of Transport Services) Regulations, 2000 relied on by learned Senior Counsel permits the said operation under joint venture, but in view of constitution of an independent agency to carry on the joint venture of ground and cargo handling activities in the name of M/s.Air India SATS Airport Services Pvt. Ltd., at Mangalore, in my view, the said arrangement or contract between the petitioner and the Air India cannot be construed as a contract between principal to principal. Therefore, the contention of learned Senior Counsel appearing for petitioner that the work carried on by petitioner is on principal to principal basis and therefore, the provisions of the Contract Labour (Regulation and Abolition) Act, 1970 are not applicable to the petitioner cannot be accepted. As the inspection conducted by the Labour Enforcement Officer (Central) discloses violation of section 12(1) of the Contract Labour (Regulation and Abolition) Act, 1970 which is punishable under section 23 of the said Act, respondent is entitled to continue with the prosecution of petitioner for the alleged violation.
Consequently, the petition is liable to be rejected and accordingly, it is rejected.
Bss Sd/- JUDGE