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Hold all decisions on AI-IA merger: court

The Delhi HC seeks a response from the central government on a petition challenging the merger of Air India and Indian Airlines, reports Harish V Nair.

india Updated: Sep 21, 2007 03:21 IST
Harish V. Nair

THE DELHI High Court on Thursday put on hold any further administrative decision on the merger of Air India and Indian Airlines as it sought a response from the central government on a petition challenging the merger.

A bench headed by Chief Justice M.K. Sharma, after hearing the arguments of the Cabin Crew Association of Air India which challenged the merger, directed the Centre, Air India and Indian Airlines to file their response by October 30 when it will take up the matter for further hearing.

Challenging the merger, senior advocate Arun Jaitley, appearing for the association, argued: “The merger of Indian Airlines and Air India stands on a different footing from other mergers. These companies have been incorporated by statute and they can’t merged without amending the law.”

He also referred to the Supreme Court judgment in the HPCL-BPCL merger case in which it was held that companies incorporated by a statute of Parliament cannot be merged without approval of the legislative body. “How can a joint secretary be empowered to take a decision on the merger of two separate companies incorporated under the law,” Jaitley asked, challenging the notification issued by the government on the merger of the two state-run carriers.

Another petition filed by the engineers’ association of these carriers, seeking payment of wage arrears, will come up before the court on Friday. The petition also questioned how the two carriers were merged without first settling arrears owed to its employees. The association alleged that Air India owed more than Rs 350 crore in arrears toward wages and other incentives, whereas Indian Airlines owed more than Rs 1,100 crore to employees.