1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.695 OF 2008 WITH WRIT PETITION NO.841 OF 2008 The Mumbai International Airport Authority Pvt.Ltd. .. Petitioner Versus Airports Authority of India and Ors. .. Respondents Mr.Rafiq Dada, Senior Advocate with Mr.B.Saraf, Bhavik Manek and Mitra Das i/b. Wadia Gandhy & Co. for petitioner Mr.S.K.Talsania, Senior Advocate with Mr.Siddique, Mayur Shetty i/b. M/s.M.V.Kini & Co. for respondent No.1 Ms.Monica Sakharani for respondent No.2 in W.P.841/08 Mr.A.Grover with Ms.Jane Cox for respondent No.2 in W.P.695 of 2008. CORAM : S.C.DHARMADHIKARI, J. DATE : 25th April 2008 ORAL JUDGEMENT:- . Rule. Respondents waives service. By consent, rule made returnable forthwith. Heard 2 parties. 2. By these petitions under Article 226 of the Constitution of India, petitioners are challenging a common order dated 5th February 2008 impleading them as parties to the Reference pending before the Central Government Industrial Tribunal Mumbai (CGIT for short) being Ref.No.CGIT-2/44 of 2007 and 2/56 of 2007. They are also aggrieved by rejection of their application to recall or review the order dated 5th February 2008. The order on applications in that behalf has been passed on 28th February 2008. Both orders are thus under challenge. 3. The petitioners claim to be a Joint Venture Company registered and incorporated in March 2006 under the Indian Companies Act, 1956. The Joint Venture partners are GVK led consortium and the Airport Authority of India, statutory authority constituted under the Airport Authority 3 of India Act, 1994. The petitioners have stated that respondent No.1 Airport Authority of India (AAI for short) holds 26% of the shares in this joint venture company whereas GVK holds 74% shares. 4. The petition proceeds on the basis that the AAI is constituted for establishing and operating Airports through out India and other functions and activities connected therewith. Respondent No.2 in each of these petitions are Unions registered under the Trade Union Act representing persons who claim to be direct employees of AAI. The employees urge that they are not contract labourers but employees of AAI. 5. It is stated that in terms of statutory enactment the AAI has powers to involve other agencies for operation, development and management of Airports. Accordingly, as far as Mumbai Airport is concerned, the same is now 4 placed under the charge of the above joint venture for operations and management. There is an agreement entered into in that behalf on 4th April 2006 between the petitioner and respondent No.1 AAI. The period stipulated under the Agreement is 30 years. It is not necessary to refer to the contract between the petitioners and AAI in further details save and except for a limited purpose as pointed out hereinafter. 6. It is the case of the petitioners that they received a show cause notice on 1st August 2007 from the CGIT calling upon them to show cause as to why they should not be impleaded as a party in Ref.CGIT No.2/27/2003. In that reference the Union had filed an application for impleading the petitioner as party. The case of the petitioners that they filed preliminary reply to this application on 5th October 2007 and, thereafter, a detailed reply on 23rd October 2007. They opposed the prayer in that 5 application. Even AAI filed its reply along with some documents. Thereafter, the application was placed before the concerned Presiding Officer of the CGIT. In fact it was placed on 11th February 2008. However, on that date they were informed that in the References which are subject matter of these petitions, an application for their impleadment was made by AAI which is already allowed by order dated 5th February 2008 and they have been impleaded as parties in this reference. Consequently, in the reference, where the show cause notice was issued, the petitioners have been impleaded as party. 7. The CGIT, therefore, called upon the petitioners to take further steps in pursuance of the impleadment. However, the petitioners were surprised that they had been impleaded in the subject reference without any opportunity being granted to them to raise their objections nor hearing them on the issue of their joinder. It 6 is in such circumstances that they approached the concerned CGIT and obtained copies of the orders and the applications. They also obtained a copy of Roznama. The petitioners were advised to file an application seeking recall or review of the order dated 5th February 2008. Accordingly, a review/recall application was filed which was placed before the concerned Presiding Officer. Although none opposed the application, the Presiding Officer by the order dated 28th February 2008 proceeded to reject the application for recall/review. While doing so, the learned Presiding Officer observed that the petitioner came into picture by virtue of the agreement dated 4th April 2006. The entire Chatrapati Shivaji International Airport has been handed over to the petitioners. As per the Arrangement between petitioners and AAI, they have to absorb 60% of the permanent employees of AAI. Hence, it is necessary that petitioners are impleaded as parties and heard in the matter. In the opinion 7 of the learned Presiding Officer, the petitioners have stepped into the shoes of AAI and, therefore, the order dated 5th February 2008 has been passed. Apart from the fact that such an order is not liable to be reviewed, the learned Presiding Officer observed that the terms of reference would necessitate the presence of petitioners as parties. Proceeding, thus, he has rejected the application for recalling the orders joining the petitioners as parties to the reference. 8. These orders are subject matter of challenge in these petitions. 9. Mr.Dada, learned Senior Counsel for petitioners submits that the impugned order is ex facie erroneous and untenable in law. He submits that the learned Presiding Officer has failed to apply his mind to the contents of the application for recalling his earlier orders. He submits 8 that the petitioners have absolutely no connection or nexus with the reference. If the terms of reference are perused, it is apparent that the dispute which has been referred for adjudication to the CGIT pertains to the status of concerned employees with AAI. In other words, whether the action of the AAI in engaging the contractors and getting the work done through them means that the subject employees cease to be the employees of AAI or whether the master - servant relationship subsists as between them are the issues for determination. The relief is claimed on the basis that the contracts entered into by AAI with contractors are sham and bogus. It is that issue which is referred for adjudication. Whether employees are contract labourers or employees of the principal employer AAI or whether they are employees of the contractors engaged by AAI are matters of arising for decision and adjudication. There is no question of any relationship of employer employee 9 arising between the petitioners and subject employees. The issues which are referred for adjudication arise out of disputes between the Union and AAI. These disputes are because of the demands which have been raised by the employees/unions against the AAI. The relief of permanency and continuity in service so also relationship is something between such employees and AAI. At this stage, the petitioners are nowhere in the picture. It is not the case of the union that the petitioners have engaged any contractors and that the relationship between the petitioners and the employees is the subject matter of reference. Mr.Dada’s submission is that the lis, if any, is between the employees and the respondent No.1 AAI. When contract is between AAI and contractors engaged by it, there is no privity insofar as the workers and the petitioners. In such circumstances, the recall application ought to have been allowed and the orders quashed and set aside. The orders are ex 10 parte and passed without hearing the petitioners and, therefore, an application for recall is maintainable. yet, the Presiding Officer proceeded on the basis that petitioners are seeking review of his earlier order and further their being no power of review, the application is not maintainable. On merits as well the impugned order is untenable because the learned Presiding Officer has failed to apply his mind to section 18(3)(b) of the I.D.Act and the general principles applicable while deciding the issue of Joinder of parties. 10. Mr.Dada has taken me through the agreement between the petitioners and AAI. He submits that the workmen are fully protected. He submits that the petitioners and AAI are bound by the agreement. He has taken me through Chapter V & VI of the agreement. He has also taken me through clauses 6.1, 6.1.1 and 6.1.2 (i) so also 6.1.4. He submits that the clauses read together 11 and as a whole would sufficiently protect the interest of the workmen. In such circumstances, assuming that the Final Award is in favour of workmen, they need not have any anxiety. 11. His further submission is that the Joinder has resulted in confusion and multiplicity of proceedings. He submits that the Presiding Officer merely referred to the agreement but did not peruse it nor applied his mind to the terms thereof. The Presiding Officer does not hold that the petitioners are successors in Interest of AAI. In such circumstances, the petitioners were not necessary or proper parties. He submits that the order has far reaching consequences. The terms of reference are enlarged by such an order. Now the petitioners are roped in for an adjudication with which they have no connection. In other words, the entire adjudication, to which they are not connected, is foisted upon them. It is likely that AAI may not 12 oppose the demand of the Union or it may not lead evidence. In such circumstances, the petitioners are dragged in the controversy between AAI and its workmen. In such circumstances, the impugned order be quashed and set aside. 12. In support of his submissions, Mr.Dada relies upon the decision of the Hon’ble Supreme Court reported in 1964 F & L Reports Vol.(9) Page 101 (Hochtief Gammon Vs. Industrial Tribunal, Bhubaneshwar, Orissa & Ors.). He has also relied upon a decision of Calcutta High Court reported in 1997 (2) CLR 503.(Parry’s (Cal) Employees Union Vs. Judge, Second Industrial Tribunal, West Bengal, Calcutta & Ors.) 13. On the other hand, Mr.Talsania, learned Senior Counsel appearing for AAI submits that the order under challenge is an interlocutory order. The main references are pending. It is not as if the petitioners have no opportunity to urge that 13 they are not bound by the terms of reference or that even if the reference is to be allowed, they are not liable for consequences thereof. All contentions including maintainability are open for being raised. There is no prejudice to the petitioners inasmuch as mere joinder does not mean that they are straight away liable. He submits that the petitioners are not rank outsiders or dis-interested persons. They, therefore, cannot urge that there is no nexus or connection with the references. He submits that there are 17 references involving about 600 employees which are pending. There is imvolvement of petitioners insofar as administration and management of the Airport. It is not as if AAI is out of picture but it is a matter which will be gone into after all materials are produced before the Presiding Officer. At this stage, petitioners cannot urge that their joinder is impermissible in law or not tenable. He has invited my attention to section 14 18(3)(b) and (c) of I.D. Act and submitted that presence of petitioners is necessary for effective and complete adjudication. He submits that even the conduct of petitioners is relevant factor. They have entered into fresh contracts and the very employees are being continued by them. In such circumstances, merely urging that they came into picture later on is of no consequence, So also a reference to the terms and the nature of the dispute by the petitioners does not carry their case any further. He submits that the final direction cannot be effective and complete unless the petitioners are before CGIT. He has contended that nature of duties of the employees is operational. They are loaders, technicians etc. In such circumstances, this petition is not maintainable and deserves to be dismissed. 14. Ms.Cox, learned Counsel appearing for respondent No.2, Union in Writ Petition No.695 of 15 2008 submits that the workers have a genuine apprehension. She submits that once AAI has taken a stand that the management and administration of the Airport is handed over to the petitioners and some acts of petitioners, including, preventing entry of the concerned employees at the terminal/airport, gave them reason enough to suspect that their employment is in jeopardy. Hence, the application for joinder of petitioners was made and rightly allowed. There is no reason to interfere with the impugned order at this stage. She urges that no technical ground or objections should be available to thwart implementation and execution effective of the award. For the award to be completely functional so also its enforcement and execution if it is thought necessary to join the petitioners as parties, then, such discretionary orders should not be interfered with in exercise of the jurisdiction under Article 226 of the Constitution and only because another view is 16 possible. In such circumstances and in the interest of workmen, these petitions deserve to be dismissed. She has invited my attention to the Annexures to an affidavit which has been filed by respondent No.2 in Writ Petition No.695 of 2008, which is a office note dated 3rd April 2007. She submits that this is ground enough for the employees to suspect the intentions of the petitioners and AAI. For all these reasons, the petitions be dismissed. 15. For properly appreciating the rival contentions, a reference can be made to section 18 of the Industrial Disputes Act, 1947. The section reads thus:- "18. Persons on whom settlements and awards are binding:- (1) A settlement arrived at by an agreement between the employer and workman otherwise than in the course of conciliation proceeding 17 shall be binding on the parties to the agreement. (2) Subject to the provisions of sub-section (3) an arbitration award which has become enforceable shall be binding on the parties to the agreement who referred the dispute to arbitration; (3) A settlement arrived at in the course of conciliation proceedings under this Act or an arbitration Award in a case where a notification has been issued under sub-section (3-A) of section 10-A or an award of a Labour Court, Tribunal or National Tribunal which has become enforceable shall be binding on:- (a) All parties to the industrial dispute; 18 (b) All other parties summoned to appear in the proceedings as parties to the dispute, unless the Board, Arbitrator, labour court, Tribunal, national Tribunal as the case may be, records the opinion that they were summoned without proper cause; (c) Where a party referred to in clause (a) or clause (b) is an employer, his heirs, successors or assigns in respect of the establishment to which the dispute relates; (d) Where a party referred to in clause (a) or clause (b) is composed of workmen, all persons who were employed in the establishment or part of the establishment, as the case may be, to which the dispute relates on the date of the dispute and all persons who 19 subsequently become employed in that establishment or part." 16. A bare perusal of the same would reveal that although it is entitled as "Persons on whom settlement and awards are binding", yet, subsection 3 of the same would point towards a power in the labour court, tribunal or national tribunal as the case may be to implead parties during the course of reference. Thus, it is not a power restricted to summoning parties in the proceedings. The words "all other parties summoned to appear in the proceedings as parties to the dispute" would indicate that there is implied power in the Tribunal to add or join parties. 17. As early as in 1964, a Three Judge bench of the Supreme Court while considering some what identical controversy has observed thus:- 20 ". ... That is why the appellant moved the the Orissa High Court under Article 226 of the Constitution and prayed that the order passed by the Tribunal refusing to deal with the matter should be set aside and M/s.Hindustan Steel Ltd. should be joined as a party to the reference before it. This writ petition, however, failed because the High Court took the view that it was premature. The High Court observed that the Industrial Tribunal had not yet passed a final order under Section 18(3)(b) of the Act, and so, without expressing any opinion on the merits of the controversy between the parties, the High Court treated the application as incompetent because it was premature. Against this decision, the appellant has come to this Court by special leave and on his behalf, Mr.Chatterji has contended 21 that the Industrial Tribunal has jurisdiction to add a party to the proceedings before it and that on merits, M/s.Hindustan Steel Ltd. should be added as a necessary party. That is how the main question which arises for our decision is to determine the scope and effect of the provisions of Section 18(3)(b) of the Act." ". Reverting then to the question as to the effect of the power which is implied in Section 18(3)(b), it is clear that this power cannot be exercised by the Tribunal so as to enlarge materially the scope of the reference itself, because basically the jurisdiction of the Tribunal to deal with an industrial dispute is derived solely from the order of reference passed by the appropriate Government under section 10(1). What the 22 Tribunal can consider in addition to the disputes specified in the order of reference, are only matters incidental to the said disputes; and that naturally suggests certain obvious limitations on the implied power of the Tribunal to add parties to the reference before it, purporting to exercise its implied power under section 18(3)(b). If it appears to the Tribunal that a party to the Industrial dispute named in the order of reference does not completely or adequately represent the interest either on the side of the employer, or on the side of the employee, it may direct that other persons should be joined who would be necessary to represent such interest. If the employer named in a reference does not fully represent the interests of the employer as such, other persons who are interested in the undertaking of the 23 employer may be joined. Similarly, if the unions specified in the reference do not represent all the employees of 5the undertaking, it may be open to the Tribunal to add such other unions as it may deed necessary. The test always must be, is the addition of the party necessary to make the adjudication itself effective and enforceable? In other words, the test may well be would the non joinder of the party make the arbitration proceedings ineffective and unenforceable? It is in the light of this test that the implied power of the Tribunal to add parties must be held to be limited." ". This question has been considered by the Madras High Court in two reported decisions. In P.G.Brookes, Receiver appointed by the Trustees for the 24 mortgagee debenture holders of the Madras, Electric Tramways (1904) Ltd. Vs. The Industrial Tribunal Madras and Ors. (1) the Division Bench of 4the said High Court has held that Section 18(b) by necessary implication gives power to the Tribunal to add parties. It can add necessary or proper party. He need not be employer or the employee. In 5that particular case, the party added was the Receiver and it was found that unless the Receiver was added as party to the reference proceedings, the adjudication itself would become ineffective. In the words used by the judgement, the party added was not a rank outsider or a disinterested spectator, but was a Receiver who was vitally concerned with the proceedings before the Tribunal and whose presence was necessary to make the ultimate award effective, valid and 25 enforceable." ". In Radhakrisnna Mills Ltd. Peelamedu Coimbatore Dt. Vs. The Special Industrial Tribunal, Madras and Ors. a single Judge of the Madras High Court followed the earlier decision, though in this case, a party that was summoned by the Tribunal has been added to the reference by the State Government under section 10(5) of the Act." ". In Anil Kumar Upadhaya Vs.P.K.Sarkar and Ors. a learned Single Judge of the Calcutta High Court has accepted the same view. In that case, the Trustees of the Provident Fund in question who had not been impleaded originally to the reference were summoned by the Tribunal and the Court held that in the absence of the Trustees, the award 26 would have become nugatory. It would be noticed that in all these decisions, the implied power of the Tribunal to summon additional parties in the reference proceedings is confined only to cases where such addition appeared to be necessary for making the reference complete and the award effective and enforceable. Such a power cannot be exercised to extend the scope of the reference and to bring in matters which are not the subject matter of the reference and which are not incidental to the dispute which has been referred." ". That takes us to the question as to whether the appellant is justified in contending that M/s.Hindustan Steel Co. Ltd. is a necessary party to the present proceedings before the Industrial Tribunal and should, therefore, be added 27 as such. Mr.Chatterji has raised two contentions in support of his plea that M/s.Hindustan Steel Ltd. is a necessary party. The first contention is that if it is ultimately found that the respondents’ claim for bonus for the relevant year is well founded, as a result of the contract between the appellant and M/s.Hindustan Steel Ltd., the liability to pay the said bonus would rest with the said concern and not with the appellant. The appellant, according to Mr.Chatterji, is a firm constituted only for a single venture for undertaking works at Rourkela; it has been engaged by the said concern of M/s.Hindustan Steel Ltd. as its agent and in that behalf an agreement has been executed between the parties. Mr.Chatterji referred us to some of the relevant clauses of this agreement in support of 28 his plea that the liability for bonus, if established by the respondents against the appellant, would be not the appellant’s but of M/s.Hindustan Steel Ltd. We do not propose to examine the merits of this contention, because we are satisfied that even if Mr.Chatterji’s contention is well founded by reference to the relevant clauses of the agreement between the parties, that cannot make M/s.Hindustan Steel Ltd. a necessary party within the meaning of Section 18(3)(b). This contention raises an entirely different dispute between the appellant and its alleged principal and such a dispute would be wholly foreign to the industrial dispute which has been referred to the Tribunal for its adjudication." ". The next contention raised by 29 Mr.Chatterji is that M/s.Hindustan Steel Ltd. is a necessary party because it is the said concern which is the employer of the respondents and not the appellant. In other words, this contention is that though in form the appellant engaged the workmen whom the respondent union, represents, the appellant was acting as the agent of its principal and for adjudicating upon the industrial dispute referred to the Tribunal by the State of Orissa, it is necessary that the principal, viz., M/s.Hindustan Steel Ltd. ought to be added as a party. In dealing with this argument, it is necessary to bear in mind the fact that the appellant does not dispute the respondent Union’s case that the workmen were employed by 4the appellant. It would have been open to the