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Air India, Indian Airlines merger challenged in HC

business Updated: Nov 25, 2007 13:04 IST

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Merger of national carriers Air India and Indian Airlines has been challenged in the Bombay High Court on the ground that it defies Parliament's intent to keep international and domestic carriers separate.

The petition filed by Air India Cabin Crew Association (AICCA) also questions the Constitutional validity of section 620 of Companies Act, which empowers government to exempt any government company from provisions of the Act.

Air India Limited and Indian Airlines Limited were created by a Parliamentary statute, and, therefore, without the Parliament's nod they cannot be amalgamated, the petition contended.

AICCA claims to the "sole recognised trade union" in Air India Limited, and has 1,800 members. The petition is expected to come up for hearing in the first week of December.

The merger (amalgamation) of AI and IA was sanctioned by the Ministry of Corporate Affairs on August 22 this year. The move was aimed at bringing about more efficiency and better utilisation of resources. A new company called National Aviation Company of India was created to replace them.

However, AICCA contends that in sanctioning the amalgamation, Parliament was bypassed.

Tracing the history of the national carriers, it points out that in 1953, eight private airlines were nationalised under Air Corporations Act, which created AI and IA. Further, in 1994, Air Corporations (Transfer of Undertakings and Repeal Act) Act was passed, which converted AI and IA into Air India Limited and Indian Airlines Limited, respectively.