Authority: Supreme Court of India, Civil Appellate Jurisdiction
Order Date: 03 August 2026
Case Overview
- Parties: Air India Limited (appellant) vs. All India Aircraft Engineers Association & Anr. (respondent No.1) and Union of India (respondent No.2).
- Background: A settlement was entered on 27 July 2007, which later gave rise to further litigation. The matter proceeded to mediation, then an arbitrator was appointed by this Court.
- Arbitration Award: Dated 25 May 2016, the arbitrator awarded wage arrears with interest at 12% per annum from 01‑08‑2006 to 25‑05‑2016 and post‑award interest at 18% on principal plus accrued interest. The award was digitally signed by Neha Gupta.
- The award was affirmed by a learned Single Judge and subsequently by a Division Bench under Sections 34 and 37 of the Arbitration and Conciliation Act, 1996.
- Legal References: The Court cited Gayatri Balasamy Vs. ISG Novasoft Technologies Limited (2025) 7 SCC 1, emphasizing that interest awards must be justified by facts.
- Additional Context: The wage arrears relate to the period from 01‑01‑1997. Air India is the successor in interest of the erstwhile company, taken over in 2022. Employees have been awaiting the award for approximately twenty years.
Final Outcome
- The Court did not interfere with the impugned order except to modify the interest component.
- Interest payable under the award is modified to 12% per annum from 01‑08‑2006 until the date of payment or deposit, eliminating the previously stipulated 18% post‑award interest as excessive.
- The award amount, together with the revised interest, must be deposited by Air India in the pending execution proceedings expeditiously, and in any event within six months, in three equal installments from the date of this order.
- The appeals (Civil Appeal No. /2026 @ SLP (C) No.12972/2026 and Civil Appeal No. /2026 @ SLP (C) No.13523/2026) are disposed of. Any pending applications, if any, stand disposed of.
- The order is signed by Hon'ble Justices Aravind Kumar and Vipul M. Pancholi.
Topics: Wage Arrears, Interest Modification, Labour Dispute