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2015 Supreme(P&H) 1791

PUNJAB AND HARYANA HIGH COURT
Rakesh Kumar Jain, J.
Federation of Indian Airlines and others - Petitioners
Versus
Union of India and others - Respondents
CWP No. 18628 of 2015 (O&M)
Decided On : 24-09-2015

Advocates Appeared:
For the Petitioners: M.L. Sarin, Nitin Sarin, Ritesh Aggarwal.
For the Respondents: Arun Gosain, Varun Issar, Chetan Mittal, Jagdish Machanda, Rajansh Thukral, V. Ramswaroop, P.P. Chahar.

The Regulations of 2007 permitted self-handling by airlines at non-metro airports, and the entry was restricted to the bona-fide whole time employees of the airlines or ground handling agencies specifically permitted by the AAI. The 13 AVSEC functions specified by the BCAS were to be performed by the airlines' bona-fide whole time employees.

Headnote:

Ground Handling Services - Aviation Industry - Aircrafts Act, 1934, Airports Authority of India Act, 1994, Civil Aviation Requirement, Section-3-Air Transport, Series ‘C’, Part II - The court set aside the contract given to a ground handling agency, holding it illegal, arbitrary, and unconstitutional. The airlines were permitted to self-handle ground handling services, except for the 13 AVSEC functions specified by the BCAS, which were to be performed by the airlines' bona-fide whole time employees.

Fact of the Case:

The petitioners, comprising major scheduled air operators and companies engaged in providing Scheduled Air Transport Services, challenged the validity of communications requiring them to undertake ground handling functions exclusively through a specific agency at Chandigarh International Airport. The history of ground handling services, regulations, and the privatization of the aviation industry in India were discussed.

Finding of the Court:

The court found the actions of the respondents in awarding the ground handling contract to be illegal, arbitrary, and unconstitutional. It set aside the impugned communications and allowed the airlines to self-handle ground handling services, except for the 13 AVSEC functions specified by the BCAS, which were to be performed by the airlines' bona-fide whole time employees.

Issues: The main issue was whether the petitioners could be denied self ground handling services at non-metro airports, and whether the contract awarded to a specific ground handling agency was legal and constitutional.

Ratio Decidendi: The court held that the Regulations of 2007 permitted self-handling by airlines at non-metro airports, and the entry was restricted to the bona-fide whole time employees of the airlines or ground handling agencies specifically permitted by the AAI. The court also emphasized that the 13 AVSEC functions specified by the BCAS were to be performed by the airlines' bona-fide whole time employees.

Final Decision: The court set aside the contract given to a ground handling agency, holding it illegal, arbitrary, and unconstitutional. The airlines were permitted to self-handle ground handling services, except for the 13 AVSEC functions specified by the BCAS, which were to be performed by the airlines' bona-fide whole time employees.

JUDGMENT :

Rakesh Kumar Jain, J.

Petitioner No. 1 is a society comprising of major scheduled air operators of India (airlines), whereas petitioners No. 2, 4, 6, 8 and 10 are the companies engaged in the business of providing Scheduled Air Transport Services and petitioners No. 3, 5, 7 and 9 are the Shareholders/Directors of the respective companies. Respondent No. 2-Directorate General of Civil Aviation (hereinafter referred to as the "DGCA") is the apex regulatory body of the Ministry of Civil Aviation (hereinafter referred to as the "MoCA"), tasked with the responsibility to implement, control and supervise the air-worthiness and related aspects of the aviation industry in India. Respondent No. 3-Airports Authority of India (hereinafter referred to as the "AAI") is a statutory body under the Airports Authority of India Act, 1994 (hereinafter referred to as the "Act"), who owns and manages the Airports in the country as the lands of all airports in the country vest with the said authority. Respondent No. 4-Chandigarh International Airport Limited (hereinafter referred to as the "CHIAL") is a joint venture company of the AAI, the State of Punjab through GMADA and the State of Haryana through HUDA, as all the three have agreed to operate and maintain the Chandigarh International Airport under the auspices of AAI. Respondent No. 7-Air India Air Transport Services Ltd. (hereinafter referred to as the "AIATSL") is a pubic sector undertaking and a subsidiary of M/s Air India Limited, engaged in the business of providing ground handling services.

2. The petitioners have challenged the validity of letter dated 04.06.2015 (Annexure P-19); e-mail dated 01.07.2015 (Annexure P-20) and email dated 28.07.2015 (Annexure P-21) collectively (hereinafter referred to as the "impugned communications") as per which the CHIAL has required all the petitioner-airlines to contact AIATSL to undertake their ground handling functions and by the award letter dated 04.06.2015, the CHIAL has refused to allot any space in the Chandigarh International Airport to any of the airlines to undertake ground-handling activities. Therefore, through the impugned communications, the CHIAL has sought to coerce the petitioners-airlines to carry out their ground handling operations at Chandigarh International Airport exclusively through respondent No. 7- AIATSL.

3. The brief history in regard to provision of ground handling services is that the Aircrafts Act was enacted in the year 1934 for the regulation of aircraft and aviation related services in India and the Aircrafts Rules, 1937 were subsequently notified in which Rule 92 provides for the ground handling services, which reads thus :

"Ground Handling Services. - The licensee shall, while providing ground handling service by itself, ensure a competitive environment by allowing the airline operator at the airport to engage, without any restriction, any of the ground handling service provider, who are permitted by the Central Government to provide such services.

Provided that such ground-handling service provider shall be subject to the security clearance of the Central Government."

4. The Central Government also notified the International Airport Authority of India (General Management, Ground Handling of Air Transport Services) Regulations, 1984, followed by the National Airports Authority (General Management, Entry for Ground Handling of Air Transport Services) Regulations, 1989 and, thereafter, the Civil Aviation Requirement, Section-3-Air Transport, Series ‘C’, Part II dated 01.03.1994, which was effective forthwith w.e.f. 01.03.1994 in regard to minimum requirement of grant of permit to operate scheduled passenger air transport services, in which the `scheduled air transport service' has been defined as "an air transport service undertaken between the same two or more places and operated according to a published time table or with flights so regular or frequent that they constitute a recognizably systematic series, each









































































































































































































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