Unequivocal Admission of Wage Arrears Claims Recognized, Tribunal’s Award Upheld: Delhi High Court

07 May 2024 8:19 AM

By: Admin

In a significant ruling, the Delhi High Court, led by Hon’ble Ms. Justice Rekha Palli, has upheld the decision of the Arbitral Tribunal concerning the wage arrears claims between Air India Limited and its employee unions. The court dismissed the petitions filed under Section 34 of the Arbitration and Conciliation Act, 1996, challenging the arbitral awards that favored the respondents.

Justice Palli, in her landmark judgment, recognized the “unequivocal admission” of the dues by the petitioner. In her words, “the Management’s stance in the documents was unambiguous and amounted to an unequivocal admission of the claim for wage arrears,” thereby dismissing the petitioner’s contention that these were mere recommendations to the Union of India.

The court meticulously navigated through the challenges posed by the Presidential Directives and Settlement Memoranda, affirming the Tribunal’s authority to adjudicate the quantum of arrears payable from January 1, 1997, to December 31, 2007. The petitions, which argued that the Tribunal had exceeded its mandate and the legality of the Presidential Directive, were thus rejected.

The judgment further delved Into the legitimacy of the Presidential Directive issued under Section 9 of the Air Corporations (Transfer of Undertakings and Repeal) Act, 1994, and highlighted the administrative nature of such directives. It was stated that these are instructions from the Administrative Ministry and are subject to legal scrutiny.

Moreover, the court upheld the Tribunal’s direction for the payment of compound interest on the entire adjudged amount, including interest, aligning with the principles set forth in the Hyder Consulting (UK) Ltd. V. State of Orissa and UHL Power Company Ltd. V. State of Himachal Pradesh cases.

The decision has been welcomed by the employee unions, who have been in a long-standing dispute with the airline over their rightful claims. The representatives of the respondents, Mr. Jay Savla and his team, have expressed satisfaction with the court’s reasoning and the outcome of the judgment.

Date of Decision: 08.11.2023

AIR INDIA LIMITED VS ALL INDIA AIRCRAFT ENGINEERS ASSOCIATION