AIR CORPORATIONS ACT, 1953
(1) This Act may be called the Air Corporations Act, 1953.
(2) It shall come into force on such date1 as the Central Government may, by notification in the Official Gazette, appoint.
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1. Came into force on 28-5-1953, vide S.R.O. 968A, published in Gazette of India, Extra., Pt. II, Sec. 3, dated 28th May, 1953.
The Act has been extended to the Union Territories of Goa, Daman and Diu by the Goa, Daman and Diu (Laws) Regulation, 1962 (12 of 1962) (w.e.f. 1-2-1965), to Dadra and Nagar Haveli by the Dadra and Nagar Haveli (Laws) REgulation, 1963 (6 of 1963), (w.e.f. 1-7-1965); and to Pondicherry by the Pondicherry (Laws) REgulation, 1963 (7 of 1963), (w.e.f. 1-10-1963).
In this Act, unless the context otherwise requires,—
(i) “aircraft” means any machine which can derive support in the atmosphere from reactions of the air and includes balloons, whether fixed or free, airships, kites, gliders and flying machines;
(ii) “air transport service” means a service for the transport by air of persons, mails or any other thing, animate or inanimate, for any kind of remuneration whatsoever, whether such service consists of a single flight or a series of flights;
(iii) “associate” in relation to either of the corporations means any subsidiary of the corporation or any person with whom the corporation has made an agreement in accordance with clause (h) of sub-section (2) of section 7;
(iv) “Cor
(1) With effect from such date as the Central Government may, by notification in the Official Gazette, appoint, there shall be established two Corporations to be known as “Indian Airlines” and “Air India International”.*
(2) Each of the Corporations aforesaid shall be a body corporate having perpetual succession and a common seal with power, subject to the provisions of this Act, to acquire and hold property, and may by its name sue and be sued.
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* Renamed as “Air India” vide S.O. 1676, dated 23rd May, 1962, as per Act 17 of 1962, sec. 7.
1[(1) The general superintendence, direction and management of the affairs and business of each of the Corporations shall vest in a Board of directors which may exercise all such powers and do all such acts and things as may be exercised or done by the Corporation under this Act.
(lA) The Board of directors shall consist of a Chairman to be appointed by the Central Government, and not less than eight and not more than fourteen other directors to be appointed by the Central Government and the Chairman or any other director may be required to render whole-time or part-time service as the Central Government may direct:
Provided that—
(a) the same person may be appointed to be the Chairman of both the Corporations or Chairman of one and director of the other;
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(1) The Chairman and other 2[directors] of each of the Corporations shall ordinarily be entitled to hold office for the period specified in the order of appointment, unless the appointment is terminated earlier by the Central Government:
Provided that any 2[director] may at any time by notice in writing addressed to the Central Government resign his office.
(2) Subject to the previous approval of the Central Government, each of the Corporations shall pay to every 2[director] thereof in respect of his office as such, 2[such remuneration by way of salary, allowances], fees or otherwise as may be determined by the Corporation, and to the Chairman in respect of his office as such, such remuneration, whether in addition to the remuneration to which he may be entitled in respect of his office as a 2[director] or otherwise, as it may similarly
No act or proceeding of either of the Corporations shall be deemed to be invalid by reason merely of any vacancy in, or any defect in the constitution of, the Corporation.
(1) Subject to the rules, if any, made by the Central Government in this behalf, it shall be the function of each of the Corporations to provide safe, efficient, adequate, economical and properly co-ordinated air transport services, whether internal or international or both, and the Corporations shall so exercise their powers as to secure that the air transport services are developed to the best advantage and, in particular, so exercise those powers as to secure that the services are provided at reasonable charges.
(2) Without prejudice to the generality of the powers conferred by sub-section (1), each of the Corporations shall, in particular, have power—
(a) to operate any air transport service, or any flight by aircraft for a commercial or other purpose, and to carry out all forms of aerial work;
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(1) For the purpose of enabling it efficiently to discharge its functions under this Act each of the Corporations shall appoint a 1[managing director] and, subject to such rules as may be prescribed in this behalf, may also appoint such number of other officers and employees as it may think necessary:
Provided that the appointment of the 1[managing director] and such other categories of officers as may be specified after consultation with the Chairman in such rules shall be subject to the approval of the Central Government.
(2) Subject to the provisions of section 20, every person employed by each of the Corporations shall be subject to such conditions of service and shall be entitled to such remuneration and privileges as may be determined by regulations made by the Corporation by which he is employed.
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In carrying out any of duties vested in it by this Act, each of the Corporations shall act so far as may be on business principles.
(1) All non-requiring expenditure incurred by the Central Government for, or in connection with, each of the Corporations up to the date of establishment of that Corporation and declared to be capital expenditure by that Government, shall be treated as capital provided by the Central Government to that Corporation.
(2) The Central Government may provide any further capital that may be required by either of the Corporations for the carrying on of the business of the Corporation or for any purpose connected therewith on such terms and conditions as the Central Government may determine.
(3) Each of the Corporations may, with the consent of the Central Government, or in accordance with the terms of any general authority given to it by the Central Government—
(a) borrow money for all or any
All properties, assets and funds owned or acquired by the Central Government for the purpose of Indian Airlines or, as the case may be, Air-India International before the establishment of those Corporations shall, on such establishment, vest in the Corporation concerned.
(1) Each of the Corporations shall have its own funds and all receipts of the Corporation shall be carried thereto and all payments for the Corporation shall be made therefrom.
(2) Each of the Corporations may keep in 1[account] with any scheduled bank as defined in section 2 of the Reserve Bank of India Act, 1934 (2 of 1934) or in any other bank approved by the Central Government in this behalf a sum of money not exceeding such amount as may be prescribed, but any moneys in excess of the said sum shall be deposited in the Reserve Bank of India or with the agents of the Reserve Bank of India or invested in such manner as may be approved by the Central Government.
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1. Subs. by Act 49 of 1971, sec. 6 (w.e.f. 1-2-1972).
Each of the Corporations shall have power, subject to the provisions of this Act, to spend such sums as it thinks fit on objects or for purposes authorised by this Act and such sum shall be treated as expenditure out of the funds of that Corporation.
All obligations incurred, all contracts entered into and all matters and things engaged to be done by, with, or for the Central Government for any of the purposes of this Act before the establishment of either of the Corporations shall be deemed to have been incurred, entered into or engaged to be done by, with or for Indian Airlines or, as the case may be, Air India International according as the obligations, contracts, matters and things relate to the purposes of the former Corporation or the latter.
(1) The Corporations shall maintain proper accounts and other relevant records and prepare an annual statement of accounts, including the profit and loss account and the balance sheet in such form as may be prescribed by the Central Government in consultation with the Comptroller and Auditor-General of India.
(2) The accounts of the Corporations shall be audited annually by the Comptroller and Auditor-General of India and any expenditure incurred by him in connection with such audit shall be payable by the Corporations to the Comptroller and Auditor-General of India.
(3) The Comptroller and Auditor-General of India and any person appointed by him in connection with the audit of the accounts of the Corporations shall have the same rights and privileges and authority in connection with such audit as the Comptroller and Auditor-General has
On such date as the Central Government may, by notification in the Official Gazette, appoint (hereinafter referred to as “the appointed date”), there shall be transferred to and vest in—
(a) Indian Airlines, the undertakings of all the existing air companies (other than Air India International Ltd.), and
(b) Air India International, the undertaking of the Air India International Ltd.
(1) The undertaking of each of the existing air companies which is transferred to and which vests in either of the Corporations under section 16 shall, subject to the provisions of section 22, be deemed to include all assets, rights, powers, authorities and privileges and all property, movable and immovable, including lands, works, workshops, aircraft, cash balances, reserve funds, investments and book debts and all other rights and interests arising out of such property as were immediately before the appointed date in the ownership, possession or power of the existing air company in relation to the undertaking, whether within or without India, and all books of account and documents relating thereto, and, subject to the provisions contained in section 22, shall also be deemed to include all borrowings, liabilities and obligations of whatever kind then subsisting of the existing air company in relation to the undertaking.
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(1) After the appointed date, it shall not be lawful for any person other than the Corporations or their associates to operate any scheduled air transport service from, to, in or across India:
Provided that nothing in this section shall restrict the right of any person,—
(a) for the purpose of any air transport undertaking of which the principal place of business is in any country outside India, to operate an air transport service, in accordance with the terms of any agreement for the time being in force between the Government of India and the Government of that country; or
(b) to carry passengers for the sole purpose of instructing them in flying or on duties of aircrews; or
(c) to carry passengers or goods for the sole purp
With effect from the appointed date, all licences granted under the Indian Aircraft Act, 1934 (22 of 1934) or under the rules made thereunder for the operation of scheduled air transport services shall cease to be valid.
(1) Every officer or other employee of an existing air company (except a director, managing agent, manager or any other person entitled to manage the whole or a substantial part of the business and affairs of the company under a special agreement) employed by that company prior to the first day of July, 1952, and still in its employment immediately before the appointed date shall, in so far as such officer or other employee is employed in connection with the undertaking which has vested in either of the Corporations by virtue of this Act, become as from the appointed date an officer or other employee as the case may be, of the Corporation in which the undertaking has vested and shall hold his office or service therein by the same tenure, at the same remuneration and upon the same terms and conditions and with the same rights and privileges as to pension and gratuity and other matters as he would have held the same under the e
(1) Where any property has vested in either of the Corporations under section 16, every person in whose possession or custody or under whose control the property may be, shall deliver up the property to the Corporation concerned forthwith.
(2) Any person who on the appointed date has in his possession or under his control any books, documents or papers relating to any undertaking which has vested in either of the Corporations under this Act and which belong to an existing air company or would have so belonged if its undertaking had not so vested shall be liable to account for the said books, documents and papers to the Corporation in which the undertaking has vested and shall deliver them up to the Corporation or to such person as the Corporation may direct:
Provided that the Corporation shall produce for inspection by such companies or
(1) Where the undertaking of an existing air company vests in either of the Corporations under this Act, the existing air company shall, within thirty days from the appointed date or within such further time as the Corporation concerned may allow in any case, supply to the Corporation particulars of book debts and investments belonging to and all liabilities and obligations of the company subsisting immediately before the appointed date, and also of all agreements entered into by the existing air company and in force on the appointed date, including agreements, whether express or implied, relating to leave, pension, gratuity and other terms of service of any officer or other employee of the existing air company, under which by virtue of this Act the Corporations have or will or may have liabilities except such agreements as the Corporation may exclude either generally or in any particular case from the operation of this sub-s
(1) Where it appears to either of the Corporations that the making of any such agreements as is referred to in section 22 under which the Corporation has or will have or may have liabilities was not reasonably necessary for the purposes of the activities of the existing air company or has not been entered into in good faith, the Corporation may, within 1[one year] from the appointed date, apply to the Tribunal for relief from such agreement, and the Tribunal, if satisfied after making such inquiry into the matter as it thinks fit that the agreement was not reasonably necessary for the purposes of the activities of the existing air company or has not been entered into in good faith, may make an order cancelling or varying the agreement on such terms as it may think fit to impose and the agreement shall thereupon have effect accordingly.
(2) All the parties to the agreement which is
(1) This section shall apply where any existing air company has, after the first day of July, 1952, and before the appointed date,--
(a) made any payment to any person without consideration or for an inadequate consideration;
(b) sold or disposed of any of its properties or rights without consideration or for an inadequate consideration;
(c) acquired any property or rights for an excessive consideration;
(d) entered into or varied any agreement so as to require an excessive consideration to be paid or given by the company;
(e) entered into any other transaction of such an onerous nature as to cause a loss to or impose a liability on the company exceeding any benefit accruing to the company; or
(1) Where the undertaking of any of the existing air companies has vested in either of the Corporations under this Act, compensation shall be given by the Corporation to that company in the manner specified in section 27 and the amount of such compensation shall be determined in accordance with the principles specified in the Schedule to this Act.
(2) Notwithstanding that separate valuations are calculated under the principles specified in the Schedule in respect of the several matters referred to therein, the amount of compensation to be given shall be deemed to be a single compensation to be given for the undertaking as a whole.
(3) The amount of the compensation to be given in accordance with the aforesaid principles shall be determined by the Corporation and if the amount so determined is approved by the Central Government, it shall
(1) The Tribunal to be constituted under section 25 shall consist of three members appointed by the Central Government, one of whom shall be a person who is or has been a Judge of a High Court or has been a Judge of the Supreme Court.
(2) The Tribunal may for the purpose of deciding any matter under this Act choose one or more persons possessing special knowledge of any matter relating to the case under inquiry to assist it in determining any compensation which is to be given under this Act.
(3) The Tribunal shall have the powers of a civil court while trying a suit under the Code of Civil Procedure, 1908 (Act 5 of 1908) in respect of the following matters:—
(a) summoning and enforcing the attendance of any person and examining him on oath;
(1) When the amount of compensation to be given under this Act to an existing air company has been determined under section 25, the Corporation shall give to the company one or more bonds of the face value of the amount of compensation so determined less such portion thereof as is payable in cash under this section.
(2) Out of the compensation to be given to each of the existing air companies under this Act, there shall be paid in cash—
(a) ten per cent of the amount of compensation payable to each of such companies (which percentage shall be uniformly applicable to all existing air companies); or
(b) the amount borrowed by any such company from any bank and outstanding on the 31st day of December, 1952, or on the appointed date, whichever amount is less; or
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(1) The Central Government may, on the application of any existing air company or on the application of a majority in number representing three-fourths in value of its members holding ordinary shares, by order in writing, authorise the existing air company the undertaking of which has vested in either of the Corporations, to be wound up voluntarily in accordance with the provisions of the Indian Companies Act, 1913 (7 of 1913) relating to voluntary winding up:
Provided that—
(a) the winding up of the company shall commence on the day on which the Central Government authorises the winding up without the passing by the company of any special or other resolution for winding up; and
(b) the directors of the existing company shall not be under an obligation to make any such statutor
Any authorisation granted under section 28 may include a direction requiring an existing air company the voluntary winding up of which has been authorised under that section to distribute its net assets among the various classes of members of the company in such proportion as the Central Government may, having regard to the amount subscribed by each class of such members or having regard to the circumstances relating to the issue of the shares to the various classes of members, specify in the direction, and any such direction shall have effect notwithstanding anything contained in the Indian Companies Act, 1913 (7 of 1913) or in the articles of association or resolution of the company or in any agreement, and every such company shall be bound to comply with any such direction.
1[(1)] 2[The Central Government may, from time to time, by notification in the Official Gazette, constitute] an Air Transport Council consisting of a Chairman and such other number of members not exceeding eleven as the Central Government may appoint thereto:
Provided that amongst the members to be so appointed there shall at least be one person with experience in financial matters and one person who is an employee of either of the Corporations with experience in labour matters.
3[(2) If at any time the Central Government, is of opinion that the continued existence of an Air Transport Council is not necessary, it may, by notification in the Official Gazette, declare that the Air Transport Council shall be dissolved with effect from such date as may be specified in the notification, and thereupon the Air Transport Council shall be deemed
(1) It shall be the duty of the Air Transport Council to consider—
(a) at the request of either of the Corporations any matter of the kind referred to in section 38; and
(b) any matter of importance which may be referred to it by the Director General of Civil Aviation or the Director General of Posts and Telegraphs relating to matters of common interest, between either of the Corporations and the Director General of Civil Aviation, or as the case may be, the Director General of Posts and Telegraphs, including rates for the carriage of postal articles by air, and to make recommendations thereon to the Central Government.
(2) At the request of the Central Government, the Air Transport Council shall investigate any matter relating to the fares, freight rates or other charges levie
The Council shall have a Secretary and such other employees as the Central Government may appoint, and the expenditure on the staff and other charges of the Council shall be borne by the Central Government.
(1) The Council shall regulate its own procedure.
(2) No proceeding of the Council shall be deemed to be invalid by reason merely of any vacancy in, or any defect in the constitution of, the Council.
(1) The Central Government may give to either of the Corporations directions as to the exercise and performance by the Corporation of its functions, and the Corporation shall be bound to give effect to any such directions.
(2) The Central Government may, if it is of opinion that it is expedient in the national interest so to do, after consultation with the Corporation concerned, direct either of the Corporations—
(a) to undertake any air transport service or other activity which the Corporation has power to undertake;
(b) to discontinue or make any change in any scheduled air transport service or other activity which it is operating or carrying on;
(c) not to undertake any activity which it proposes to do:
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Neither Corporation shall, without the previous approval of the Central Government—
(a) undertake any capital expenditure for the purchase or acquisition of any immovable property or aircraft or any other thing at a cost exceeding 1[such amount as the Central Government may, from time to time, by order, fix in the behalf];
(b) enter into a lease of any immovable property for a period exceeding 2[ten years]; or
(c) in any manner dispose of any property, right or privilege having an original or book value exceeding 1[such amount as the Central Government may, from time to time, by order, fix in this behalf].
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1. Subs. by Act 24
(1) Each of the Corporations shall prepare and submit to the Central Government, not less than 1[two months] before the commencement of the financial year of the Corporation a statement showing the programme of operation and development of air transport services to be operated by the Corporation and its associates during the forthcoming financial year and its other activities as well as its financial estimates in respect thereof, including any proposed investment of capital and increase in the strength of its total staff.
(2) If, during any financial year, either of the Corporations engages or proposes to engage in any air transport service or ancillary activity in addition to those specified in the programme previously submitted under sub-section (1) and a substantial alteration of the financial estimates is likely to be involved thereby, the Corporation shall submit to the Centra
(1) Each of the Corporations shall, as soon as may be after the end of each financial year prepare and submit to the Central Government in such form as may be prescribed a report giving an account of its activities during the previous financial year, and the report shall also give an account of the activities, if any, which are likely to be undertaken by the Corporation during the next financial year.
(2) The Central Government shall cause every such report to be laid before both Houses of Parliament as soon as may be after it is submitted.
It shall be the duty of each of the Corporations to enter into consultations with the other in matters of common interest to the two Corporations including, in particular, the operation of scheduled air transport services, the routes on which such services should be operated by each of the Corporations, the frequency of such services, the passenger fares and freight rates to be charged, the measures of economy to be adopted, the provision of any services in regard to over-haul and maintenance of aircraft or any other matter falling within the scope of the functions of either of the Corporations, and, generally, in regard to ensuring the fullest co-operation and co-ordination in respect of all such matters.
The Central Government may, for the purpose of improving the air transport services provided by either of the Corporations or for effecting better co-ordination in respect of such services, direct that with effect from such date as may be specified in the direction and subject to such conditions as may be similarly specified,—
(a) any scheduled air transport service operated by one Corporation shall no longer be operated by that Corporation but shall be operated by the other Corporation, and
(b) any property belonging to one Corporation shall be transferred to the other Corporation.
(1) Each of the Corporations may appoint a Committee or Committees consisting of some or any of its 1[directors] with or without the addition of any officer or employee of the Corporation and delegate any of the functions and powers of the Corporation to such Committee or Committees and may limit the exercise of such delegated authority to any specified area.
(2) Either of the Corporations may, in relation to any particular matter or class of matters or to any particular area, by general or special order, direct that any of its officers or other employees may also exercise all or any of its powers under this Act (except the powers given to it by this section) to the extent to which the Corporation deems it necessary for the efficient running of its day-to-day administration.
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1[***] Each of the Corporations shall constitute in the prescribed manner a Labour Relations Committee consisting of representatives of the Corporations and of its employees, so however, that the number of representatives of the employees on the Committee shall not be less than the number of representatives of the Corporation, and it shall be the duty of the Labour Relations Committee to advise the Corporation on matters which relate to the welfare of the employees or which are likely to promote and secure amity and good relations between the two.
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1. Omitted by Act 49 of 1971, sec. 10 (w.e.f. 1-2-1972).
(1) Meetings of the Corporation shall be held at such times and places and, subject to sub-sections (2) and (3), the proceedings of the Corporation shall be conducted in such manner as may be provided by the regulations.
(2) The Chairman or in his absence any person chosen by the 1[directors] present from amongst themselves shall preside at the meeting.
(3) At a meeting of the Corporation all questions shall be decided by a majority of votes of the 1[directors] present, and for this purpose, each 1[director] shall have one vote and in the case of equality of votes the Chairman or, in his absence, the person presiding at the meeting shall have a second or casting vote.
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1. Subs. by Act 49 of 197
If a director, managing agent, manager or other officer or employee of an existing air company who wilfully withholds or fails to deliver to the Corporation as required by sub-section (2) of section 21 any books, documents or papers which may be in his possession or who wrongfully obtains possession of any property of any such company which has vested in either of the Corporations under this Act or having any such property in his possession wrongfully withholds it from the Corporation or wilfully applies it to purposes other than those expressed in, or authorised by, this Act shall, on the complaint of the Corporation concerned, be punishable with fine which may extend to one thousand rupees, and may be ordered by the Court trying the offence to deliver up or refund within a time to be fixed by the Court any such property improperly obtained or wrongfully withheld or wilfully misapplied or in default to suffer imprisonment wh
(1) The Central Government may, by notification in the Official Gazette, make rules to give effect to the provisions of this Act.
(2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely:—
(a) the terms and conditions of service of the 1[managing directors] of the two Corporations; and such other categories of officers as may be specified from time to time under sub-section (1) of section 8;
(b) the form in which the budget of the two Corporations shall be prepared and submitted to the Central Government; and the form and the manner in which the accounts of the two Corporations shall be maintained and in which any returns or statistics shall be furnished or submitted;
(1) 1[Subject to the provisions of sub-section (3), each of the Corporations may], by notification in the Official Gazette, make regulations not inconsistent with this Act or the rules made thereunder for the administration of the affairs of the Corporation and for carrying out its functions.
(2) In particular and without prejudice to the generality of the foregoing power, any such regulations may provide for all or any of the following matters, namely:—
(a) the time and place of the meeting of the Corporation and the procedure to be followed for the transaction of business at such meetings;
(b) the terms and conditions of service of officers and other employees of the Corporation other than the 2[managing director] and officers of any other categories referred to in section 44
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