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AIAEA against IA and AI amalgamation with NAC

The Air India Aircraft Engineers’ Association (AIAEA) has challenged the scheme of amalgamation of AI and IA with the National Aviation Company of India Limited, reports Bhadra Sinha.

india Updated: Jul 26, 2007 20:15 IST
Bhadra Sinha
Bhadra Sinha
Hindustan Times

The Air India Aircraft Engineers’ Association (AIAEA) has challenged the scheme of amalgamation of Air India Limited and Indian Airlines Limited with the National Aviation Company of India Limited before the Ministry of Company Affairs. AIAEA has claimed it is a creditor of Air India and, therefore, a unilateral decision to merge the two Airlines suffers from legal infirmity. The association has urged the Ministry to resolve the key pending issues concerning its members before approving the scheme.

According to the petitioner there are two issues between the Air India management and employees that remain unresolved. The charter of demand (COD) that was accepted by the management in 1997 had accepted the wage settlement scheme for the employees and also a review and payment of productivity linked incentive. However, despite accepting the COD, the Air India management has failed to expedite the wage negotiations that are pending for the past 10 years.

AIAEA has submitted that considering the non-payment of substantial overdues, the association’s members are the creditors of Air India and their consent to the terms of the scheme is mandatory. Advocate ML Lahoty who has filed the petition on behalf of AIAEA explains:”A specific section of the Companies Act states categorically that before such a merger the creditors should be heard to safeguard their interest. As the consent has not been obtained, the scheme of amalgamation is, legally, not permissible.”

Seeking amendment of the amalgamation scheme, the petitioner wants the Ministry of Company Affairs to ensure that the transferor or the transferee companies undertake to continue and abide by the settlement entered between the AIAEA and the Air India Management.

Lahoty says despite last year's Bombay high court directing the management to adhere to the COD, the latter have failed to implement it. The high court had in November 2006 asked the management to resolve the dispute within a specific time frame.

First Published: Jul 26, 2007 20:10 IST