Supreme Court of India

AIR INDIA LTD. AND ORS.versusVISHAL KAPOOR AND ORS.

Citation: 2005 INSC 452
Decided: 28 September 2005
Disposal: Appeal(s) allowed
Bench: RUMA PAL

Holding

The Supreme Court held that the High Court erred and the seniority dispute, involving factual controversies of alleged fraud, must be referred to an Industrial Tribunal under the Industrial Disputes Act.

Summary

The dispute concerned seniority of Air India co‑pilots: whether it should be based on the date a pilot obtained an Air Lines Transport Pilot (ALTP) licence or on the date of entry as a co‑pilot with only a Commercial Pilot Licence (CPL). The ‘Adhikari group’ (ex‑IAF/Navy pilots with ALTP) challenged Clause 7(C) of a 1998 settlement with the Indian Pilots Guild, alleging fraud and undue influence, while the CPL holders relied on that clause. The Bombay High Court dismissed the challenge, holding the settlement binding under Section 18(3) of the Industrial Disputes Act and that the matter must be decided by an industrial tribunal. The Supreme Court held that the High Court erred: the allegations raised a serious factual controversy, making the writ jurisdiction inappropriate, and the dispute must be referred to an Industrial Tribunal under the Industrial Disputes Act. The appeal was allowed and the Court directed the appropriate Government to refer specific questions to the Tribunal, with an interim arrangement for command training.

Issues considered

Whether the High Court correctly rejected the preliminary objection that the dispute should be heard under the Industrial Disputes Act rather than by writ jurisdiction.
Whether the allegations of fraud and misrepresentation concerning the 1998 settlement give rise to a disputed question of fact.
Whether withdrawal of a complaint under Section 33‑A bars the ‘Adhikari group’ from raising a fresh industrial dispute.
Whether the 1998 settlement is a final settlement under Section 18(3) of the Industrial Disputes Act and can be set aside on grounds of fraud, undue influence, etc.
Whether seniority of co‑pilots should be determined by the date of obtaining an ALTP licence or by the date of entry as a co‑pilot.

Legislation cited

Aircraft Rules, 1937s. Schedule III
Industrial Disputes Act, 1947s. 10(1), s. 12(2), s. 12(4), s. 12(5), s. 18(3), s. 2(k), s. 33(1)(a), s. 33-A

Subjects

seniorityco‑pilotsAir IndiaIndustrial Disputes Actsettlementfraudwrit jurisdictionALTP licenceCPLindustrial tribunalSection 18(3)Section 33-A

Judgment

A AIR INDIA LTD. AND ORS.
v.
VISHAL KAPOOR AND ORS.

SEPTEMBER 28, 2005

B [RUMA PAL, DR. AR. LAKSHMANAN AND C.K. THAKKER, JJ.)

Labour Laws:

Industrial Disputes Act, 1947: Sections 2(k), 10(1), 12(2), 12(5), 18(3).
C 33(J)(a) and 33-A.
Seniority of pilots employed by Air !ndia-lnter-se seniority between
Air Lines Transport Pilot Licence (ALT?) and Commercial Pilot's licence
holders~The bone of contention was whether seniority was to be calculated
D from the day a pilot got an ALT? licence or from the day the pilot entered
service with only a CPL-According to Air India, the 'Adhikari group' who
were all ex-Indian Air Force or Navy Pilots and holders of ALT? licences
were entitled to seniority over pilots holding CPL because they had obtained
an ALTP prior to the CPL holders-In 1998 a settlement was arrived at
between the Indian Pilots' Guild and Air lndia-Annexure Din Clause 7(C)
E of the 1998 settlement placed CPL holders at serial Nos. 173 to 178 and the
'Adhikari group' against serial Nos. 205 to 218- 'Adhikari group' filed writ
petition challenging Clause 7(C) of the 1998 settlement-High Court
dismissed the petition holding that the I 998 settlement was binding upon all
workmen in view of S. 18(3) of the Industrial Disputes Act-ft was also held
F that such a challenge could not be the subject-matter of challenge before the
High Court in its writ jurisdiction-Correctness of-Held: A disputed question
of.fact would normally arise when a petitioner puts forward a case on facts
which are controverted by the respondents-The CPL holders rested their
case on Clause 7(C) of the 1998 settlement-The 'Adhikari group' pleaded
that the settlement was vitiated by fraud and, therefore, the CPL holders
G should have been left to pursue their grievance before the appropriate forum
under the Industrial Disputes Act-The High Court, therefore, was not right
in rejecting the preliminary objection of the 'Adhikari group '-Disputes
between the 'Adhikari group' and the CPL holders formulated-Appropriate
Government directed to refer the disputes for adjudication by the appropriate

H 670
AIR INDIA LTD. v. VISHAL KAPOOR 671
Industrial Tribunal-Aircraft Rules, 1937, Sch. III. A
The first appellant provided international air transport services. Its
aircrafts were operated by pilots-in-command (PIC) and co-pilots. Unless a
pilot had an Air Lines Transport Pilot Licence (ALTP), he could not qualify
as a PIC. The respondents were two groups of co-pilots, namely, respondents
Nos. 1to6 (writ petitioners) and respondents Nos. 7 to 12 ('Adhikari group'). B
The bone of contention was whether seniority as a co-pilot was to be calculated
from the day a pilot got an ALTP or from the day the pilot entered the service
of the first appellant with only a CPL. According to the first appellant, the
'Adhikari group' who were all ex-Indian Air Force or Navy Pilots and holders
of ALTP licences with 500 flying hours as PIC were entitled to seniority over C
the writ petitioners because they had obtained an ALTP prior to the writ
petitioners. In 1992, the writ petitioners who were holders of CPL licences
raised a demand asking for seniority from the date of their joining the first
appellant. In 1998 a settlement was arrived at between the Indian Pilots' Guild
and the first appellant. Annexure 'D' in Clause 7(6} of the 1998 settlement
placed the writ petitioners at serial Nos. 173 to 178 and the 'Adhikari Group' D
against serial Nos. 205 to 218.

The 'Adhikari Group' filed a writ petition before the High Court
challenging Clause 7(C) of the 1998 settlement. The High Court dismissed
the writ petition holding that the 1998 settlement was binding upon all
workmen in view of the express provisions of Section 18(3) of the Industrial E
Disputes Act, 1947. The High Court further held that such a challenge could
not be the subject-matter of challenge before the High Court in its writ
jurisdiction. The' Adhikari Group' then filed a complaint before the National
Industrial Tribunal under Section 33-A of the Industrial Disputes Act, 1947,
which was later withdrawn. Subsequently, the 'Adhikari Group' raised a p
dispute relating to the fixation of their seniority under the 1998 settlement
under Section 12 of the 1947 Act before the Conciliation Officer. The
'Adhikari Group' had claimed that senior officers of the Guild and the first
appellant had fraudulently agreed to Clause 7(C) of the 1998 settlement so
that their children who were CPL holders were given undue benefit.
G
The High Court allowed the writ petition filed by the writ petitioners
rejecting the preliminary objection of the' Adhikari Group' viz. that the writ
petitioners should have been left to pursue their grievance relating to the
breach of Clause 7(C) of the 1998 settlement before the appropriate forum
u.nder the Industrial Disputes Act, 1947. Hence the appeal.
H
672 SUPREME COURT REPORTS [2005] SUPP. 3 S.C.R.

A Allowing the appeal, the Court

HELD: 1. The High Court erred in rejecting the preliminary obJjection
of respondents 7 to 12 viz. that the writ petitioners should have been left to
pursue their grievance relating to the breach of Clause 7(C) of the 1998
settlement before the appropriate forum under the Industrial Disputes Act,
B 1947. There was a serious factual controversy as was noted by the High Court
itself. It had been contended by the 'Adhikari Group' that the 1998 settlement
was vitiated by fraud and malafideon the part of the office bearers of the Indian
Pilots Guild and sc,ne Officers of the first appellant. The claim of the
'Adhikari Group' is that the senior officers of the Guild and the first appellant
C fraudulently agreed to Clause 7(C) of the 1998 settlement so that their sons
and daughters who were CPL holders were given undue bendit in deviation
from the established requirements and practice of the first appellant. Such
allegations if proved would be sufficient to set aside the 1998 settlement
insofar as it affected the seniority of the 'Adhikari Group'. [686-D-E-F[

D Herbertsons Ltd v. The Workmen of Herber/sons Ltd, [1976[ 4 SCC 736,
KCP Ltd. v. Presiding Officer, [1996[ IO SCC 446 and National Engineering
Industries ltd. v. State of Rpjasthan, 12000] I SCC 371, relied on.

2. A disputed question of fact will normally arise when a petitioner pus
forward a case on facts which are controverted by the respondents. This is
E naturally so, as it cannot be expected that the petitioner will of his, her or its
own say that the facts forming the basis of the claim are disputed. Although
it may happen that the Court on a scrutiny of the nature of the claim made in
the petition may come to a conclusion that the factual issues raised are ex
facie controversial and decline, in limine, to exercise jurisdiction under Article
F 226, nevertheless the controversy usually surfaces after the respondents have
had an opportunity of giving their version of the matter. That was what
happened in the present case. The writ petitioners rested their case on Clause
7(C) read with Annexure D to the 1998 settlement. The respondents pleaded
that the settlement was vitiated by fraud. Obviously, the burden of proving this
would be on the respondents. No Court or tribunal has tested the allegations
G made by the' Adhikari Group' on merits till today. The High Court, shut out
the all~gations altogether for two reasons. The first reason was that it would
amount to entertaining a separate cause of action. The conclusion was
erroneous as it was based on confusion between onus of proof and cause of
action. (687-B-C-D]

H ABL International ltd. v. Export Credit Guarantee Corpn. of India,
AIR INDIA LTD. v. VISHALKAPOOR 673
1200413 SCC 553 and Life Insurance Corporation of India v. D.J. Bahadur, A
1198111 sec 315, relied on.

3.1. It is nobody's case that the complaint of the 'Adhikari Group' under
Section 33-A of the Industrial Disputes Act, 1947 was legally maintainable.
In fact both the first appellant and the Guild had opposed the complaint on
this ground. Section 33-A allows a complaint to be filed in a pending reference B
where an employer contravenes the provisions of Section 33 of the 1947 Act
during the pendency of the proceedings pursuant to a reference under Section
10(1) of the 1947 Act The relevant portion of Section 33(1 )(a) prohibits an
employer from altering, to the prejudice of the "workmen concerned in such
dispute", the conditions of service applicable to them immediately before the C
commencement of the proceeding. There was no pending proceeding relating
to any dispute between Air India and its workmen in which the' Adhikari
Group' could have filed a complaint under Section 33-A. The dispute pending
before the Tribunal did not relate to a dispute between the first appellant and
its workmen. It related to a dispute between the Indian Airlines and its
workmen basically on the question whether the latter were entitled to the same . D
terms and conditions of service as the employees of the first appellant.
1689-B-EI

3.2. In these circumstances the withdrawal of the complaint under
Section 33A did not debar the Adhikari group from raising a fresh industrial
dispute. That is what the Adhikari group has sought to do. It approached the E
Conciliation Officer. The claim is said to have been investigated by the
Conciliation Officer, whose duty it is to try and affect a fair and amicable
settlement of disputes under Section 12(2) of the 1947 Act. A recommendation
was made by the Conciliation Officer to the first appellant. Since the
recommendation for conciliation has been accepted by the management of t:.e F
first appellant, there was no question of the Conciliation Officer reporting a
failure of settlement under Section 12(4) to enable the appropriate Government
to make a reference to an Industrial Tribunal under Section 12(5). Whether
by this process, Clause 7(C) and Annexure D to the 1998 settlement could be
altered is again a question requiring resolution by the appropriate forum under
the 1947 Act. 1689-F-H; 690-AI G
4. Admittedly, the 1998 Settlement was not filed as envisaged .nor was a
consent award obtained although this point was not raised in the writ petition.
But the issue has been concluded against respondents 7 to 12 by the order in
the earlier writ petition which said that the 1998 settlement was a settlement
under Section 18(3) of the 1947 Act. Nevertheless, a fresh industrial dispute H
674 SUPREME COURT REPORTS [2005] SUPP. 3 S.C.R.

A within the meaning of the phrase in Section 2(k) of the 1947 Act has arisen
at least between the CPL Holders and the 'Adhikari Group' as to whether the
1998 Settlement despite being under Section 18(3), was invalidated because
of the alleged circumstances under which it was arrived at. Additionally, the
'Adhikari Group' may at least contend that the subsequent modifications to
B Clause 7(C) of the 1998 settlement modifying and ultimately doing away with
the requirement of an ALTP was not valid and did not form part of the
settlement under Section 18(3). All these disputes are appropriately
adjudicatable by an Industrial Tribunal under the 1947 Act.1690-E-G]

5. The High Court's decision allowing the writ petition was based on
C reasons which cannot be sustained. Consequently, its conclusions that the
issue of seniority between the respondents 7 to 12 and the writ petitioners
was concluded was also erroneous. Therefore, the question whether the letters
issued by respondent No. 3 cancelling the letters for command training issued
to the writ petitioners could have been validly issued is, along with other issues
raised between the parties, still at large and will ultimately have to be decided
D by a competent Industrial Forum as had been rightly held by the earlier
decision of the High Court. 1690-H; 691-A-DI

6. At present there are two alternatives. The impugned decision of the
High Court may be set aside and the appeal allowed by dismissing the writ
petition leaving the parties to have their disputes thrashed out before the
E Industrial Forum. This would entail raising a dispute and an order for
reference being passed under Section 10(1) of the 1947 Act by the appropriate
Government. On the other hand the dispute may be formulated by this Court
directing the parties to move the appropriate Government for an order of

F
reference. It is the latter course which has been urged by the appellants and
respondents 7 to U. 1691-B-EJ
--
7. The industrial unrest in connection with the national Airlines needs
to be avoided. Apart from the fact that the' Adhikari Group' has been agitating
their grievance since 1997, the issue of inter-se seniority among the pilots
needs to be resolved expeditiously since that would in turn involve issues of
G command of passenger flights and of course, possible demands of shortfall.
1691-E-FJ

Hindustan Steel Works Construction ltd v. Hindustan Steel Works
Construction ltd Employees' Union, JT (2005) 7 SC 273, relied on.

H 8. Iii the meanwhile, Clause 7(C) and Annexure D to the 1998 settlement
AIR INDIA LTD. v. VIS HAL KAPOOR [RUMA PAL, J.] 675
would continue to operate but that the writ petitioners should not claim the A
shortfall under the 1998 Settlement However, any amount of shortfall arising
out of this arrangement must be deposited by the appellants in the Industrial
Court which will keep the same in fixed deposit with any nationalized bank
subject to any award, interim or final, that may be passed by the Tribunal.
(692-B-CJ B
9. It is directed that the appropriate Government shall refer the following
questions for adjudication by the appropriate Tribunal:

(a) Whether the 1998 settlement or any portion thereof is liable to be
set aside on the grounds of fraud, undue innuence etc. as alleged by the C
'Adhikari Group'?

(b) Whether the requirement of the ALTP Licence was necessary for
co-pilots?

(d) What is the legal effect oHhe Conciliation Officer's recommendation
of the Adhikari Group's case and Air India's acceptance thereof?

(e) To what relief are the parties entitled? (692-D-F]
E
CIVIL APPELLATE JURJSDICTION : Civil Appeal No. 5919 of2005.

From the Judgment and Order dated 10.3.2005 of the Bombay High
Court in W.P. No. 3108 of2004.

WITH F
C.A. Nos. 5936 and 5920/2005, C.A. Nos. 5921and5922 of2005.

Gopal Subramanium, Jaideep Gupta, V.B. Joshi, R. Kivi, K. Kumar, P.
Dhingra, S.M. Jadhav, H. Gupta and B.K. Sah for the Appellants.

H.N. Salve, Praveeen Gautam, V. Krishnan, M. Grover, N. Gore, R.N. G
Karanjawala, N. Bahl, P. Baghel and Mrs. Manik Karanjawala for the
Respondents.

The Judgment of the Court was delivered by

RUMA PAL, J. Leave granted. H
676 SUPREME COURT REPORTS [2005) SUPP. 3 S.C.R.

A These appeals arise out of a dispute over the seniority of co-pilots
employed by the first appellant, Air India Ltd. The contending parties are two
groups of co-pilots, namely, the respondents I to 6 (referred to hereafter as
the 'writ petitioners") and the respondents 7 to I2. The bone of contention
is whether seniority as a co-pilot is to be calculated from the day a pilot gets
an Air Lines Transport Pilot Licence (AL TP) or from the day the pilot enters
B the service of the first appellant with only a commercial pilot's licence (CPL).
The differences between an AL TP and CPL as provided in Schedule II of the
Aircraft Rules 1937 are inter alia that an AL TP licence holder has at least
1500 hours of flying of which 500 hours is as a pilot-in-command. A CPL
holder has to have 250 flying hours with 150 hours as a pilot-in-command.
C However apart from noting this, we do not propose to decide this dispute as
the issue which actually arises for decision before us is much narrower. The
question is whether the High Court by the order impugned in this appeal
should have decided the contention itself or left it to the Industrial Tribunal
to decide.

D The first appellant is owned by the Government of India and provides
international air transport services. Its aircrafts are operated by pilots in
command (PIC) and co-pilots or first officers apart from other cock-pit crew.
Co pilots fly under the supervision of commanders with 500 or more hours
as PIC. It is common ground that unless a pilot has an AL TP licence, he
E cannot qualify as a PIC. According to the appellants, the respondents 7 to
12 were entitled to seniority over the writ petitioners because they had
obtained an AL TP prior to the writ petitioners. It is the appellants' case that
up till 1986 only ALTP holders were eligible for appointment as co-pilots with
the first appellant. CPL holders were recruited for the first time as probationary
co-pilots by the first appellant only from 1986. Their probation was to continue
F till they obtained the AL TP licence. If they failed to get an AL TP it resulted
in termination of their employment.

The Indian Pilots Guild (referred to as the Guild) was a recognized union
of pilots of the first appellant. On 21st July 1989, a settlement was arrived at
between the Guild and the first appellant for the period I. I 0.85 to 31.8. 90
G (referred to hereafter as the 1989 Settlement). Clause 3(d) of the settlement
related to seniority and read as under:

"( d) The pi lots joining the Corporation with AL TP will always have
higher line seniority over the co-pilots who is already in the employment
of the Corporation without AL TP Licence".
H
AIRINDIALTD. v. VISHALKAPOOR [RUMAPAL,J.] 677

On !st September 1990, the Guild gave a notice of termination of the A
1989 settlement and raised a fresh charter of demands. In 1992 the CPL
holders raised a demand before the appellants asking for seniority from the
date of their joining the first appellant. The demand was rejected. They then
filed a writ petition being W.P. No. 2365 of 1992 in which they challenged
clause 3(d) of the 1989 settlement contending that the obtaining of an ALTP B
licence was wholly irrelevant for confirmation as a co-pilot. The writ petition
was opposed by the first appellant as well as by the Guild. It was ultimately
dismissed on I Ith February 1993 on the ground that the letters of appointment
of the CPL holders specifically provided for their confirmation as a co-pilot
subject to obtaining AL TP licence. The Court was also of the view that it was
a matter "falling in the realm of a policy decision" of the first appellant and C
that there was "nothing arbitrary about this clause".

On 20th January, 1995, however at a meeting of the senior officers of
the first appellant, it was decided that CPL holders would be on a training
period for two years .. On completion of a training period, they would be placed
in the grade of co-pilot on probation for a period of one year. On satisfactory D
completion of the probation period, they would be confirmed in the service
of the first appellant with a rider that the services would be detennined if they
ditl not complete their AL TP within five years from the date of their first solo
flight. CPL holders who had already obtained their AL TP and had been
confirmed in service, would be confirmed retrospectively i.e. one year from E
their solo flight. CPL holders who had completed their first solo flight and had
been released to fly as a co-pilot, would also stand confirmed only if they
obtained the ALTP within five years of their solo flight. CPL holders who were
on training and who had not yet done their first solo, would be confirmed
only in terms of the decision taken. The seniority of all CPL holders would
be batch wise and would be reckoned from the date of obtaining their AL TP. F
The writ petitioners were appointed as trainee pilots after 1994 and were
confirmed as co-pilots in September, 1996 with effect from October 1996. Their
letters of confirmation required them to obtain AL TP within a period of five
years from that date failing which their contract of employment would
automatically end. G
In the meanwhile on 14th February, 1995 an advertisement was issued
by the first appellant for appointment as a Co-pilot (First Officer) and Trainee
pilot. The technical qualification required- for Co-Pilots inter alia was
possession of an Indian AL TP with 1500 hours minimum flying experience H
678 SUPREME COURT REPORTS (2005) SUPP. 3 S.C.R.

A which should include 500 hours as Pilot in command experience either on
multi engine aircraft or on Turbo-jet aircraft. The Trainee Pilots were required
to be in possession of inter a/ia an Indian CPL with an endorsement on a
twin engine type aircraft.

According to the appellants during this period several Ex-Vayudoot
B Pilots were absorbed in the first appellant's service. ALTP holders with 500
hours as pilots in command were given seniority above co-pilots with CPL
who were confirmed as co-pilots. However they were placed below the officers
holding AL TP who were already serving in the first appellant. The rest which
included pilots with AL TP but without adequate command experience were
C placed below the first appellant's trainee pilots holding only CPLs. There is
some dispute as to what actually transpired with regard to the absorption of
the Vayudoot pilots in 1995 in the service of the first appellant which is
unnecessary to be decided in view of what we have finally directed.

However it is admitted that the dispute of fixation of line seniority of
D Co-pilots based on the holding of AL TP or CPL persisted. The matter was
referred to a Committee by the second appellant. The Committee gave its
opinion in writing on 16th January, 1996 that the policy which was prevailing
was "adequate and correct" in respect of Pilots joining the first appellant with
AL TP. The policy for fixing of seniority of pilots joining with CPL was also
found to be "adequate." The Committee finalised the seniority list which was
E then forwarded to the Director of Operations and it was said that the basis
for the seniority list which set out the reasoning of the Committee should be
explained to the new entrants before they joined so that no representation
could be made later.

Pursuant to the advertisement for co-pilots issued by the first appellant,
F
respondents Nos. 7 to 12 and eight others who are all ex-Indian Air Force or
Navy Pilots and holders of AL TP licences with 500 flying hours as pilots in
command as advertised, applied for appointments as co-pilots. The 14 pilots
(who will be hereafter referred to as 'Adhikari group') entered service as co-
pilots in the first appellant in November, 1996. Their letters of appointment
G contained a clause that they would be subsequently informed as to their
seniority.

The Adhikari group filed a writ petition being W.P.(L) No. 1615of1997
seeking to enforce Clause 3(d) of the 1989 settlement. The writ petition was
dismissed on 16th October, 1997.· The Court held that the 1989 settlement had
H already been terminated and was "non-existing". It was noted that negotiations
AIR INDIA LTD. v. VISHAL KAPOOR [RUMA PAL, J.] 679

were in progress between the Guild and the first appellant and that if the A
petitioner pilots would be aggrieved by any settlement which may be arrived
they could raise a dispute before the Conciliation Officer. The High Court also
said that in case of failure of conciliation, the dispute could be referred to the
National Industrial Tribunal. It was recorded that there was a pending reference
before the Tribunal and that it was "always open to the petitioners to join
in the said reference and raise their demands". The writ petition was therefore B
dismissed on the ground that there was an efficacious alternate remedy. The
Adhikari group sought to impugn the order of the High Court dated 16th
October, I997 before this Court by way of a special leave petition.

While the special leave petition was pending, on 3rd January, 1998, a C
settlement was arrived at between the Guild and the first appellant (referred
to as the "1998 settlement"). Several demands relating to the conditions of
service of pilots were decided by the settlement. As far as seniority of the
pilots were concerned, the settlement noted earlier discussions held in 1995
and the following terms were recorded:
D
7. Seniority of Pilots.

(a)xxx xxx xxx xxx

(b)xxx xxx xxx 'xxx

(c) Based on these discussions, the seniority of trainee Pilots/Co- E
Pilots has been determined as an one time exercise as indicated in the
Seniority List contained in Annexure-D and this will not be cited as
a precedent in future.

(d) Clause 3(d) of Schedule 2 of Memorandum of Settlement dated
July 2I st 1989 stands deleted. Henceforth Line Seniority of Co-pilots F
joining the C\Hnpany will be based on the date of entry of the pilot
in the grade of a first officer.

Annexure D referred to in Clause 7(C)was a seniority list which placed
the writ petitioners at serial Nos. 173 to 178 and the Adhikari group against
serial Nos. 205 to 218. G
The Adhikari group withdrew their special leave petitions challenging
the order dated 16th October, 1997, stating that "since the petition before the
High Court was premature, they wish to withdraw the present special leave
petition so that they may take appropriate steps later". They then filed a writ H
680 SUPREME COURT REPORTS [2005] SUPP. 3 S.C.R.

A petition being W.P. 2930 of 1999 before the Bombay High Court challenging
Clause 7(C) of the 1998 settlement. The writ petition was dismissed on 14th
November, 2000. Since the reasons for such dismissal was to a large extent,
the basis of the order impugned in these appeals, the reasoning is noted in
some detail.

B In its order dated 14th November, 2000 the High Court noted that the
I998 settlement was binding upon all workmen in view of the express provisions
of Section 18(3) of the Industrial Disputes Act, 1947. The court also noted
the submission of the Adhikari group that the 1998 settlement could be
challenged on the ground that the same was unjust, unfair, not bona fide, and
C had been arrived at on account of fraud, misrepresentation, concealment of
facts or as a result of ~orruption and other inducements. The court said that
such a challenge could be the subject matter of yet another industrial dispute
but could not be the subject matter of challenge before the High Court in its
writ jurisdiction. The preliminary objection raised by the first appellant and
the Guild that the issue had already been determined in WP(L) No. 1615 of
D 1997 in respect of which the special leave petition had been withdrawn, was
rejected because it was held that "the petitioners may be justified in contending
that a fresh cause of action had arisen''. The Court then held:

"The petitioners may challenge Clause 7(C) of the settlement , if so
advised, and if they are entitled to do so, by raising an industrial
E dispute. The question as to whether the settlement is just, fair and
bonafide or that it is vitiated by fraud, misrepresentation or
concealment of facts in the first instance, must be examined by the
Industrial Tribunal on a reference being made to it by the State
Government. Of course, the award of the Tribunal may be challenged
F in a proceeding under Article 227 of the Constitution of India on the
grounds pennissible in law''.
However, the court refused to set aside clause 7(C) of the I 998 Settlement
in exercise of its jurisdiction under Article 226 of the Constitution since:-

"it is not as if the settlement is so blatantly arbitrary, unreasonable
G or irrational that the same should be quashed by this Court without
anything more''.
Having come to the conclusion that the court would not interfere with
the settlement in exercise of its writ jurisdiction, the Court also recorded that
it was not inclined to examine the other submissions made on behalf of the
H Adhikari group because "those question may have to be raised in an industrial
AIR INDIA LTD. v. VISHAL KAPOOR [RUMA PAL,).) 681
dispute which may be referred for adjudication by the Tribunal". A
It was also observed that since the Adhikari group had been told in
their letters of appointment that the question of their seniority would be
decided later, they had not acquired any vested right of seniority. The Court
said that:
B
"Having regard to the submissions urged before us, we feel that these
are matters which may require deeper consideration, and it cannot be
said that the settlement, on the face of it, is so arbitrary and
unreasonable that it should be quashed forthwith by this Court in
exercise of its writ jurisdiction".
c
A doubt was also expressed as to the claim of the Adhikari group in
the following language:-

"The settlement is in the nature of a package deal, and it is doubtful
whether the petitioners can claim the benefits under the settlement
including monetary benefits, and at the same time, challenge only a D
particular clause of the settlement".

Finally in dismissing the writ petition the Court said that

"The petitioners (i.e. the Adhikari group) must seek their remedy
under the provisions of the Industrial Disputes Act instead of invoking E
the writ jurisdiction of this Court under Articles 226 and 227 of the
Constitution of India".

The Adhikari group challenged the order of the High Court in a special
leave petition which however was withdrawn on I 9th March, 200 l. The order
of this Court records: F
"Learned counsel for the petitioners states that the petitioner would
be advised to approach the Industrial Court in accordance with the
judgment of the High Court and seeks to withdraw the petition. We
record the statement of the learned counsel and dismiss the special
leave petition as withdrawn". G
The Adhikari group then filed a complaint before the National Industrial
Tribunal (referred to hereafter as "the Tribunal") in the pending reference
being Reference No. NTB -I of 1990 under Section 33-A of the Industrial
Disputes Act, I 947 (referred to as the 194 7 Act). The complaint was opposed
both by the first appellant as well as the Guild on the ground that the dispute H
682 SUPREME COURT REPORTS [2005] SUPP. 3 S.C.R.

A relating to the seniority of co-pilots was not connected with the dispute
pending before the Tribunal and therefore the complaint under Section 33-A
of the 1947 Act was not maintainable. The Adhikari group were advised to
withdraw their complaint under Section 33-A from the Tribunal, which they
did.

B On 6th October, 2003 they raised a dispute relating to the fixation of
their seniority under the 1998 settlement under Section 12 of the 1947 Act
before the Conciliation Officer. The Conciliation Officer recommended to the
management of the first appellant that considering the historical background
of the question relating to seniority, and since the Adhikari group had joined
C on 25th November, 1996 prior to the 1998 settlement coming into operation,
they should be granted seniority as claimed by them.

In the meanwhile on 8th December, 2000 the period of five years for CPL
Pilots to obtain their AL TP licence was extended for a period of a further six
months. The period of six months was again extended on 27th June, 2002 upto
D seven years. The requirement for an AL TP licence for Co-Pilots was ultimately
totally removed by Ist -2nd August, 2002 when a decision was taken by the
first appellant that "in order to .give a fair and reasonable chance to all co-
pilots" the requirement to obtain an AL TP licence within five years should
be removed altogether for all co-pilots. All that was required was that a co-
pilot should be in possession of an AL TP licence by the time he/she comes
E up for command training as per line seniority.

The Adhikari group made a representation to the management of the
first appellant on the basis of the recommendation of the Conciliation Officer.
The General Manager (Human Resource Development ) supported the
F representation by his letter dated 20th April, 2004. The Chaimnan and Managing
Director of the first appellant (who is the second appellant) appointed a four
member Committee to go into the issue. The Committee submitted a lengthy
report on 4th June 2004 in which they submitted that the Adhikari group who
had been appointed in November, 1996 should be placed as far as the line
seniority was concerned only below those ALTP Holders who had already
G attained command or those who were undergoing command training.

Despite the recommendation of the Committee, acting on the basis of
Annexure 'D' to the 1998 settlement read with the instructions dated 1st-2nd
August, 2003, letters for command training were issued to the writ petitioners
on 14th September, 2004 by the third appellant viz. the General Manager,
H Operations (Administration). However the second appellant, namely the
AIR INDIA LTD. v. VISHALKAPOOR [RUMAPAL,J.] 683

Chairman of Air India, acting on the basis of the Committee's Report, passed A
an order on 23/28th September, 2004 approving the recommendations of the
Committee. According to him, the seniority of the Adhikari group had been
decided "improperly". In the circumstances, the letters issued to the writ
petitioners for command training on I4th September, 2004 were cancelled by
the third appellant on 30th September, 2004, who then issued letters of B
command training on 1st October, 2004, to the respondents 7 to 12.

In the circumstances, a writ petition ( W.P. No. 3 I 08 of 2004) was filed
on 5th October, 2004 by the writ petitioners which was allowed by the High
Court on I0th March, 2005 by the order impugned in these appeals.

In allowing the writ petition, the High Court accepted the submissions C
of the writ petitioners. It rejected preliminary objections raised by the
respondents 7-12 and the appellants that the grievance of the writ petitioners
as to the alleged non-implementation of the I998 Settlement should be decided
appropriately under the Industrial Disputes Act I 94 7 and not under Article
226, particularly, since there were disputed questions of fact. It was found that D
there was no factual controversy which justified the Court in rejecting the writ
petition on the ground of an alternative remedy. In the impugned order large
passages of the earlier decision in W.P. No. 2930 of 1999 were quoted
extensively after which the learned judges came to the conclusion that the
judgment finally decided the issues between the parties and had not left them
open for adjudication all over again. The earlier decision had reached finality E
and could not be reopened. It was held that the respondents 7 to 12 were also
barred from raising their grievances by the withdrawal of the complaint under
• Section 33A of the 194 7 Act. The High Court also held that the seniority list
appended to the 1998 Settlement had been acted upon and implemented. It
was held that the respondents 7 to 12 had the liberty to avail all legal remedies F
and having abandoned them, it was not open to them to urge that the
settlement which was in force and implemented from 1998 was vitiated by
fraud and collusion. "It held that the Court wou Id not examine allegations of '
fraud at the instance of the respondents 7 to 12 as that would, in the High
Courts' opinion, amount to entertaining "a totally distinct grievance based

- upon independent cause of action". Finally, the High Court found that the G
appellants had not been able to justify their action of withdrawing the letters
issued to the writ petitioners as to their command training. As such, the
letters cancelling the earlier letters directing the writ petitioners to go for
command training were quashed.
H
684 SUPREME COURT REPORTS [2005] SUPP. 3 S.C.R.

A The appellants have contended that the seniority of the Adhikari group
was correctly fixed on the basis of the Conciliation Officer's recommendation
and the Committee's Report. The 1998 settlement expressly stated that it
would operate prospectively. In any event Clause 16 of the 1998 settlement
provided for filing of the settlement before the National Industrial Tribunal in
B the pending reference and for obtaining of a consent award. This had not
been done. It was submitted by the appellants that the issue of seniority
should be left to the Industrial Tribunal to decide. Till that was done, it was
suggested that as an interim measure, the Adhikari group should be permitted
to continue as commanders but that line seniority according to Annexure D
to the 1998 settlement could continue subject to the condition that the writ
C petitioners and others "placed higher than the Adhikari group in that list would
not claim any compensation for the shortfall under Clause 4(a)(i) and (f)(iv)
of the 1998 settlement.

The Adhikari group have separately challenged the impugned order.
They have adopted the arguments of the appellants. They also said that the
D settled practice of the first appellant was that all co-pilots or First Officers had
to have ALTPs. CPL recruits were recruited as trainee pilots only because of
pressure from senior officers of the first appellant whose children had obtained
CPLs. Nevertheless the AL TP always had higher line seniority over the co-
pilots already in the first appellant's employment who did not have AL TP.
E Therefore seniority was not on the date of entry into the category of first
officer/co-pilots but oil the date of obtaining ALTP. Clause 3(d) of the 1989
settlement provided this and although the settlement was terminated in 1990
by the Guild, it continued to remain in force till the new settlement came into
effect. This was the law and in fact was given effect to by the first appellant c:::
in their record note of 1995, in .the appointment letters issued to the writ
F petitioners, when the Vayudoot pilots were absorbed, in the 1995 advertisement,
and in various directions and letters of the first appellant. The High Court also
upheld this by its order dated 11.2.1993 dismissing the CPL holders' writ
petition in which affidavits had been filed by the first appellant and the Guild
justifying the higher line seniority of the AL TP holders. Therefore at the time
G when the Adhikari group were appointed as co-pilots, the prevailing principle
was Clause 3(d) of the 1989 settlement and the 1998 settlement could not
affect their seniority retrospectively. They say that Annexure D, which was
significantly a one time settlement, was the outcome of nepotism by senior
officers of the first appellant and the guild whose children or close relatives
in the employment of the first appellant and holding CPL licences would
H benefit thereunder. Even the 1998 settlement was not abided by in that the -
AIR INDIA LTD. v. VISHAL KAPOOR [RUMA PAL J.] 685
condition for obtaining the AL TP in five years was done away with. The A
action of the appellants was arbitrary, malajide and unjust and violative of
Article 14. It was further contended that. the 1998 settlement should not
therefore be given effect to. In any event the Adhikari group had the right
to raise an industrial dispute. The High Court had granted the Adhikari group
such right. Their complaint under Section 33-A of the 1947 Act was an interim B
application and its withdrawal did not prejudice their right to raise a dispute
before the Conciliation Officer under Section 12 of that Act. Furthermore, it
was argued that the pending reference related to a dispute between Indian
Airlines and its employees and did not relate to any dispute between Air India
and its workmen as held by the Tribunal in its final award. It is submitted that
this Court should hold that the 1998 settlement cannot take away the Adhikari C
group's rights of seniority but if the disputes were to be decided under the
1947 Act, this Court should itself refer the dispute to the Tribunal. In the
meantime they were willing to abide by the interim arrangement suggested by
the appellants.

The writ petitioners have said that the issue relating to seniority of D
AL TP holders was barred by res judicata since the 1989 settlement had been
found to be "non-existing" in \l(P (L) No 1615of1997. The High Court in its
subsequent decision dated 14.11.2000 had also decided the challenges raised
against the 1998 settlement on merits. Additionally, the Adhikari group had
abandoned their claim before the Tribunal. As far as the first appellant was E
concerned, it had supported the 1998 settlement in all the proceedings and
could not be permitted to take a different stand. The fact that the 1998
settlement provided for filing of the award before the Tribunal and the obtaining
of a consent award, was irrelevant since Clause 16 did not make the operation
of the settlement conditional upon the obtaining of a consent award. Besides
the result would be the re-opening of all the terms and conditions taken as F
settled and acted upon by the appellants and the Adhikari group which had
additionally received benefits thereunder. It was stated that the 1998 settlement
was a valid statutory settlement under Section 18(3) of the 1947 Act. According
to the writ petitioners existing Air India pilots as on November 1996 had
already been validly confirmed as co-pilots even though they were CPL G
holders before the Adhikari Group were recruited. It was submitted that there
were no malajides attached to the 1998 settlement and that the Adhikari
group did not get any assurance that they would supersede those already in
service. They claim that it is accepted service jurisprudence that generally
seniority of batch recruits is based on the date of entry into service. According
to them the 1989 settlement had not been applied to the Vayudoot recruits H
686 SUPREME COURT REPORTS [2005] SUPP. 3 S.CR.

A and was not in force when the Adhikari group was recruited. It is contended
that the reference to a one time settlement in Annexure D dealt with the place
of Vayudoot pilots and not to the seniority of the writ petitioners. They say
that the ALTP licence was irrelevant to the fixation of seniority although it
was relevant for the purposes of promotion. It was also contended that the
Adhikari group could not challenge the seniority list in Annexure 'D' thereto
B co-laterally in proceedings filed by the writ petitioners. It was finally submitted
that this Court should not refer the dispute between the parties to the
Industrial Tribunal for adjudication especially at the instance of the respondents
7 to I2 on a writ petition filed by the writ petitioners. Even if they were
permitted to do so in a separate proceeding, till there was a fresh adjudication,
C the 1998 settlement would have to operate.
Jn our opinion the High Court erred in rejecting the preliminary objection
of the respondents 7 to 12 viz. that the writ petitioners should have been left
to pursue their grievance relating to the breach of Clause 7(C) of the 1998
settlement before the appropriate forum under the Industrial Disputes Act,
D 1947. There was a serious factual controversy as was noted by the High Court
itself in paragraph 22 of its judgment. It had been contended by the Adhikari
group that the 1998 Settlement was vitiated by fraud and malafides on the
pai;t of the office bearers of the Guild and some Officers of the first appellant.
The claim of the Adhikari group which has been reiterated before us is that
E senior officers of the Guild and the first appellant fraudulently agreed to
clause 7(C) of the 1998 settlement so that their sons and daughters who were
CPL holders were given undue benefit in deviation from the established
requirements and practice of the first appellant. Such allegations if proved
would be sufficient lb set aside the 1998 Settlement in so far as it affected
seniority of the Adhikari group. There is a long line of authority in support
F of this proposition (See for example Herber/sons Ltd. v. The Workmen of
Herber/sons Ltd. and Anr., [ 1976] 4 SCC 736, 742; KCP Ltd. v. Presiding
Officer, [1996] 10 SCC 446 and National Engineering Industries Ltd. v. State
o(Rajasthan, [2000] J SCC 371, 393). This was also the finding of the High
Court in W.P. No. 2930 of 1999. Sufficient particulars in support of these
G allegations had been given. The Conciliation Officer, the Committee set up by
the Chairman of Air India, and the Chairman himself had founded that an
injustice had been done to the Adhikari group. The opinions expressed have
not been held by the High Court to be without substance. Indeed the High
Court did not consider any of this because it was held, incorrectly as we have
held later in our opinion, that the issues raised had been concluded by the
H earlier decision of coordinate Benches in W.P.(L) No. 1615of1997 and WP
AIR INDIA LTO. v. YISHAL KAPOOR [RUMA PAL, J.] 687
(c) No. 2930of1999. A
A disputed question of fact will normally arise when a petitioner puts
forward a case on facts which are controverted by the respondents. This is
naturally so, as it cannot be expected that the petitioner will of his, her or its
own say that the facts forming the basis of the claim are disputed. Although
it may happen that the Court on a scrutiny of the nature of the claim made B
in the petition may come to a conclusion that the factual issues raised are ex
facie controversial and decline, in limine, to exercise jurisdiction under Art.
226, nevertheless the controversy usually surfaces after the respondents
have had an opportunity of giving their version of the matter. That was what
happened in the present case. The writ petitioners rested their case on clause C
7(C) read with Annexure D to the 1998 settlement. The respondents pleaded
that the settlement was vitiated by fraud. Obviously, the burden of proving
this would be on the respondents. No court or tribunal has tested the
allegations made by the Adhikari group on merits till today. The High Court
shut out the allegations altogether for two reas?ns. The first reason was that D
it would amount to entertaining a separate cause of action. The conclusion
was erroneous as it was based on a confusion between onus of proof and
cause of action.

In ABL International Ltd. v. Export Credit Guarantee Corpn. of India
and Ors., [2004] 3 sec 553, the dispute was limited to an interpretation of the E
terms of a contract of insurance and an export contract. Counsel for the
respondent contended that for a correct interpretation of the clauses of the
contracts there was need for oral evidence being led without which a proper
interpretation of the clauses was not possible, and therefore, it was a fit case
in which the appellants should be directed to approach the civil court to F
establish their claim. This Court construed the clauses of the contracts and
said that there was no room for a second or other construction. It was noted
(and as we would like to emphasise) that there was no allegation that the
contrads in question were obtained either by fraud or by misrepresentation.
In such factual situation, this Court was of the opinion that the facts of the
case did not and should not inhibit the High Court or this Court from granting G
the relief sought for by the petitioner. In other words, merely because the
respondents want to dispute a construction to be pl~ced on a clause of a
contract, it would not become a disputed question of fact. On the other hand,
if there are allegations of fraud, misrepresentation etc. it may be a disputed
question of fact and the High Court should not go into the same but allow H
688 SUPREME COURT REPORTS [2005] SUPP. 3 S.C.R.

A the parties to approach the alternative forum legally available.
The second reason given by the High Court (which has also been the
writ petitioners' submission before us) was that all the issues raised by ~he
respondents 7 to 12 had been finally decided by the earlier decisions dated
16th October, 1997 in WP (C) No. 1645 of I 997 and I 4th November, 2000 in
B W.P. No. 2930 of 1999. Doubtless the High Court in its order dated 16th
October I 997 had opined that the I 989 settlement was "non-existing''. The
observation was manifestly erroneous in view of this Court's expressed in Life
Insurance Corporation of India v. D.J Bahadur and Ors., [I 98 I) I SCC 3 I 5
to the following effect:-
c "Once the earlier contract is extinguished and fresh conditions of
service are created by the award or the settlement, the inevitable
."consequenc,('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
D between the parties until a new agreement by way of settlement or
statutory contract by the force of an award takes its place". (pg. 348)

Although the view expressed in W.P (L) No. 1615of1997 is erroneous,
nevertheless, the question whether the 1989 settlement can found an
E enforceable right in the respondents 7 to 12 is concluded against them. But
the decision would not debar the raising of a dispute that the I 998 settlement
was vitiated by fraud, corruption as the settlement was entered into after
those proceedings were concluded before the High Court. Furthermore,
although the decision precludes the Adhikari group from claiming a right
under the I 989 settlement, they can certainly rely upon it as evidencing a
F continuation of an established practice and requirement. It would also be
open to the Adhikari group to rely on all other factors in support of their claim
for seniority over the CPL holders.

By the decision in W.P. No. 2930 of 1999, however, the High Court had
G not held that one clause in the Settlement cannot be challenged in isolation.
A doubt had merely been expressed but no firm conclusion had been arrived.
Nor had the Court decided the merits of the Adhikari group's grievance at all.
What the High Court had in fact decided was that the issues of fraud etc.
raised could not be decided in exercise of the Court's jurisdiction under
Article 226. It expressly left the issues to be decided on a deeper consideration
H
AIR INDIA LTD. v. VIS HAL KAPOOR [RUMA PAL, J.] 689

by the Industrial Tribunal. This is abundantly clear from the passages from A
the judgment dated !4th November, 2000 quoted by us.

Another error in the decision impugned before us was the refusal to
allow the respondents 7 to 12 to raise their claim regarding their seniority
because they had withdrawn their complaint under Section 33A of the
Industrial Disputes Act 1947. It is nobody's case that the complaint of the B
Adhikari group under Section 33A was legally maintainable in Reference No.
NTB 1 of 1990: In fact both the first appellant and the Guild had opposed the
complaint on this ground. Section 33A allows a complaint to be filed in a
pending reference where an employer contravenes the provisions of Section
33 of the 1947 Act during the pendency of proceedings pursuant to a reference C
under Section 10(1) of the 1947 Act. The relevant portion in Section 33(l)(a)
prohibits an employer from altering, to the prejudice of the "workmen
concerned in such dispute", the conditions of service applicable to them
immediately before the commencement of the proceeding. There was no pending
proceeding relating to any dispute between Air India ~nd its workmen in
which the Adhikari group could have filed a complaint under Section 33A. D
The dispute which was pending before the Tribunal in Reference No. NTB-
1 of 1990 did not relate to a dispute between the first appellant and its
workmen. It related to a dispute between Indian Airlines and its workmen
basically on the question whether the latter were entitled to the same terms
and conditions of service as the employees of the first appellant. The award
which has since been made on the reference by the Tribunal also records: E
"This reference cannot cover any industrial dispute between Air India
and its workmen as the order of the Central Govt. is confined to
dispute between (Indian) Airlines and its workmen".
In these circumstances the withdrawal of the complaint under Section p
33A did not debar the Adhikari group from raising a fresh industrial dispute.
That is what the Adhikari group has sought to do. It approached the
Conciliation Officer. The claim is said to have been investigated by the
Conciliation Officer, whose duty is to try and affect a fair and amicable
settlement of disputes, under Section 12(2) of the 1947 Act. A recommendation
was made by the Conciliation Officer to the first appellant. Since the G
recommendation for conciliation has been accepted by the management of the
first appellant, there was no question of the Conciliation Officer reporting a
failure of settlement under Section 12(4) to enable the appropriate Government
to make a reference to an Industrial Tribunal under Section 12(5). Whether by
this process, clause 7(C) and Annexure D to the 1998 settlement could be H
690 SUPREME COURT REPORTS [2005] SUPP. 3 S.C.R.

A altered is again a question requiring resolution by the appropriate forum
under the 1947 Act.

When the High Court in the impugned judgment concluded that Annexure
D to the 1998 Settlement had been acted upon and implemented, it did not
discuss any fact in support of this conclusion. Besides, the High Court's
B decision that there was "no dispute that the writ petitioners are senior in the
list and seniority over and above respondents 4 to 9" was in the circumstances
narrated, factually wrong-. But assuming the conclusion was correct,
nevertheless, having regard to the decisions of this Court earlier noted, it is
still open for the Adhikari group to challenge the 1998 Settlement on the
C ground of lack of bonafides, arbitrariness, fraud etc. Such a challenge to the
1998 Settlement cannot of course be decided in a writ proceeding as has been
already held by the High Court W.P. 2930 of 1999.

According to the appellants and the Adhikari group, the 1998 Settlement
cannot in any event be termed to be a final settlement under Section 18(3)
D of the Industrial Disputes Act, 1947 because of Clause (16) to the 1998
Settlement which provided:-
16. Both the parties agree that this settlement will be filed before the
Hon'ble National Industrial Tribunal, in the pending reference No.
NTB-1 of 1990 and Consent Award will be obtair'ed accordingly."
E Admittedly, the 1998 Settlement was not filed as envisaged nor was a
consent award obtained although this point was not raised in WP 2930 of
1999. But the issue has been concluded against the respondents 7 to 12 by
the order dated'l4th November 2000 in W.P. No. 2930of1999 which said that
the 1998 settlement was a settlement under Section 18(3) of the 1947 Act.
Neve11heless a fresh industrial dispute within the meaning of the phrase in
F Section 2(k) of the 1947 Act has arisen at least between the CPL Holders and
the Adhikari group as to whether the 1998 Settlement despite being under
Section 18(3), was invalidated because of the alleged circumstances under
which it was arrived at. Additionally, the Adhikari group may at least contend
that the subsequent modifications to Clause 7(C) of the 1998 settlement
G modifying and ultimately doing away with the requirement of an AL TP was
not valid and did not form part of the settlement under Section 18(3). All these
disputes are appropriately adjudicatable by an Industrial Tribunal under the
1947 Act.

The High Court's decision allowing the writ petition was based on
H reasons which we cannot sustain. Consequently its conclusion that the issue
AIR INDIA LTD. v. VISHAL KAPOOR [RUMA PAL, J.] 691
of seniority between the respondents 7 to 12 and the writ petitioners was A
concluded was also erroneous. Therefore, the question whether the letters
issued by the respondent No. 3 cancelling the letters for command training
issued to the writ petitioners could have been validly issued is, along with
other issues raised between the parties, still at large and will ultimately have
to be decided by a competent Industrial Forum as had been rightly held by B
the earlier decision of the High Court in W.P. No. 2930 of 1999.

At present, we have two alternatives open to us. We may set aside the
impugned decision of the High Court and allow the appeal by dismissing the
writ petition leaving the parties to have their disputes thrashed out before the
Industrial Forum. This would entail raising a dispute and an order for reference C
being passed under Section 10(1) of the '1947 Act by the appropriate
Government. We may on the other hand formulate the dispute ourselves
directing the parties to move the appropriate Government for an order of
reference. It is the latter course which has been urged by the appellants and
the respondents 7 to 12 relying on a decision of this Court in Hindustan Steel
Works Construction ltd. and Anr. v. Hindustan Steel Works Construction D
ltd. Employees Union, JT (2005) 7 SC 273.

We see no reason to take a different view from the opinion expressed
in that case particularly having regard to the need to avoid industrial unrest
in connection with the national Airlines. Apart from the fact that the Adhikari
group have been agitating their grievance since 1997, the issue of inter-se E
seniority among the pilots needs to be resolved expeditiously since that
would in turn involve issues of command of passenger flights and of course,
possible demands of shortfall. But before so directing there is yet another
question that needs to be addressed viz. what would be the interim arrangement
pending adjudication of the disputes by the Industrial Tribunal. p
When the special leave petitions were filed by the appellants and the
respondents 7 to 12 before this Court we had recorded on 25th April, 2004
that "pilots, as well as co-pilots have been sent in the command training"
(sic). The intention was to record that pilots of the Adhikari group and the
writ petitioners had been sent for command training. In fact the High Court G
while quashing the letters of cancellation noted that six pilots of the Adhikari
group (respondents 7 to 12) had already been sent for command training and
that they need not be recalled. However it was clarified that this direction did
not alter their position in the line seniority list. During the pendency of these
proceedings six more pilots of the Adhikari group as well as the writ petitioners
H
692 SUPREME COURT REPORTS [2005] SUPP. 3 S.C.R.

A have been sent for command training and have presumably completed it by
the date of this judgment. The remaining two pilots of the Adhikari group,
according to the Adhikari Group, have also been cleared for command training
in the meanwhile and have started preliminary training earlier this month. We
are of the view that the Adhikari group should be permitted to complete their
B command training.

We have already noted that the appellants and the Adhikari group are
agreeable that in the meanwhile clause 7(C) and Annexure D to the 1998
settlement would continue to operate but that the writ petitioners should not
claim the shortfall under the 1998 Settlement. It seems an eminently fair
suggestion except that any amount due on account of shortfall arising out
C of this arrangement must be deposited by the appellants in the Industrial
Court which will keep the same in fixed deposit with any nationalized bank
subject to any award, interim or final, that may be passed by the Tribunal.
We, therefore, set aside the decision of the High Court and allow the
D appeals. It is directed that the appropriate Government shall refer the following
questions for adjudication by the appropriate Tribunal:
I. Whether the 1998 settlement or any portion thereof is liable to
be set aside on the grounds of fraud, undue influence etc. as
alleged by the Adhikari group?
E 2. Whether the requirement of the AL TP licence was necessary for
co-pilots?
3. Whether the Adhikari group was entitled to seniority over the
CPL Holders in the line seniority list?
4. What is the legal effect of the Conciliation Officer's
F recommendation of the Adhikari groups case and Air India's
acceptance thereof?
5. To what relief are the parties entitled?
Any of the parties to these appeals viz. the Adhikari group or the writ
petitioners and their colleagues or Air India may move the appropriate
G Government for the order of reference with a copy of our judgment. Till the
disputes are adjudicated by the Tribunal, the interim arrangement as decided
in an earlier part of this judgment shall operate. The costs of these appeals
will follow the cause in the reference proceedings.

V.S.S. Appeals allowed.

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