AIR CORPORATIONS (TRANSFER OF UNDER-TAKINGS AND REPEAL) ACT 1994

THE AIR CORPORATIONS (TRANSFER OF UNDER-TAKINGS AND REPEAL) ACT,1994

ACT No. 13 OF 1994

21stmarch, 1994

An Act to provide for the transfer and vesting of the undertakingsof Indian Airlines and Air India respectively to and in the companies formed andregistered as Indian Airlines Limited and Air India Limited and for mattersconnected therewith or incidental thereto and also to repeal the AirCorporations Act, 1953.

BE it enacted by Parliament inthe Forty–fifth year of the Republicof India as follows; –

1.Short title and commencement: (1) This Act may be called theAir Corporations (Transfer of Undertakings and Repeal) Act, 1994.

(2) It shall be deemed to havecome into force on the 29th day of January, 1994/

2.Definitions: In this Act, unless the context otherwise requires;–

(a) appointedday, means such date as the Central Government may, by notification in theOfficial Gazette, appoint under section 3.

(b) "Company" means"Indian Airlines Limited" or"Air India Limited" formed and registered under theCompanies Act, 1956 (1 of 1956) ;

(c) "corporation"means "Indian Airlines" and "Air India" established undersection 3 of the Air Corporations Act, 1953 (27 of 1953) and"corporation" means either of the corporations.

3.Undertakings of corporations to vest incompanies: On such date as the CentralGovernment may, by notification in the Official Gazette, appoint, there shallbe transferred to and vest in –

(a) Indian Airlines Limited,the undertaking of Indian Airlines; and

(b) Air India Limited, theundertaking of Air India.

4.General effect of vesting ofundertakings in the companies: (1) The undertaking of a corporation which is transferred to, andwhich vests in, a company under section 3 shall be deemed to include allassets, rights, powers, authorities and privileges and all properties, movableand immovable, real or personal, corporate or incorporate in possession orreservation, present or contingent, of whatever nature and wheresoeversituate, including lands, words, workshops, aircraft cash balances, capitalreserves, reserve funds, investment, tenancies , leases and book debts and allother rights and interest arising out of such property as were immediatelybefore the appointed day in the ownership, possession or power of that Corporationin relation to its undertaking, whether within or outside India, all books ofaccount and documents relating thereto and shall also be deemed to include allborrowings, liabilities and obligation of whatever kind then subsisting of thatcorporation in relation to its undertaking.

(2) All contracts and workingarrangement subsisting immediately before the appointed day and affecting acorporation shall, in so far as they relate to the undertaking of thatcorporation cease to have effect or to be enforceable against that corporationand shall be of as full force and effect against or in favourof the company in which the undertaking has vested by virtue of this Act, andenforceable as fully and effectually as if, instead of the corporation, the companyhad been named therein or had been a party thereto.

(3) Any proceeding or cause ofaction pending or existing immediately before the appointed day by or against acorporation in relation to its undertaking, may, as from that day, be continuedand enforced by or against the company in which it has vested by virtue of thisAct, as it might have been enforced by or against that corporation if this act,had not been passed, and shall cease to be enforceable by or against that corporation.

5.Licences etc., to be deemed to havebeen granted to companies: With effect from the appointed day, all licences,permits quotas and exemptions granted to a corporation under any law for thetime being in force shall be deemed to have been granted to the company in whichthe undertaking of that corporation has vested.

6.Tax exemption or benefit tocontinue to have effect: (1) Where any exemption from, or any assessment with respect to,any tax has been granted or made or any benefit by way of set off or carryforward, as the case may be, of any unabsorbed depreciation or investmentallowances or other allowances or loss has been extended or is available to acorporation under the Income –tax Act, 1961, such exemption, assessmentor benefit shall continue to have effect in relation to the company in whichthe undertaking of that Corporation has vested.

(2) Where any payment made by acorporation is exempt from deduction of the tax at source under any provisionof the Income–tax Act, 1961, the exemption from tax will continue to beavailable as if the provisions of the said Act, made applicable to thecorporation were operative in relation to the company in which the undertakingof that corporation has been vested.

(3) The transfer and vesting ofthe undertaking or any part thereof terms of section shall not be construed asa transfer within the meaning of the Income–tax Act, 1961 (43 of 1961)for the purpose of capital gains.

7.Guarantee to be operative: Any guarantee given for or in favour of a corporation with respect to any loan or leasefinance shall continue to be operative in relation to the company in which theundertaking of that corporation has vested by virtue of this Act.

8.Provisions in respect ofofficers and other employees of corporations: (1) Every officer or other employee of acorporation (except a Director of the Board, Chairman, Managing Director or anyother person entitled to manage the whole or a substantial part of the businessand affairs of the corporation) serving in its employment immediately beforethe appointed day, shall, in so far as such officer or other employee isemployed in connection, with the undertaking which has vested in a company by avirtue of this Act, become as from the appointed day, an officer or otheremployee , as the case may be, of the company in which the undertaking hasvested and shall hold his office or service therein by the same tenure at the same remuneration,upon the same terms and conditions , with the same obligations and with thesame rights and privileges as to leave, passage, insurance, superannuationscheme, provident Fund, other funds, retirement, pension, gratuity and otherbenefits as he would have held under that corporation if it undertaking had notvested in the company and shall continue to do so as an officer or otheremployee, as the case may be, of the company or until the expiry of the periodof six months from the appointed day, if such officer or other employee optsnot to be the officer or other employeeof the company within such period.

(2) Where an officer or otheremployee of a corporation opts under sub–section (1) not to be in theemployment or service of the company in which the undertaking of thatcorporation has vested such officer or other employee shall be deemed to haveregistered.

(3) Notwithstanding anythingcontained in the Industrial Disputes Act, 1947 (14 of 1947) or in any other lawfor the time being in force, the transfer for the services of any officer orother employee of a corporation to a company shall not entitle such officer orother employee to any compensation under this Act, or under any other law forthe time being in force and no such claim shall be entertained by any Court,tribunal or other authority.

(4) The officers and otheremployees who have retied before the appointed day from the services of acorporation and are entitled to any benefits, rights and privileges shall beentitled to receive the same benefits, rights or privileges from the company inwhich the undertaking of that corporation has vested.

(5) The trust of the ProvidentFund or Pilots Group Insurance and Superannuation Scheme of the Corporation andany other bodies createdfor the welfare ofofficers or employees would continue to discharge their functions in thecompany as was being done hitherto in the corporation. Tax Exemptiongranted to Provident Fund or Pilots Group Insurance and Superannuation Schemewould continue to be applied to the Company.

(6) Notwithstanding anythingcontained in this Act, or in the Companies Act, 1956 (2 of 1956) or in anyother law for the time being in force or in the regulations of a corporation,no Director of the Boar, Chairman, Managing Director or any other personentitled to manage the whole or a substantial part of the business and affairsof that Corporation shall be entitled to any compensation against thatcorporation or against the company, as the case may be, for the loss of officeor for the premature termination of any contract of management entered into byhim with that corporation.

9.Power of Central Government to givedirections: TheCentral Government may give to a company directions as to the exercise andperformance by that company of its functions, and that company shall be boundto give effect to any such directions.

10.Powerto remove difficulties: (1) If any difficulty arises in giving effect to the provisionsof this Act, the Central Government may, by order published in the OfficialGazette, not inconsistent with the provisions of this act, remove thedifficulty:

Provided that no such ordershall be made after the expiry of a period of two years from the coming intoforce of this Act.

(2) Every order made under sub–section(1) shall be laid before each House of Parliament.

11.Repealof Act 27 of 1953 and cesser of corporations: (1) On the appointed day theAir Corporations Act, 1953 shall stand repealed.

(2) The corporations shall,with the repeal of the Air Corporations Act, 1953 cease to exist.

12.Repealand saving: (1) TheAir Corporations (Transfer of undertakings and Repeal) Ordinance, 1994 ishereby repealed.

(2) Notwithstanding such repealof the Air Corporations (Transfer of Undertakings and Repeal) Ordinance, 1994anything done or any action taken under the said Ordinance shall be deemed tohave been done or taken under the corresponding provisions of this Act.

*