Merger of national carriers Air India and Indian Airlines has been challenged in the Bombay HC by Air India Cabin Crew Association (AICCA).
MUMBAI: 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 nationalized 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.
It goes on to contend that Parliament's intention was always that assets of two airlines should continue to vest in AIL and IAL and national and domestic carriers must remain separate.
Scheme of amalgamation, which does not have Parliament's approval, flies in the face of this policy, the petition says.
Further, it questions section 620 of the Companies Act, which allows government to take its corporations out of purview of the Act.
Empowered by this Section, the government had in 1978 issued a notification stating that for merger or demerger of government corporations, High Court's permission would not be needed.
Ordinarily, no merger or demerger is complete unless it is approved by the High Court.
The petition says that this notification violates the judiciary's power to review government's decision. "It displaces a judicial process and reposes it in a civil servant of the rank of joint secretary," says the petition.
It also points out that there is no provision of appeal against the decision of joint secretary when he/she decides on the merger.
Therefore, section 620 be struck down, the petition demands, apart from seeking reversal of merger.
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