Holding

The Supreme Court set aside the High Court's order quashing Regulation 13(b) and the circular, upheld the circular as valid under the Aircraft Act and Rule 134, and left the validity of Regulation 13(b) undecided.

Summary

The petitioners, employees of Indian Airlines, challenged Regulation 13(b) which obliges a six‑month written notice before resignation, and a DGCA circular requiring a No‑Objection Certificate before an air‑taxi operator can employ such employees. They claimed the provisions violated Articles 14, 16, 19(1)(g), 21 and 23 of the Constitution. The Calcutta High Court quashed both the regulation and the circular without examining the validity of Regulation 13(b). The Supreme Court set aside that order, held that the circular is within the powers conferred by the Aircraft Act, the Air Corporations Act and Rule 134, and therefore is constitutionally valid. The Court declined to decide the constitutionality of Regulation 13(b), leaving that question open for future proceedings. Consequently, the appeal was allowed and the High Court’s judgment was reversed.

Issues considered

The constitutional validity of Regulation 13(b) requiring six months' notice before resignation.
The statutory authority and constitutional validity of the DGCA circular mandating a No‑Objection Certificate for air‑taxi operators.
Whether the High Court erred in quashing the regulation and circular without examining their validity.

Legislation cited

Air Corporations Act, 1953s. 18, s. 45(2)(b), s. 7, s. 8
Air Corporations (Transfer of Undertakings and Repeal) Act, 1994
Aircraft Rules, 1937s. Rule 134(1), s. Rule 134(2), s. Rule 134(3)

Subjects

Service RegulationsNotice periodNo Objection CertificateDGCA circularConstitutional validityArticles 14,16,19(1)(g),21,23Air Corporations ActAircraft ActRule 134Civil appellate jurisdiction

Judgment

CHAIRMAN AND MANAGING DIRECTOR, INDIAN AIRLINES A
v.
BINOD KUMAR SINHA AND ORS.

OCTOBER 4, 2001

[S. RAIBNDRA BABU AND DORAISWAMY RAJU, JJ.] B

Service Law :

Indian Airlines Employees (Aircraft Engineering Department) Service
Regulations 1959_:..Regulation 13(b)-Amended to the effect that no employee C
to resign without giving six months notice in writing-Circular issued stipulating
that no air taxi operator to employ anyone serving any of the national carriers
without obtaining no objection certificate from the previous employer-Validity
of-Upheld by High Court-On appeal held, High Court not right in striking
down Regulation 13(b) Order of High Court set aside-Question of
constitutionality of Regulation l 3(b) left open-Circular issued constitutionally D
valid-Constitution of India, 1950 Articles 14, 16, I9(1)(g) and 21-Air Craft
Rules I937-Rule 134.

Regulation 13(b) of the Indian Airlines Employees (Aircraft
Engineering Department) Service Regulations 1959 was amended to provide.
that no employee shall resign from the employment of the Corporation E
without giving six months notice in writing. Circular was issued by which a
condition was added that "no Air .Taxi operator shall employ ·anyone
already serving any of the national carriers, namely, Air India, Indian
Airlines, Vayudoot and Pawan Hans without obtaining a 'No Objection
Certificate' from the employer with whom they are working." Aggrieved, F
respondents filed a petition and the High Court quashed the regulation
without dealing with the validity or scope of the regulation. It also quashed
the Circular. Hence the present appeal.
Allowing the appeal, the Court
G
HELD : 1.1. If the employees of the national carriers leave their
employment without following the embargo imposed upon them that they
cannot resign from employment except after a notice of six months as
11rovided for in Regulation 13(b) framed under the Air Corporation Act
and join the employment in any other air service, it affects the operation of
the air carriers. Therefore, if the Circular was issued to give effect to the H
561
562 SUPREME COURT REPORTS [2001] SUPP. 3 S.CR.
A objective underlying Regulation 13(b) it cannot be termed to be invalid. If
the provision of Regulation 13(b) is valid in law and in violation of which
an employee seeks to join employment with an airi taxi operator, the
restriction in the Circular cannot be an infringement of his rights arising
.under Articles 14, 16, 19(1)(g), 21 and 23 of the Constitution. [570-A-C]

B 1.2. In the instant case, High Court did not examine the validity or
scope of Regulation 13(b); as such the impact of the Regulation on the
Circular also could not be examined. Thus, the relief granted by the High
Court in quashing Regulation 13(b) is set aside. The question whether
Regulation 13(b) is valid or otherwise is kept open to be considered in a .
c proceeding that may arise hereafter in view of the fact that the respondents
who obtained the relief at the hands of the High Court have remained ex-
parte in the proceedings. [570-E; 564-G; HJ

2. Power has been exercised by the Government in framing Rule 134
which enables the operation of an air transport service by an undertaking
D other than the scheduled air transport service or a foreign air transport service
and thatspecial permission of the Central Government is subject to such terms
and conditions as it may think fit to impose in each case; one of those conditions
is to enable the DGCA to impose appropriate conditions. Therefore, it cannot
be said that the impugned Circular has been issued without any power or
E authority under theAir Craft Act or the Rules. [569-A-C]

3. The objective of Rule 134 is based on the Air Craft Act and also on
the Air Corporations Act. The Air Corporations Act provides for
establishment of Air Corporations to facilitate the proper, economic and
efficient services. Rule 134(1) in carrying the objectives debars any person
F other than a Corporation or its associates to operate any scheduled air
transport service. Rule 134(3) makes other air transport services being
permitted su!>ject to conditions to be imposed by Government of DGCA~
Therefore, the Circular in question falls within the scope of the enactment
and the Rules made therein. [569-D; E; F; G;]
G 4. It cannot be said that the embargo that an employee cannot resign
from employment of the Corporation without giving six months n~tice in
writing to the Corporation is only upon the Air taxi operators and not upon
other employers because there is no material to indicate as to what is/the
position in relation to each one of these other organisations is and whether
H any permit as contemplated under Rule 134 is granted to them.or not and
CHAIRMAN AND MANAGING DIRECTOR v. B.K. SINHA [RAJENDRA BABU, J.] 563
· when the direction is issued only to such permit holders as falling within the A.
scope of Rule 134(3). forming a separate class and that class alone is subject
to the present treatment, there is no violation of Article 14. [570-G;H]

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1458 of 1994.

From the Judgment and Order dated 2.9.93 of the CalcuttaJ:ligh Court B
in A. No. 488/93 in Matter No. 1275 of 1993.

Altaf Ahmed, Additional Solicitor General, C.A. Sundanun, V.R. Reddy
(AC), Ms. Nina Gupta, Uday Gupta, Ms. Arpita Mahajan, Ms. Shikha Sachdev,
Vineet Kumar, Tara Chand Sharma, S.N. Terdol, Anil Katiyar, P.S. Narasimha,
Ms. Sarla Chandra (NP), Lalit Bhasin, R.P. Wadhwani and K. Bhirava Swamy C
with them for the appearing parties.

The Judgment of the Court was delivered by

RAJENDRA BABU, J. These appeals arise out of an order made by the
High Court of Calcutta in writ petition Nos. 488/1993 and 489/1993 filed in• D
the High Court challenging the validity of. Regulation 13(b), substituted by
notification No. S.O. 134/(E) dated March 15, 1993, of the Indian Airlines
Employees' (Aircraft Engineering Department) Service Regulations, 1959 [for
short 'the Regulations'], which provides that no employee shall resign from
employment of the Corporation without giving six months notice in writing to E
the Corporation of his/her intention to resign with provision for Managing
Director of the Corporation to dispense with or reduce the period of notice on
medical grounds or other special circumstances. A further proviso being to the
effect that Corporation may refuse to accept terminati()n if the same is sought
to avoid disciplinary action contemplated or taken and a circular No. AIC/3/
93 dated February 25, 1993 was issued by the Director General of Civil F
Aviation (DGCA) by which a condition was added in relation to Air Taxi
Operator to the effect that "no Air Taxi Operator shall employ anyone already
serving any of the national carriers, namely, Air India, Indian Airlines, Vayudoot
and Pawan Hans without obtaining a 'No Objection Certificate' from the
employer with whom they are working". G
The writ petitions were filed by a Commander P~lot working under the
Indian Airlines Corporation. He had been offered the post of Commander Pilot
under Mis Damania Travels but on account of Regulation 13(b) and circular
No. AIC/3/93 dated February 25, 1993 the respondent could not join the new
post immediately which had placed an embargo on his employment and thus H
564 SUPREME COURT REPORTS [2001] SUPP. 3 S.C.R.
A he sought for an interim order. A learned S~ngle Judge of the High Court held
that the matter cannot be effectively decided without the presence of Mis
Damania Travels, namely, the writ petitioner's prospective employer, and
M/s Damania Travels was directed to be added as a party. Ev~n thereafter the
learned Single Judge refused to grant the interim order. The respondents
preferred appeais against the said order ?f the learned Single Judge but on
B
noticing that it would be more appropriate to dispose of the main matter itself,
the Division Bench of the High Court disposed of the writ petitions along with
the appeals arising out of the refusal to 'grant the interim orders thus necessitating
these appeals by special leave.

C Original Regulation 13(b) provided that "a Pilot could resign from his
service after giving 30 days' notice or offering one month's basic pay to the
employer in lieu of the said 30 days' notice" . However, in view of the
substitution of Regulation 13(b) by notification No. S.O. 134/(E) dated March

D
15, 1993, the respondent offered to quit the post but the appellant-Airlines did
n·ot allow the release of the respondent. The High Court examined in great
detail the scope of the provisions of the Air Corporations Act, 1953 [hereinafter
referred to as 'the Air Corporations Act') and the Rules framed thereunder with
--
reference to the Regulation. in question. The High Court discussed various
aspects of the matter, however, it did not deal with the challenge to the validity
of Regulation 13(b ), as such. Even after very careful examination of the order
E of the High Court, We do not find any discussion or consideration on the
question of validity of Regulation 13(b) in the entire order, except to allow the
writ petitions in their entirety. When the contentions put forth on behalf of the
parties or the arguments put forth by the learned Counsel on this aspect were
not considered qy the High Court, much less any reasons given in the order,
F we do not think, the High Court could have quashed the said Regulation. We
do not wish to express any opinion on the validity or otherwise of the said ..
Regulation inasmuch as the same has not been considereq by the High Court
in the impPgned order, except observing that the High Court has not considered
the same or decided the matter. Thus the relief granted by the High Court in
quashing Regulation 13(b). shall stand set aside. The question whether the
G Regulation 13(b) is valid or otherwise is kept open to be consider~d in a
proceeding that may arise hereafter. We are doing so particularly in view of
the fact that the respondents who obtained the relief at.the hands of the High
Court have remained ex parte in these proceedings. We had to request Shri V.R.
Reddy, the learned Senior Advocate, to assist the Court asAmicus Curiae, who
H has made very valuable contribution to the debate and we are beholden to him.
CHAIRMAN AND MANAGING DIRECTOR v. B.K. SINHA [RAJENDRA BABU, J.] 565
The relevant portion of the Circular AIC/3/93 dated February 25, 1993, A
as substituted, reads as follows :

" No Air Taxi Operator shall employ anyone already serving any of
the national Carriers, namely, Air India, Indian Airlines, Vayudoot and
Pawan Hans without obtaining a 'No Objection Certificate' from the.
employers with whom they are working. They shall further submit to B
DGCA a monthly return on pilots/engineers employed by them in a
specified proforma."

On behalf of the respondents it was contended before the High Court
that:
c
(1) The directions contained in the impugned amendment of AIC No. 24
of 1990 by AIC No. 3 of 1993 dated February 25, 1993 is ultra vires the powers
of the DGCA inasmuch as neither Section 5 nor Section 5A of the 1994 Act
nor sub-rule 3 of Rule 134 of the Aircraft Rules, 1937 confers any such power
to issue any such directions since the impu~ned AIC No. 3 of 1993 is a D
direction upon the Air Taxi Operator not to employ one serving any of the
natl.onal carriers including Indian Airlines without obtaining a 'No Objection
Certificate' from the employer and such direction was not given under any of
the statutory provision which were identified as the source of power by the
Government.
E
(2) The embargo placed on the employees of the national carriers does
not have any nexus with the safety of the Aircraft operation and safety. of
Aircraft operation units normal connotation would relate to the technical/
mechanical safeguards for safe Aircraft operation. The safety of Aircraft
operation has no relevance to Airtransport Services and the DGCA cannot
F
exercise any power under Section SA to give a direction in relation to Airtransport
Services.

(3) At any rate, the direction contained in AIC No. 3 of 1993 is
unconstitutional and void as it offends Article 14 of the Constitution as no
guidelines are provided for withholding or granting No .Objection Certificate; . G

(4) The impugned circular interferes with the freedom of a person to
engage himself in any work which he chooses and insistence upon obtaining
No Objection Certificate would amount to compelling a person to work under
an employer which would amount to 'forced labour' or 'begar' which is
violative of Article 23 of the Constitution. Further, such imposition would H
566 SUPREME COURT REPORTS [2001] SUPP. 3 S.C.R.
A affect Article 21 of the Constitution which includes the right to Jivelihood-
which connotes not merely animal existence but leading a life with dignity;

(5) The impugp.ed circular is violative of Article 19(1)(g) of the
Constitution which enables a citizen to carry on ·any occupation of his choice
and that right can be subjected only to reasonable restrictions and such reasonable
B restrictions can be made only by law;

(6) The impugned circular is also violative of Article 16 of the Constitution
which provides equality in the matter of public appointment and the impugned
circular has arbitrarily selected a class of citizens, that is, those who are serving
in the Indian Airlines, among other national carriers, have to obtain No Objection
c Certificate before leaving Indian Airlines to join Air Taxi Operators. However,
there is no such embargo on other pers_ons who are serving in foreign airlines
or in a Government Corporation and who want to join Air Taxi Operators.

The High Court is impressed with each one of these contentions in allowing
D the writ petitions.

The learned Additional Solicitor General contended. that the Air Craft
Act provides for control of operation of aircraft and Section 5(1) thereof
imposes a duty on the Central Government to secure the safety of aircraft
operations and this Section enables the Central Government to make rules for
E the purpose of fulfilling the said objects or duty; that Section 5(2) of the said
Act sets out various specific instances for exercise of powers under Section
5(1) in order to effectively fulfil the duty of care imposed on the Central
Government under the said provi~ion for securing the safety of Aircraft
operations; that under Aircraft Rules, Rule 134 has been framed and sub-rule
(3) thereof provides that air transport service shall be operated only with special
F
permission of the Central Gpvernment and subject to such terms and conditions
as it may think fit to imP.ose in each case; that Section 18 of the Air Corporations
Act reserved scheduled air transport services to the Indian Airlines Corporation
and Air India Corporation and the addition of sub-para XIV in para 9 to the
AIC No. 24 of 1990 is an instance of exercise of power under Sec~ion 5A of
G the said Act; that a duty is cast on the Government to provide safe, efficient,
adequate, economical and properly co-ordinated air transport services so as to
secure that the air transport services are developed to the best advantage and
in particular secure that the services are provided on reasonable charges; that
in obedience to the said duty enshrined in Section 7 of the Air Corporations
Act, Indian Airlines is required to and does provide air transport services all
H
CHAIRMAN AND MANAGING DIRECTOR v. B.K. SINHA [RAJENDRA BABU, J.] 567
over the country including far flung and uneconomical sectors as well inasmuch A
as Indian Airlines as a public carrier is required by law to provide its-sefijces
which are not only .safe, efficient and adequate but have also to be econoniical,
properly co-ordinated and charged with reasonable fares it cannot conduct
itself like a private taxi operator in disregard of its social obligations so clearly
spelt out and mandated in Section 7 of the Air Corporations Act; that in the
B
very. nature of things, therefore, the Indian Airlines must equip itself with
trained and efficient manpower vital for discharge of its obligations in law and
the Air Corporations Act, therefore, provides for certain terms and conditions
in relations to officers and other employees who can be appointed in
the Corporations under Section 8 of the Air Corporations Act; that
Regulation 13 has been framed in exercise of powers conferred by clause (b) c
of sub-section (2) of Section 45 of the Air Corporations Act as a measure of
safeguard. He, therefore, strongly contended that the view taken by the High
Court is incorrect.

Shri V.R. Reddy, learned Senior Advocate appearing as Amicus Curiae,
supported the view taken by the High Court and elaborated the various facets D
of the matter which are not very clear from the judgment of the High Court
by reference to the provisions of the Air Craft Act, the Air Corporations Act
and the pleadings and relevant enunciation of law made by this Court.

Rules can be framed under Section 5 of the Air Craft Act and the Aircraft
E
Rules [for short 'the Rules'] have been framed. Rule 134 thereof provides as
under :-

"134. Air Transport Services-

(1) Except as provided in the Air Corporations Act, 1953 (27 of
1953) it shall not be lawful for any person .other than the
F
Corporation or their associates to operate any scheduled air
transport service from, to, in, or across India:

Provided that the Central Government may, in accordance
with a,nd subject to the provisions contained in Scheduled XI, G
permit any person to operate any scheduled air transport service,
not for the time being operated by the Corporations or their
associates.

(2) The C:ntral Go~er~ment may permit any air transport undertaking
of which the pnnc1pal place of business is in any country outside H
568 SUPREME COURT REPORTS [2001] SUPP. 3 S.C.R.
A India to operate an air transport service from to, or across India
in accordance with the terms of any agreement for the time being
in force between the Government of India and the Government
of that Country, or, where there is no such agreement, of a
temporary authorization by the Government of India.

B (3) No air transport service, other than a scheduled air transport
service or an air transport service, to which the provisions of sub-
rule (1) or (2) apply, shall be operated except with the special
permission of the Central Government and subject to.such terms
and conditions as it may think fit to impose in each case."
c
Under Rule 133A of the Rules the DGCA is empowered to issue notices
to the Aircraft Owners and Maintenance Engineers and speeial directions not
inconsistent with the Aircraft Act or the Rules relating to the operation, use,
possession, maintenance or navigation of aircraft flying in or over India or of
aircraft registered in I.ndia.
D
In the present case, permits have been granted to operate scheduled air
transport services within India in terms of Rule 134 referred to above and such
permits provide as under:

"The validity of this ·Permit is subject to compliance with all the
E
relevant rules, regulations and also the conditions appended hereto and
any additional conditions which may be imposed by the Government
or the Director General.from time to time. Breach of any of the rules,
regulations or conditions shall render this Permit liable to suspension/
cancellation."[emphasis supplied]
F
Permits have been issued under Rule 134 of the Rules subject to the
conditions imposed therein and one of the conditions is that such additional
conditions which may be imposed by the Government or DGCA from time to
time, as is clear from the permit itself. The condition now imposed by the
G impugned Circular can be traced to this empowerment available under the said
permit. If the permit itself enables the Government or DGCA to impose the
conditions, it is very difficult to envisage that such power will have to be traced
to any other provision of the Air Craft Act or the Rules.

However, the arguments advanced on the other side is that the condition
H imposed in the impugned circular does not subserve the purposes of the enactment
CHAIRMAN AND MANAGING DIRECTOR v. B.K. SINHA [RAJENDRA BABU, J.] 569
nor falls within its scope. We may state that the power has been exercised by A
the Government in framing Rule 134 which enables the operation of an air
transport service by an undertaking other than the scheduled air transport
service or a foreign air transport service and that special permission of the
Central Government is subject to such terms and conditions as it may think fit
to impose in each case. And one of those conditions is as is referred to earlier
B
enabling the DGCA to impose appropriate conditions. Therefore, it is difficult
to accept the arguments that the impugned circular has been issued without any
power or authority under the Air Craft Act or the Rules. All arguments addressed
in this behalf ignore this factual aspect and hence the findings recorded by the
High Court to the contrary are not well founded.
c
The validity of Rule 134 of the Rules is not in challenge. What is in
challenge is only circular No. AIC/3/93 dated February 25, 1993 issued by the
DGCA. Rule 134( 1) debars any person other than the Corporation for operating
Air Transport Service, while Rule 134(3) provides that the permits can be
granted subject to certain terms and conditions and those terms and conditions, D
/
... in turn, include a condition of further terms and conditions being imposed by
the Government or DGCA. The objective of Rule 134 is not only based on the
Air Craft Act but also on various provisions of the Air Corporations Act. The
Air Corporations Act provides for establishment of Air Corporations to facilitate
the proper, economic and efficient services and the function of the Corporations
is to provide safe, efficient, adequate, economical and properly co-ordinated air E
transport services whether internal or international or both and the Corporations
shall so exercise their powers as to secure that the air transport services are
developed to the best advantages and that the services are provided at reasonable
charges. Rule 134(1) in carrying at these objectives clearly debars any person
other than a Corporation or its associates to operate any scheduled air transport F
service. While Rule 134(3) makes other air transport services being permitted
subject to conditions to be imposed by Government or DGCA to which we
have already adverted to. If the effect of Clause (1) of Rule 134 is borne in mind
it cannot be said that these objectives are out of place in interpreting the effect
of sub-rule (3) of Rule 134. Viewed from that angle, we think, the circular in G
question falls within the scope of the enactment and the Rul~s made therein.

Now, what needs to be examined is whether the circular issued offends
any of the provisions of the Constitution or such embargo has any nexus with
the safety of the air craft operation and has any relevance to the air transport
services. H
570 SUPREME COURT REPORTS [2001] SUPP. 3 S.C.R.
A The arguments on behalf of the writ petitioners are based on Articles 14,
19(1)(g), 16, 21and23 of the Constitution only with reference to the implication
arising out of the embargo imposed upon the employees of the national carriers
that they cannot' resign from employment except after a notice of six months
as provided for in Regulation 13(b) framed under the Air Corporations Act. If
B . in violation of such conditions, employees of the national carriers can leave
their employment and join the employment in any other air service is a matter
affecting the operation of the air carriers and, therefore, to give effect to that
obJective underlying Regulation l 3(b} if the circular is issued, we cannot term
it to. be invalid. If the provision of Regulation 13(b) is valid in law and in
violation of which an employee seeks to join employment with an air taxi
c operator, the restrfotion in the circular cannot be an infringement of his rights
arisiilg under Articles 14; 16, 19(l)(g), 21 and 23 of the Constitution. The
argument to the contrary is far-fetched because an employee ~hen joins service
is subject to certain terms and conditions of service and he cannot quit· the
employment without giving requisite notice to the employer. But what should
D be the duration of a reasonable notice in such circumstances is a matter to be
decided in each case depending upon the· exigencies, needs or necessities and
the essentiality of the service concerned. In the present case, no such exercise
-
has been done.by the High Court to find out whether Regulation 13(b) is valid
or not. When validity or scope of that Regulation has not been examined, the
E impact of the Regulation on the circular also could not be examined. The High
Court completely went off the track in examining the broad questions arising
under Articles 14, 16, 19(l)(g), 21 and 23 of the Constitution. If a person is
in employment he is certainly subject to certain terms and conditions and he
can quit his employment under those terms and conditions only which cannot
be stated to be violative of Articles 14, 16, 21 and 23, much less Article
F 19(1 )(g) o-f the Constitution unless on examination such conditions are held
invalid.

The argument that the embargo is only upon the Air Taxi Operators
and not upon other employers is misconceived because there is no material
G to indicate as to what is the position in relation to each one of these
other organisations is and whether any permit as contemplated under Rule 134
is granted to them or not and when th.:: direction is issued only to such
permit holders as falling within the scope of Rule 134(3) forming a separate
class and that class alone is subject to che present treatment cannot be violation
H of Article 14.
CHAIRMAN AND MANAGING DIRECTOR v. B.K. SINHA [RAJENDRA BABU, J.] 571
We are also not impressed with the view taken by the High Court that A
the negative covenant of not being employed would be attracted in a case of
this nature because during employment certainly an obligation can be placed
upon an employee that he shall not be employed by any other organisation or
institution and it neither offends Article 19(1)(g) nor the provisions of the
Contract Act.
B
Hence, none of the reasons set forth by the High Court are tenable and,
therefore, the order made by the High Court needs to be set aside.

Further we must notice that during the pend~ncy of these proceedings
Air Corporations (Transfer of Undertakings and Repeal) Act, 1994 (Act 13 of
1994) has come into force and we have not examined the scope of the impact
c
of the repeal of the Air Corporations Act upon the scope of circular in question
since at the time of the issue of the circular and at the time when the High Court ·
considered the matter, the said enactment had not come into force,

The appeals are allowed accordingly. No costs. D
N.J. Appeals allowed.