Air Corporations Act of 1953

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CHAPTER I
THE AIR CORPORATIONS ACT, 1953
(27 OF 1953)
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THE AIR CORPORATIONS ACT, 1953 CHAP. I
CHAPTER I
TABLE OF CONTENTS
CHAPTER I
PRELIMINARY
SECTIONS PAGES
1. Short title and commencement. . . . . . . . 4
2. Definitions . . . . . . . . . . 4
CHAPTER II
CONSTITUTION AND AND FUNCTIONS OF THE CORPORATIONS
3. Incorporation of the Corporations . . . . . . . 5
4. Constitution of the Corporations . . . . . . . 5
5. Conditions of Service of Directors . . . . . . . 6
6. Vacancy in Corporation not to invalidate proceedings . . . . 6
7. Functions of the Corporations . . . . . . . . 6
8. Appointment of officers and other employees of the Corporations . . 8
9. Corporations to act on Business Principles . . . . . . 8
CHAPTER III
FINANCE, ACCOUNTS AND AUDIT
10. Capital of the Corporations . . . . . . . . 8
11. Vesting of Properties in the Corporations . . . . . . 9
12. Funds of the Corporations . . . . . . . . 9
13. Powers of the Corporations in regard to expenditure . . . . 9
14. Corporations to assume obligations of Central Government
in respect of certain matters . . . . . . . . 9
15. Accounts and Audit . . . . . . . . . 9
15A. Audit of Accounts of Companies formed by Corporations . . . 10
CHAPTER IV
ACQUISITION OF UNDERTAKINGS OF EXISTING AIR COMPANIES
16. Undertakings of existing Air Companies to vest in the Corporations . . 10
17. General effect of vesting of undertakings in the Corporations . . . 10
18. Reservation of Scheduled Air Transport Services to the Corporations . . 11
19. Licences to cease to be valid . . . . . . . . 12
20. Provisions respecting Officers and Employees of existing Air Companies . 12
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CHAP. I THE AIR CORPORATIONS ACT, 1953
SECTIONS PAGES
21. Duty to deliver up possession of property acquired and
documents relating thereto . . . . . . . . 13
22. Duty of existing Air Companies to supply particulars . . . . 13
23. Right of Corporations to disclaim certain agreements . . . . 14
24. Transactions resulting in dissipation of assets . . . . . 14
25. Compensation to be given for compulsory acquisition of undertaking . . 15
26. Constitution of Special Tribunal to determine Compensation . . . 15
27. Mode of giving compensation . . . . . . . . 16
28. Winding up of existing company whose undertaking has been acquired . . 16
29. Authorisation under section 28 may contain certain directions . . . 17
CHAPTER V
AIR TRANSPORT COUNCIL
30. Constitution of Air Transport Council . . . . . . 17
31. Functions of the Air Transport Council . . . . . . 17
32. Staff of the Council . . . . . . . . . 18
33. Proceedings of the Council . . . . . . . . 18
CHAPTER VI
CONTROL OF CENTRAL GOVERNMENT
34. Power of Central Government to give directions . . . . . . 18
35. Prior approval of Central Government necessary in certain cases . . . . 19
36. Submission of Programme of Work for each year . . . . . 19
37. Submission of Annual Reports to Parliament . . . . . . 19
CHAPTER VII
MISCELLANEOUS
38. Corporations to act in mutual consultation . . . . . . . 20
39. Transfer of scheduled air transport services or assets from one Corporation to the other . 20
40. Corporations may delegate their powers . . . . . . . 20
41. Advisory and Labour Relations Committees . . . . . . 20
42. Meetings of the Corporations . . . . . . . . 20
43. Penalty for wrongful withholding of property . . . . . . 21
44. Power to make rules . . . . . . . . . 21
45. Power of Corporations to make regulations . . . . . . . 22
THE SCHEDULE . . . . . . . . . . 23
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CHAPTER I

(27 OF 1953)
An Act to provide for the establishment of 1963).- Goa is now a State - See Goa, Daman
Air Corporations, to facilitate the acquisition and Diu Reorganisation Act (18 of 1987),
by the Air Corporations of undertakings S.3(30-5-1987).
belonging to certain existing Air companies
2. Definitions.— In this Act, unless the
and generally to make further and better
context otherwise requires -
provisions for the operations of air transport
services. (i) “aircraft” means any machine which can
derive support in the atmosphere from
Be it enacted by Parliament as follows:-
reactions of the air and includes balloons,
(a) For the Statement of Object and Reasons, whether fixed or free, airships, kites,
see Gazette of India, 21-3-1953, Pt. II, S.2 gliders and flying machines;
Extra, page 148
(ii) “air transport service” means a service
CHAPTER I for the transport by air of persons, mails
or any other thing, animate or inanimate,
PRELIMINARY
for any kind of remuneration whatsoever,
1. Short title and commencement.- (1) whether such service consists of a single
The Act may be called The Air Corporations flight or a series of flights;
Act, 1953.
(iii) “associate” in relation to either of the
(2) It shall come into force on such date as corporations means any subsidiary of
the Central Government may, by notificationa the corporation or any person with whom
in the Official Gazette, appoint. the corporation has made an agreement
(a) The Act came into force on 28-5-1953, see S.R.O.968A, in accordance with clause(h) of sub-
Gaz. of Ind., 28-5-1953, Pt.II, S.3 Extra p.1762. section (2) of section 7;
The Act has been extended to Union (iv) "Corporations" means "Indian Airlines"
Territories of Goa, Daman and Diu by the Goa, and "Air India International" establish-
Daman and Diu (Laws) Regulation, 1962 (12 of ed under section 3, and “Corporation”
1962), (w.e.f.1-2-1965), to Dadra and Nagar means either of the Corporations;
Haveli by the Dadra and Nagar Haveli (Laws)
(v) the expression “existing air companies”
Regulation, 1963 (6 of 1963), (w.e.f. 1-7-1965);
means the Air India Ltd., the Air Services
and to Pondicherry by the Pondicherry (Laws)
of India Ltd., the Airways (India) Ltd.,
Regulation, 1963(7 of 1963), (w.e.f. 1-10-
the Bharat Airways Ltd., the Deccan
Airways Ltd., the Himalayan Aviation
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Ltd., the Indian National Airways Ltd., as per S.7(I) of the Air Corporations (Amendment)
Act, 1962 (17 of 1962), S.7(2) of the Amendment Act
the Kalinga Airlines and the Air India
(17 of 1962) provides as under :-
International Ltd. and “existing air
company” means any of the existing air “(2) The change of name of “Air India
companies; International” by sub-section (1)
shall not affect any rights and
(vi) “prescribe” means prescribed by rules obligations of that Corporation or
made under this Act; render defective any legal
(vii) “regulations” means regulations made proceeding by or against it, and any
by either of the Corporations under legal proceedings which might have
section 45; been continued or commenced by
or against that Corporation by its
(viii) “Scheduled air transport service” means
former name may be continued or
an air transport service under-taken
commenced by or against it, by its
between the same two or more places
new name.”
and operated according to a published
time table or with flights so regular or 4. Constitution of the Corporation.—
a[(1) The general superintendence, direction
frequent that they constitute a
recognisably systematic series, each and management of the affairs and business of
flight being open to use by members of each of the Corporations shall vest in a Board
public; of directors which may exercise all such powers
and do all such acts and things as may be
(ix) “Tribunal” means the Tribunal
exercised or done by the Corporation under
constituted under section 25.
this Act.
CHAPTER II
(1-A) The Board of directors shall consist
CONSTITUTION AND FUNCTIONS of a Chairman to be appointed by the Central
OF THE CORPORATIONS Government, and not less than eight and not
more than fourteen other directors to be
3. Incorporation of the Corporations—
appointed by the Central Government and the
(1) With effect from such date as the Central
Chairman or any other director may be required
Government may, by notificationa in the Official
to render whole time or part-time service as the
Gazette, appoint, there shall be established two
Central Government may direct.
Corporations to be known as “Indian Airlines”
and “Air India International”b. Provided that —
(2) Each of the Corporations aforesaid shall (a) that same person may be appointed to be
be a body corporate having perpetual succession the Chairman of both the Corporations
and a common seal with power, subject to the or Chairman of one and director of the
provisions of this Act, to acquire and hold other;
property, and may by its name sue and be sued.
(b) the same persons may be appointed to be
(a) The date appointed is 15-6-1953: see S.R.O. 1125- directors of both the Corporations.]
Gaz. of Ind. 12-6-1953,Pt. II.S.3, Ext, p.1935.
(2) Before appointing a person to be a
(b) Re-named as ‘Air India’ w.e.f. 8-6-1962, see S.O.
b[director]of either of the Corporations, the
1676, Gaz. of Ind., 23-5-1962, Pt. II, S.3(ii), p.2019,
Central Government shall satisfy itself that
person will have no such financial or other
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interest as is likely to affect prejudicially the (5), substitued, Ibid.

exercise or performance by him of his functions 5. Conditions of service of members.—
as a b[director] of the Corporation and the (1) The Chairman and other a[directors] of each
Central Government shall also, satisfy itself of the Corporations shall ordinarily be entitled
from time to time with respect to every to hold office for the period specified in the
b[director] of the Corporation that he has no
order of appointment, unless the appointment
such interest; and any person who is, or whom is terminated earlier by the Central Government.
the Central Government proposes to appoint
and who had consented to be a b[director] of the Provided that any a[director] may at any
Corporation shall, whenever required by the time by notice in writing addressed to the Central
Central Government so to do, furnish to it such Government resign his office.
information as the Central Government (2) Subject to the previous approval of the
considers necessary for the performance of its Central Government, each of the Corporations
duties under this sub-section. shall pay to every a[director] thereof in respect
(3) A b [director] of either of the of his office as such, b[such remuneration by
Corporations who is in anyway directly or way of salary, allowances,] fees or otherwise as
indirectly interested in a contract made or may be determined by the Corporation and to
proposed to be made by the Corporation, or in the Chairman in respect of his office as such,
any contract made or proposed to be made by an such remuneration, whether in addition to the
associate of the Corporation which is brought remuneration to which he may be entitled in
up for consideration by the Corporation, shall, respect of his office as a a[directors] or
as soon as possible after the relevant otherwise, as it may similarly determine.
circumstances have come to his knowledge (a) Word “members” in sub-section (1) and word
disclose the nature of his interest at a meeting “member” in the proviso to sub-section (1) and sub-
section (2), substituted by Air Corporations
of the Corporation; and the disclosure shall be
(Amendment) Act (49 of 1971),S.3(1-2-1972).
recorded in the minutes of the Corporation and
(b) Substituted for words “such remuneration by way of
the b[director] shall not take any part after the
allowances”, ibid,S.3(ii)(b) (1-2-1972).
disclosure in any deliberation or decision of
the Corporation with respect to that contract. 6. Vacancy in Corporation not to
invalidate proceedings.— No act or
(4) During the temporary absence of the
proceeding of either of the Corporations shall
Chairman of either of the Corporations, the
be deemed to be invalid by reason merely of any
Central Government may appoint another
vacancy in, or any defect in the Constitution of,
person, whether a b[director] of the Corporation
the Corporation.
or not, to act as the Chairman.
7. Functions of the Corporation.- (1)
(5) Save as otherwise provided in this section, Subject to the rules, if any, made by the Central
nothing contained in this Act shall be deemed to Government in this behalf, it shall be the
disqualify the b[managing director] of either of function of each of the Corporations to provide
the Corporations from being appointed to be a safe, efficient, adequate, economical and
b[director] thereof.
properly co-ordinated air transport services,
(a) Original sub-section (1) substituted by the Air whether internal or international or both, and
Corporations (Amendment) Act (49 of 1971), S.2 (1-2- the Corporations shall so exercise their powers
1972).
(b) Word “member” in sub-sections (2), (3), (4) and (5)

and the words “ General Manager” in sub-section
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as to secure that the air transport services are contractor in relation to an air transport
developed to the best advantage and, in particular, service operated by any other person;
so exercise those powers as to secure that the
(h) with the previous approval of the Central
services are provided at reasonable charges.
Government, to enter into agreements
(2) Without prejudice to the generality of with any person engaged in air
the powers conferred by sub-section (1), each transportation with a view to enabling
of the Corporations shall, in particular, have such person to provide air transport
power- services on behalf of or in association
with the Corporation;
(a) to operate any air transport service, or
any flight by aircraft for a commercial (i) with the previous approval of the Central
or other purpose, and to carry out all Government, to determine and levy fares
forms of aerial work; and freight rates and other charges for or
in respect of the carriage of passengers
(b) to provide for the instruction and training
and goods on air transport services
in matters connected with aircraft or
operated by it;
flight by aircraft of persons employed,
or desirous of being employed, either by a[[ii] to make such grants as it thinks fit as
the Corporation or by any other person; contribution or donation, in furtherance
of the interests of the Corporation, to
(c) with the previous approval of the Central
any fund established for a benevolent or
Government, to promote any
charitable purpose:
organisation outside India for the purpose
of engaging in any activity of a kind Provided that nothing in this clause
which the Corporation has power to carry shall be construed as empowering
on; the Corporation to make any such
grant to any political party or for
(d) to acquire, hold or dispose of any
any political purpose to any
property, whether movable or
individual or body;]
immovable, or any air transport
undertaking; (j) to take such steps as are calculated to
extend the air transport services provided
(e) to repair, overhaul, reconstruct,
by the Corporation, whether within or
assemble or recondition aircraft, vehicles
without India, including the development
or other machines and parts, accessories
of feeder services and the improvement
and instruments thereof or therefore and
of the types of aircraft used in air
also to manufacture such parts, accesso-
transport services;
ries and instruments, whether the aircraft,
vehicles or other machines are owned by (k) to take such steps as are calculated to
the Corporation or by any other person; promote the interests of the Corporation
or to improve the services the
(f) to enter into and perform all such
Corporation may provide, b[including
contracts as are calculated to further the
provision of catering, hotels, restaurants,
efficient performance of its duties and
rest rooms,] goods-shed, ware-houses
the exercise of its powers under this
and transport by land or water in
Act;
connection with any air transport service
(g) to perform any functions as agent or or any other amenity or facility;
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c[(kk) to form one or more companies under consultation with the Chairman in such rules
the Companies Act, 1956 to further the shall be subject to the approval of the Central
efficient performance of its duties and Government.
the exercise of its powers under this
(2) Subject to the provisions of section 20,
Act:
every person employed by each of the
Provided that the paid up share Corporations shall be subject to such conditions
capital of every company so formed of service and shall be entitled to such
shall be held exclusively by the remuneration and privileges as may be
Corporation;] determined by regulations made by the
Corporation by which he is employed.
(l) to take all such steps as may be necessary
or convenient for , or may be incidental (3) Neither the a[managing director] nor
to , the exercise of any power, or the such other employee of either of the
discharge of any function or duty Corporations as may be specified in this behalf
conferred or imposed on it by this Act. by the Central Government shall, during his
service in the Corporation, be employed in any
(3) Nothing contained in this section shall
capacity whatsoever or directly or indirectly
be construed as —
have any interest in any air transport undertaking
(a) authorising the disregard by the other than an undertaking of either of the
Corporation of any law for the time being Corporations, or in any other undertaking which
in force, or is interested in any contract with either of the
Corporations.
(b) authorising any person to institute any
proceeding in respect of a duty or liability (a) Substituted for the words ‘General Manager’ by the
Air Corporation (Amendment) Act (49 of 1971), S.5
to which either of Corporations or its
(1-2-1972).
employees would not otherwise be
subject. 9. Corporations to act on business
principles.— In carrying out any of duties
(a) Clause (ii) inserted by the Air Corporations
(Amendment) Act (49 of 1971), S.4(1-2-1972). vested in it by this Act, each of the Corporations
shall act so far as may be on business principles.
(b) Words “including provision of catering, rest rooms”
in cl.(k) substituted, ibid. CHAPTER III
(c) Clause (kk) inserted, ibid.
FINANCE, ACCOUNTS AND AUDIT
8. Appointment of officers and other
10. Capital of the Corporations.— (1) All
employees of the Corporation.— (1) For the
non - recurring expenditure incurred by the
purpose of enabling it efficiently to discharge
Central Government for, or in connection with,
its functions under this Act, each of the
each of the Corporations up to the date of
Corporations shall appoint a a[managing
establishment of that Corporation and declared
director] and, subject to such rules as may be
to be capital expenditure by that Government,
prescribed in this behalf, may also appoint such
shall be treated as capital provided by the Central
number of other officers and employees as it
Government to that Corporation.
may think necessary:
(2) The Central Government may provide any
Provided that the appointment of the a[
further capital that may be required by either of
managing director] and such other categories
Corporations for the carrying on the business of
of officers as may be specified after
the Corporation or for any purpose connected
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therewith on such terms and conditions as the shall have power, subject to the provisions of
Central Government may determine. this Act, to spend such sums as it thinks fit on
objects or for purposes authorised by this Act and
(3) Each of Corporations may, with the
such sum shall be treated as expenditure out of the
consent of the Central Government, or in
funds of that Corporation.
accordance with the terms of any general
authority given to it by the Central Government- 14. Corporations to assume obligations of
Central Government in respect of certain
(a) borrow money for all or any of the
matters.— (1) All obligations incurred, all
purposes of the Corporation, and
contracts entered into and all matters and things
(b) secure the payment of money borrowed engaged to be done by, with, or for the Central
by it or any interest thereon by the issue Government for any of the purposes of this Act
of bonds, debentures, debenture-stock before the establishment of either of the
or any mortgage or charge or other secur- Corporations shall be deemed to have been
ity on the undertaking of the Corporation incurred, entered into or engaged to be done by,
or any part of it or on any of its properties. with or for Indian Airlines or, as the case may be,
Air India International according as the obligations
11. Vesting of properties in the
contracts, matters and things relate to the purposes
Corporation.— All properties, assets and funds
of the former Corporation or the latter.
owned or acquired by the Central Government for
the purpose of Indian Airlines or, as the case may 15. Accounts and audit.— (1) The
be, Air India International before the establishment Corporations shall maintain proper accounts and
of those Corporations shall, on such establishment, other relevant records and prepare annual
vest in the Corporation concerned. statement of accounts including the profit and
loss account and the balance sheet in such form as
12. Funds of the Corporation.— (1) Each
may be prescribed by the Central Government in
of the Corporations shall have its own funds and
consultation with the Comptroller and Auditor
all receipts of the Corporations shall be carried
General of India.
thereto and all payments for the Corporations
shall be made therefrom. (2) The accounts of the Corporations shall be
audited annually be the Comptroller and Auditor
(2) Each of the Corporations may keep in
a[account] with any scheduled bank as defined General of India and any expenditure incurred by
him in connection with such audit shall be payable
in section 2 of the Reserve Bank of India, Act,
by the Corporations to the Comptroller and
1934 or in any other bank approved by the
Auditor General of India.
Central Government in this behalf a sum of
money not exceeding such amount as may be (3) The Comptroller and Auditor General of
prescribed, but any moneys in excess of the India and any person appointed by him in connection
said sum shall be deposited in the Reserve Bank with the audit of the accounts of the Corporations
of India or with the agents of the Reserve Bank shall have the same rights and privileges and
of India or invested in such manner as may be authority in connection with such audit as the
approved by the Central Government. Comptroller and Auditor-General has in
(a) Substituted for the words “current account” by the Air
connection with the audit of Government accounts
Corporations (Amendment) Act (49 of 1971), Section and in particular, shall have the right to demand the
6 (1-2-1972). production of books, accounts, connected
13. Powers of the Corporations in regard vouchers and other documents and papers and to
to expenditure.— Each of the Corporations inspect any of the officers of the corporations.
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(4) The accounts of the Corporations as the annual general meeting of the
certified by the Comptroller and Auditor General company at the same time and in the
of India or any other person appointed by him in same manner as the audit report.]
this behalf together with the audit report thereon (a) Inserted by the Air Corporation (Amendment) Act (49
shall be forwarded annually to the Central of 1971), S.7(1-2-1972).
Government and the Government shall cause the CHAPTER IV
same to be laid before both Houses of Parliament.
ACQUISITION OF
a[15A. Audit of accounts of companies UNDERTAKINGS OF EXISTING
formed by Corporations. — (1) AIR COMPANIES
Notwithstanding anything contained in the
16. Undertakings of existing air
Companies Act, 1956, the auditor of any
companies to vest in the Corporations.—
company formed by either of the Corporations
On such date as the Central Government may,
under clause (kk) of sub-section (2) of section
by notification a in the Official Gazette, appoint
7 shall be appointed or re-appointed by the
(hereinafter referred to as “the appointed date”),
Corporation concerned on the advice of the
there shall be transferred to and vest in -
Comptroller and Auditor General of India.
(a) Indian Airlines, the undertaking of all
(2) Save as otherwise provided in sub-
the existing air companies (other than
section (1), in addition to the provisions
Air India International Ltd.), and
contained in the Companies Act, 1956, relating
to the audit of the accounts of any company, the (b) Air India International, the undertaking
following provisions shall apply to the audit of of the Air India International Ltd.
the accounts of any company referred to in sub-
(a) The day appointed is 1-8-1953; see S.R.O. 1262 in
section (1), namely:— Gaz. Ind., 1953, Pt. II, S.3, page 931.
(i) the Comptroller and Auditor General of 17. General effect of vesting of
India shall have power to conduct a undertakings in the Corporations.— (1) The
supplementary or test audit of the undertaking of each of the existing air
company’s accounts by such person or companies which is transferred to and which
persons as he may authorise in this vests in either of the Corporations under Section
behalf: and for the purposes so authorised, 16 shall, subject to the provisions of section
on such matters by such person or persons 22, be deemed to include all assets, rights,
and in such form as the Comptroller and powers, authorities and privileges and all
Auditor General may, by general or property, movable and immovable, including
special order, direct; lands, works, workshops, aircraft, cash balances,
(ii) the author appointed or re-appointed reserve funds, investment and book debts and
under sub-section (1) shall submit a copy all other rights and interests arising out of such
of his audit report to the Comptroller property as were immediately before the
and Auditor General of India who shall appointed date in the ownership, possession or
have the right to comment upon, or power of the existing air company in relation to
supplement, the audit report in such the undertaking, whether within or without India,
manner as he may think fit; and all books of account and documents relating
(iii) any such comments upon, or supplement thereto, and subject to the provisions contained
to, the audit report shall be placed before in Section 22, shall also be deemed to include
11
all borrowings, liabilities and obligations of their associates to operate any scheduled air
whatever kind then subsisting of the existing air transport service from to, in or across India:
company in relation to the undertaking.
Provided that nothing in this section shall
(2) Any lands works, aircraft, assets or other restrict the right of any person,-
property vesting in the Corporation under sub-
(a) for the purpose of any air transport
section (1) shall by force of such vesting be
undertaking of which the principal place
freed and discharged from all trusts, obligations,
of business is in any country outside
mortgages, charges, liens and other
India, to operate an air transport service
encumbrances affecting it, and any attachment,
in accordance with the terms of any
injunction or any other order of a Court
agreement for the time being in force
restricting the use of such property in any manner
between the Government of India and
shall be deemed to have been withdrawn.
the Government of that country; or
(3) Subject to the other provisions contained
(b) to carry passengers for the sole purpose
in this Act all contracts and working
of instructing them in flying or on duties
arrangements which are subsisting immediately
of air-crews; or
before the appointed date and affecting any of
the existing air companies shall, in so far as (c) to carry passengers or goods for the
they relate to the undertaking of that company, sole purpose of providing an air
cease to have effect or be enforceable against ambulance service or a rescue or relief
that company or any person who was surety or service during any natural calamity; or
had guaranteed the performance thereof, and
(d) to carry passengers or goods for the
shall be of as full force and effect against or in
sole purpose of providing joy rides
favour of the Corporation in which the
consisting of flights operated from and
undertaking has vested by virtue of this Act and
to the same aerodrome or place without
enforceable as fully and effectually as if, instead
any intermediate landing or for the
of the company, the Corporation had been
purpose of aerial survey, fire fighting,
named therein or had been a party thereto.
crop-dusting, locust control or any other
(4) Subject to the other provisions contained aerial work of a similar nature; a[or
in this Act, any proceeding or cause of action
(e) to operate, with the previous permission
pending or existing immediately before the
of the Central Government for such
appointed date by or against any of the existing
period and subject to such terms and
air companies in relation to its undertaking may
conditions as that Government may
as from that date be continued and enforced by
determine, any scheduled air transport
or against the Corporation in which it has vested
service as aforesaid which is not provided
by virtue of this Act as it might have been
by either of the Corporations or their
enforced by or against that company if this Act
associates.]
had not been passed, and shall cease to be
enforceable by or against that company, its (2) Any person who operates a scheduled air
surety or guarantor. transport service in contravention of the
provisions of this section shall be liable in
18. Reservation of scheduled air trans-
respect of each offence to a fine which may
port services to the Corporations.— (1)
extend to one thousand rupees, or to
After the appointed date, it shall not be lawful
imprisonment which may extend to three
for any person other than the Corporations or
months, or to both.
12
Explanation.— The operation of each flight may be fixeda by the Central Government by
shall constitute a separate offence for the notification in the Official Gazette, intimated
purposes of this section. his intention of not becoming an officer or
(a) Inserted by the Air Corporations (Amendment) Act,
other employee of the Corporation.
1962 (17 of 1962), S.2 (30-3-1962).
(2) Notwithstanding anything contained in
19. Licences to cease to be valid.— With sub-section (1), the Central Government may
effect from the appointed date, all licences direct either of the Corporations in which the
granted under the Indian Aircraft Act, 1934 (22 undertaking of any existing air company has
of 1934) or under the rules made thereunder vested to take into its employment any officer
for the operation of scheduled air transport or other employee who was employed by the
services shall cease to be valid. existing air company prior to the first day of
July, 1952, and who has been discharged from
20. Provisions respecting officers and
service in the company on or after the said date
employees of existing air companies.— (1)
for reasons which, in the opinion of the Central
Every officer or other employee of an existing
Government appear to be inadequate for the
air company (except a director, managing agent,
purpose, and where the Central Government
manager or any other person entitled to manage
issues any such direction, the provisions of
the whole or a substantial part of the business
sub-section (1) shall apply to such officer or
and affairs of the company under a special
other employee as they apply to any officer or
agreement, employed by that company prior to
other employee referred to therein.
the first day of July, 1952, and still in its
employment immediately before the appointed (3) As from the appointed date the trustees
date shall, in so far as such officer or other of the provident funds and pension funds or
employee is employed in connection with the pension schemes of each of existing air
undertaking which has vested in either of the companies shall transfer to the Corporation
Corporations by virtue of this Act, become as concerned the balances lying to the credit of
from the appointed date an officer or other each of the employees whose services have
employee, as the case may be, of the Corporation been transferred to that Corporation by virtue
in which the undertaking has vested and shall of this Act and also all other balances of the
hold his office or service therein by the same funds or schemes as shall remain after satisfying
tenures, at the same remuneration and upon the all demands and liabilities, and thereupon the
same terms and conditions and with the same trustees shall be discharged of the trusts by
rights and privileges as to pension and gratuity virtue of this Act.
and other matters as he would have held the
(4) Notwithstanding anything contained in
same under the existing air company if its
this Act or in the Indian Companies Act, 1913
undertaking had not vested in the Corporation
or in any other law for the time being in force or
and shall continue to do so unless and until his
in any agreement entered into by an existing air
employment in the Corporation is terminated
company or in the articles of association of any
or until his remuneration, terms or conditions
such company, no director, managing agent,
are duly altered by the Corporation:
manager or any other person entitled to manage
Provided that nothing contained in this the whole or a substantial part of the business
section shall apply to any officer or other and affairs of the company shall be entitled to
employee who has, by notice in writing given to any compensation against any existing air
the Corporation concerned prior to such date as company or against either of the Corporations
13
for the loss of office or for the premature (3) Without prejudice to the other provisions
termination of any contract of management contained in the section, it shall be lawful for
entered into by him with any existing air company the Corporation and the Central Government to
and where any existing air company has, after take all necessary steps for securing possession
the first day of July, 1952 , and before the of all properties which have vested in the
commencement of this Act, paid to any such Corporation under section 16.
person as is referred to in this sub-section any
22. Duty of existing air companies to
sum by way of compensation to which the person
supply particulars — (1) Where the
receiving such compensation would not have
undertaking of an existing air company vests in
been entitled if this sub-section were in force
either of the Corporations under this Act, the
at the time of such payment, the existing air
existing air company shall within thirty days
company shall be entitled to claim refund of
from the appointed date of within such further
any sum so paid.
time as the Corporation concerned may allow
(a) 10th of July 1953 was fixed as the date prior to in any case, supply to the Corporation particulars
which the notice referred to in the Proviso might
of book debts and investments belonging to and
be given: see S.R.O. 1170 in Gaz. Ind., 1953,
Pt. II-S.3,p.882. all liabilities and obligations of the company
subsisting immediately before any appointed
21. Duty to deliver up possession of
date, and also of all agreements entered into by
property acquired and documents relating
the existing air company and in force on the
thereto.— (1) Where any property has vested
appointed date, including agreements, whether
in either of the Corporations under section 16,
express or implied, relating to leave, pension,
every person in whose possession or custody
gratuity and other terms of service of any officer
or under whose control the property may be,
or other employees of the existing air company,
shall deliver up the property to the Corporation
under which by virtue of this Act the
concerned forthwith.
Corporations have or will or may have liabilities
(2) Any person who on the appointed date except such agreements as the Corporation
has in his possession or under his control any may exclude either generally or in any particular
books, documents or papers relating to any case from the operation of this sub-section.
undertaking which has vested in either of the
(2) If any existing air company fails to supply
Corporations under this Act and which belong
to the Corporation concerned particulars of
to an existing air company or would have so
such book debts, liabilities and agreements
belonged if its undertaking had not so vested
within the time allowed to it for the purpose
shall be liable to account for the said books,
under sub-section (1), nothing contained in this
documents and papers to the Corporation in
Act shall have effect so as to transfer any such
which the undertaking has vested and shall deliver
book debts, liabilities and agreements to, or to
them up to the Corporation or to such person as
vest the same in, the Corporation.
the Corporation may direct:
(3) Either Corporation may be notice in
Provided that the Corporation shall produce
writing within a period of a[six months] after
for inspection by such companies or their
submission of the particulars referred to in
authorized representatives the books of account
sub-section (1) intimate to the existing air
and documents as relate to the affairs of the
company submitting the particulars that such of
company for any period prior to the appointed
the book debts and investments as are specified
date.
14
in the notice are not included in the properties consideration or for an inadequate
vesting in the Corporation whereupon the consideration;
compensation provided by section 25 of this
(b) sold or disposed of any of its properties
Act and the Schedule thereto shall be reduced
or right without consideration or for an
by the amount of such excluded book debts and
inadequate consideration;
investments but the right of such existing air
company to recover and retain such excluded (c) acquired any property or right for any
book debts shall remain unaffected by this Act. excessive consideration;
[a] Substituted for the words “ninety days” by the Air (d) entered into or varied any agreement so
Corporations (Amendment) Act, 1954 (10 of 1954), S.
as to require an excessive consideration
2 (w.r.e.f. 30-1-1954)
to be paid or given by the company;
23. Right of Corporations to disclaim
(e) entered into any other transaction of
certain agreements— (1) Where it appears to
such an onerous nature as to cause a loss
either of the Corporations that the making of
to or impose a liability on the company
any such agreements as is referred to in section
exceeding any benefit accruing to the
22 under which the Corporation has or will have
company; or
or may have liabilities was not reasonably
necessary for the purposes of the activities of (f) sold or otherwise transferred any aircraft,
the existing air company or has not been entered equipment, machinery or other property
into in good faith, the Corporation may, within of book value exceeding rupees ten
a[one year] from the appointed date, apply to the
thousand;
Tribunal for relief from such agreement, and
and the payment, sale, disposal, acquisition
the Tribunal, if satisfied after making such
agreement or variation there of, or other
inquiry into the matter as it thinks fit that the
transaction or transfer was not reasonably
agreement was not reasonably necessary for
necessary for the purposes of the company or
the purposes of the activities of the existing air
was made with an unreasonable lack of prudence
company or has not been entered into in good
on the part of the company regard being had in
faith, may make an order cancelling or varying
either case to the circumstances at the time.
the agreement on such terms as it may think fit
to impose and the agreement shall thereupon (2) Either of the Corporations may, in the
have effect accordingly. case of any such existing air company as is
referred to in sub-section (1) the undertaking
(2) All the parties to the agreement which is
of which was vested in the Corporation under
sought to be cancelled or varied under this
this Act, at any time within a[one year] from the
section shall be made parties to the proceeding.
appointed date, apply for relief to the Tribunal
[a] Substituted for the words” six months” by the Air in respect of any transaction to which in the
Corporations (Amendment) Act, 1954 (10 of 1954) S.
4 (w.r.e.f. 30-1-1954).
opinion of the Corporation this section applies,
and all parties to the transaction shall, unless
24. Transactions resulting in dissipation the Tribunal otherwise directs, be made parties
of assets— (1) This section shall apply where to the application.
any existing air company has, after the first day
of July, 1952 and before the appointed date,— (3) Where the Tribunal is satisfied that a
transaction in respect of which an application is
(a) made any payment to any person without
15
made is a transaction to which this section shall be determined by the Corporation and if
applies, then, unless the Tribunal is also satisfied the amount so determined is approved by the
that the transaction was a proper transaction Central Government, it shall be offered to the
made in the ordinary course of business regard existing air company in full satisfaction of the
being had to the circumstances at the time and compensation payable under this Act, and if the
was not in any way connected with any provision amount so offered is not acceptable to the
made by this Act or with any anticipation of the existing air company, it may within such time as
making of any such provision, the Tribunal shall may be prescribed for the purpose have the
make much order against any of the parties to matter referred to a Tribunal constituted for
the application as the Tribunal thinks just having this purpose by the Central Government for
regard to the extent to which those parties decision.
where respectively responsible for the
26. Constitution of special Tribunal to
transaction of benefited from it and all the
determine compensation.— (1) The Tribunal
circumstances of the case.
to be constituted under section 25 shall consist
(4) Where an application is made to the of three members appointed by the Central
Tribunal under this section in respect of any government, one of whom shall be a person who
transaction and the application is determined in is or has been a Judge of a High Court or has
favour of the Corporation the Tribunal shall been a Judge of the Supreme Court.
have exclusive jurisdiction to determine any
(2) The Tribunal may for the purpose of
claims outstanding in respect of the transaction.
deciding any matter under this Act choose one
[a] Substituted for the words “six months” by the Air or more persons possessing special knowledge
Corporations (Amendment) Act, 1954 (10 of 1954.) S.
of any matter relating to the case under inquiry
4 (w.r.e.f. 30-1-1954).
to assist it in determining any compensation
25. Compensation to be given compulsory which is to be given under this Act.
acquisition of undertaking— (1) Where the
undertaking of any of the existing air companies (3) The Tribunal shall have the powers of a
has vested in either of the Corporations under civil court while trying a suit under the Code of
this Act, compensation shall be given by the Civil Procedure, 1908 in respect of the
Corporation to that company in the manner following matters:
specified in section 27 and the amount of such (a) summoning and enforcing the attendance
compensation shall be determined in accordance of any person and examining him on
with the principles specified in the Schedule to oath;
this Act.
(b) requiring the discovery and production
(2) Not with standing that separate valuations of documents;
are calculated under the principles specified in
(c) receiving evidence on affidavits;
the Schedule in respect of the several matters
referred to therein, the amount of compensation (d) issuing commissions for the examination
to be given shall be deemed to be a single of witnesses or documents.
compensation to be given for the undertaking as
(4) The Tribunal shall by a majority of its
a whole.
number regulate its own procedure and decide
(3) The amount of the compensation to be any matter within its competence and may review
given in accordance with the aforesaid principles its decision in the event of there being a mistake
16
on the face of the record or correct any (4) If within the expiry of the said period of
arithmetical or clerical error therein but subject one hundred and eighty days, the holder of any
there to the decision of the Tribunal on any bond fails to require payment of its face value
matter within its jurisdiction shall be final and from the Corporation concerned, the bond shall
shall not be called in question in any court. cease to the redeemable at the option of the
holder:
27. Mode of giving compensation— (1)
When the amount of compensation to be given Provided that in any case the Corporation
under this Act to an existing air company has may by notice require the holder of the bond to
been determined under section 25, the accept its face value in cash at any time whether
Corporation shall give to the company one or before of after the expiry of the period of five
more bonds of the face value of the amount of years aforementioned.
compensation so determined less such portion
(5) The holder of the bond shall be entitled
there of as is payable in cash under this section.
to receive from the Corporation interest on the
(2) Out of the compensation to be given to bond at three-and-a-half per cent per annum at
each of the existing air companies under this such intervals as may be prescribed, with effect
Act, there shall be paid in cash— from the appointed date and until the bond is
(a) ten per cent. of the amount of duly redeemed.
compensation payable to each of such (6) Bonds issued under this section shall,
companies (Which percentage shall be for the purpose of redemption and of computing
uniformly applicable to all existing air interest, be deemed to have been issued on the
companies); or appointed date.
(b) the amount borrowed by any such [7] Any bond issued under the provisions of
company from any bank and outstanding this section shall be deemed to be a security in
on the 31st day of December, 1952 or which a trustee may invest trust monies within
on the appointed date, whichever amount the meaning of section 20 of the Indian Trusts
is less; or Act, 1882.
(c) an amount equal to the cash of any such
28. Winding up of existing company
company, including cash in deposit with
whose undertaking has been acquired— (1)
a bank, which has vested in the
The Central Government may, on the application
Corporation under this Act;
of any existing air company or on the application
whichever of the amount specified in clauses of a majority in number representing three-
(a), (b) and (c) is the greatest. fourths in value of its members holding ordinary
shares, by order in writing, authorise the existing
(3) The bonds aforesaid shall be issued by
air company the undertaking of which has vested
the Corporation with the previous approval of
in either of the Corporations to be wound up
the Central Government and shall be negotiable
voluntarily in accordance with the provisions
and shall be redeemed at their face value by the
of the Indian Companies Act, 1913 relating to
Corporation concerned on the demand of the
voluntary winding up:
holder within one hundred and eighty days after
the expiry of five years from the date of their Provided that—
issue and the redemption of the bonds and
(a) the winding up of the company shall
payment of all interest there on shall be
commence on the day on which the Central
guaranteed by the Central Government.
17
Government authorises the winding up the amount subscribed by each class of such
without the passing by the company of members or having regard to the circumstances
any special or other resolution for relating to the issue of the shares to the various
winding up; and classes of members, specify in the direction,
and any such direction shall have effect not with
(b) the directors of the existing company
standing anything contained in the Indian
shall not be under an obligation to make
Companies Act, 1913 or in the articles of
any such statutory declaration as is
association or resolution of the company or in
required by section 207 of the Indian
any agreement, and every such company shall
Companies Act, 1913 and
be bound to comply with any such direction.
(c) the winding up of the company shall be
CHAPTER V
continued by the directors of the existing
company in office at the time the Central AIR TRANSPORT COUNCIL
Government authorises its winding up
30. Constitution of Air Transport
and they shall be deemed to be joint
Council— a[(1) The Central Government may,
liquidators for the purpose of the said
from time to time, by notification in the Official
winding up with power to act by a majority
Gazette constitute] an Air Transport Council
of their number.
consisting of a Chairman and such other number
(2) For the purposes of winding up the affairs of members not exceeding eleven as the Central
of any existing air company or for any other government may appoint there to:
purpose necessary for enabling it to give effect
Provided that amongst the members to be so
to the provisions of this Act, the Central
appointed there shall at least be one person with
Government may, notwithstanding anything
experience in financial metters and one person
contained in this Act, permit the existing air
who is an employee of either of the Corporations
company to occupy, keep in its custody, or
with experience in labour matters.
utilise, as the case may be, for such period as it
b[(2) If at any time the Central Government
may allow any office, books, accounts and other
documents and the services of any officers or is of opinion that the continued existence of an
other employees, which have been transferred Air Transport Council is not necessary, it may,
to either of the Corporations under this Act, on by notification in the Official Gazette, declare
such terms and conditions as may be agreed that the Air Transport Council shall be dissolved
between the Corporation in which the undertaking with effect from such date as may be specified
has vested and the existing air company, or in the notification, and thereupon the Air
failing agreement, as may be determined by the Transport Council shall be deemed to be
Central Government. dissolved, accordingly.]
29. Authorisation under section 28 may [a] Section renumbered as sub-section (1) and in the sub-
section so renumbered the words “As soon as may be
contain certain directions— Any after the commencement of this Act, the Central
authorisation granted under section 28 may Government may cause to be constituted” substituted
include a direction requiring an existing air by the Air Corporations (Amendment) Act, 1962 (17 of
1962), S. 3 (30-3-1962).
company the voluntary winding up of which has
been authorised under that section to distribute [b] Inserted, ibid, S. 3 (30-3-1962).
its net assets among the various classes of 31. Functions of the Air Transport
members of the company in such proportion as Council. — (1) It shall be the duty of the Air
the Central Government may, having regard to Transport Council to consider—
18
(a) at the request of either of the 33. Proceedings of the Council— (1) The
Corporations any matter of the kind Council shall regulate its own procedure.
referred to in section 38; and
(2) No proceedings of the Council shall be
(a) any matter of importance which may be deemed to be invalid by reason merely of any
referred to it by the Director-General of Civil vacancy in, or any defect in the constitution of,
Aviation or the Director-General of Posts and the Council.
Telegraphs relating to matters of common
CHAPTER VI
interest, between either of the Corporations
and the Director-General of Posts and CONTROL OF CENTRAL
Telegraphs, including rates for the carriage of GOVERNMENT
postal articles by air, and to make 34. Power of Central Government to give
recommendations there on to the Central directions.— (1) The Central Government may
Government. give to either of the Corporations directions as
2. At the request of the Central to the exercise and performance by the
Government, the Air Transport Council shall Corporation of its functions, and the
investigate any matter relating to the fares, Corporation shall be bound to give effect to any
freight rates or other charges levied by either such directions.
Corporation in respect of any service or facility (2) The Central Government may, if it is of
provided by the Corporation and of the adequacy opinion that it is expedient in the national interest
or efficiency of such service or facility and so to do, after consultation with the Corporation
shall make recommendations there on to the concerned, direct either of the Corporations-
Central Government.
(a) to undertake any air transport service or
(3) The Council shall, if so required by the other activity which the Corporation has
Central Government, tender advice to that power to undertake;
Government in regard to financial and economic
analysis, accounting, costing and statistical (b) to discontinue or make any change in any
techniques and financial reporting relating to scheduled air transport service or other
air transport and, in particular, advise in regard activity which it is operating or carrying
to the matter specified in the proviso to sub- on;
section (2) of section 34. (c) not to undertake any activity which it
(4) The Central Government, after taking proposes to do:
any recommendation made by the Air Transport Provided that, if, at the direction of the
Council under this section into consideration, Central Government, the Corporation
may issue such directions in the matter as it establishes, alters or continues to maintain an
thinks fit and such directions shall be binding air transport service or other activity and
on the Corporation concerned. satisfies the Central Government that during
32. Staff of the Council— The council shall the relevant financial year the Corporation has
have a Secretary and such other employees as suffered an over-all loss in respect of the
the Central Government may appoint, and the operation of all its air transport services and of
expenditure on the staff and other charges of all its other activities and also that the service
the Council shall be borne by the Central or activity so established, altered or continued
Government. to be maintained in compliance with the
19
directions of the Central Government as estimate in respect thereof, including any

aforesaid has been operated at a loss in any proposed investment of capital and increase in
financial year, then the Central Government the strength of its total staff.
shall reimburse the Corporation to the extent
(2) If, during any financial year, either of the
of the loss relatable to the operation of that
Corporations engages or proposes to engage in
particular service or activity.
any air transport service or ancillary activity in
35. Prior approval of Central addition to those specified in the prgramme
Government necessary in certain cases.— previously submitted under sub-section (1) and
Neither Corporation shall, without the previous a substantial alteration of the financial estimates
approval of the Central Government- is likely to be involved thereby, the Corporation
shall submit to the Central Government for
(a) undertake any capital expenditure for
approval a supplementary programme of such
the purchase or acquisition of any
service activity and a supplementary estimate
immovable property or aircraft or any
of the expenditure and revenue to be incurred
other thing at a cost exceeding a[ such
and received by the Corporation in respect
amount as the Central Government may,
thereof during the remainder of that period:
from time to time, by order, fix in this
behalf.] Provided that, to meet any unexpected traffic
demand or other special situation either of the
(b) enter into a lease of any immovable
Corporation may undertake any additional
property for a period exceeding b[ ten
service or other ancillary activity not specified
years] or
in the programme submitted under sub-section
(c) in any manner dispose of any property, (1) or sub-section (2) and subsequently submit
right or privilege having an original or a report on the matter to the Central Government
book value exceeding a[ such amount as in the prescribed manner.
the Central Government may, from time (a) Substituted for the words ‘three months’ by the Air
to time, by order, fix in this behalf]. Corporations (Amendment) Act, 1962(17 of 1962),
S.4 (30-3-1962).
[a] Substituted for the words “rupees forty lakhs” in cl.(a)
and the words “rupees ten lakhs” in cl. (c) by the Air 37. Submission of Annual Report to
Corporations (Amendment) Act (24 of 1982), S.2)(i)
and (ii) (21-5-1982).
Parliament.— (1) Each of the Corporations
shall, as soon as may be after the end financial
[b] Substituted for the words “five years” by the Air
Corporations (Amendment) Act (49 of 1971), S.8(1-2-
year, prepare and submit to the Central
1972). Government, in such form as may be prescribed
a report giving an account of its activities during
36. Submission of programme of work
the previous financial year, and the report shall
for each year.- (1) Each of the corporations
also give an account of the activities, if any,
shall prepare and submit to the Central
which are likely to be undertaken by the
Government, not less than a[two months] before
Corporation during the next financial year.
the commencement of the financial year of the
Corporation a statement showing the programme (2) The Central Government shall cause
of operation and development of air transport every report to be laid before both Houses of
services to be operated by the Corporation and Parliament as soon as may be after it is
its associates during the forthcoming financial submitted.
year and its other activities as well as its financial
20
CHAPTER VII Corporation and delegate any of the functions

and powers of the Corporation to such
MISCELLANEOUS
Committee or Committees and may limit the
38. Corporations to act in mutual exercise of such delegated authority to any
consultation.— It shall be the duty of each of specified area.
the Corporations to enter into consultations
(2) Either of the Corporations may, in
with the other in matters of common interest to
relation to any particular matter or class of
the two Corporations including, in particular,
matters or to any particular area, by general or
the operation of scheduled air transport services,
special order, direct that any of its officers or
the routes on which such services should be
other employees may also exercise all or any of
operated by each of the Corporations, the
its powers under this Act (except the powers
frequency of such services, the passenger fares
given to it by this section) to the extent to which
and freight rates to be charged, the measures of
the Corporation deems it necessary for the
economy to be adopted, the provision of any
efficient running of its day to day administration.
services in regard to over-haul and maintenance
of aircraft or any other matter falling within the [a] Substituted for the word “member” by the Air
scope of the functions of either of the Corporations (Amendment) Act (49 of 1971), S. 9 (1-
2-1972).
Corporations, and, generally, in regard to
ensuring the fullest co-operation and co- 41. Advisory and Labour Relations
ordination in respect of all such matters. Committees— a[* * *] Each of the Corporations
shall constitute in the prescribed manner a
39. Transfer of scheduled air transport
Labour Relations Committee consisting of
services or assets from one Corporation to
representatives of the Corporation and of its
the other— The Central Government may, for
employees, so however, that the number of
the purpose of improving the air transport
representatives of the employees on the
services provided by either of the Corporations
Committee shall not be less than the number of
or for effecting better co-ordination in respect
representatives of the Corporation, and it shall
of such services, direct that with effect from
be the duty of Labour Relations Committee to
such date as may be specified in the direction
advise the Corporation on matters which relate
and subject to such conditions as may be similarly
to the welfare of the employees or which are
specified,—
likely to promote and secure amity and good
(a) any scheduled air transport service relations between the two.
operated by one Corporation shall no [a] Sub-section "(1)" and the brackets and figure "(2)"
longer be operated by that Corporation omitted by the Air Corporations (Amendment) Act (49
but shall be operated by the other of 1971), S. 10(1-2-1972)
Corporation, and 42. Meetings of the Corporation.— (1)
(b) any property belonging to one Meetings of the Corporation shall be held at
Corporation shall be transferred to the such times and places and, subject to sub-
other Corporation. sections (2) and (3), the proceedings of the
Corporation shall be conducted in such manner
40. Corporation may delegate their as may be provided by the regulations.
powers— (1) Each of the Corporations may
appoint a Committee or Committees consisting (2) The Chairman or in his absence any
of some or any of its a[directors] with or without person chosen by the a[directors] present from
the addition of any officer or employee of the amongst themselves shall preside at the meeting.
21
(3) At a meeting of the Corporation all Corporations; and such other categories
questions shall be decided by a majority votes of officers as may be specified from
of the a[directors] present, and for this purpose, time to time under sub-section (1) of
each a[director] shall have one vote and in the section 8;
case of equality of votes the Chairman or; in his
(b) the form in which the budget of the two
absence, the person presiding at the meeting
Corporations shall be prepared and
shall have a second or casting vote.
submitted to the Central Government;
[a] Substituted for the word “members” in Cls. (2) and and the form and the manner in which the
(3) and “members” in Cl. (3) by the Air Corporations
accounts of the two Corporations shall
(Amendment) Act 49 of 1971, S. ll (1-2-1972).
be maintained and in which any returns
43. Penalty for wrongful withholding of or statistics shall be furnished or
property— If a director, managing agent, submitted;
manager or other officer or employee of an
existing air company who wilfully withholds or (c) the reports which should be submitted
fails to deliver to the Corporation as required by the Corporations and the intervals
by sub-section (2) of section 21 any books, within which they should be so submitted;
documents or papers which may be in his (d) the maintenance of books of accounts;
possession or who wrongfully obtains
(e) the establishment and maintenance of a
possession of any property of any such company
fund by each of the Corporations for
which has vested in either of the Corporations
meeting any liability arising out of any
under this Act or having any such property in his
act or omission in respect of which the
possession wrongfully withholds it from the
Corporation may incur any liability to
Corporation or wilfully applies it to purposes
any third party;
other than those expressed in, or authorised by,
this Act shall on the complaint of the (f) the provision of b[* *] reserve and other
Corporation concerned, be punishable with fine funds;
which may extend to one thousand rupees and
(g) the prohibition of persons who are
may be ordered by the Court trying the offence
directly or indirectly interested in any
to deliver up or refund within a time to be fixed
subsisting contract with either of the
by the Court any such property improperly
Corporations from becoming or being
obtained or wrongfully withheld or wilfully
employees of the Corporation;
misapplied or in default to suffer imprisonment
which may extend to one year. (h) the powers which may be exercised by
either of the Corporations to facilitate
44. Power to make rules— The Central
the acquisition of any undertaking;
Government may, by notification in the official
Gazette, make rules to give effect to the (i) the issue of bonds by either of the
provisions of this Act. Corporations to meet any compensation
payable by it under this Act;
(2) In particular, and without prejudice to
the generality of the foregoing power, such (j) the training of the employees of either
rules may provide for all or any of the following of the Corporations or other persons
matters, namely:— and fees which may in its discretion be
charged therefor;
(a) the terms and conditions of service of
the a[managing directors] of the two
22
(k) the term of office and other conditions 45. Power of Corporations to make
of service of members of the Air regulations— (1) a[Subject to the provisions
Transport Council constituted under of sub-section (3), each of the Corporations
section 30; may] by notification in the Official Gazette,
make regulations not inconsistent with this Act
(l) the prohibition of any interference with
or the rules made thereunder for the
any air transport services or with any
administration of the affairs of the Corporation
property of the Corporation or of any
and for carrying out its functions.
interference with or obstruction of any
officer or employee of the Corporation (2) In particular and without prejudice to the
in the performance of his duty; generality of the foregoing power, any such
regulationsb may provide for all or any of the
(m) the punishment which shall not exceed
following matters, namely:—
imprisonment for three months or fine
of rupees one thousand but which may (a) the time and place of the meetings of the
consist of both such imprisonment and Corporation and the procedure to be
fine, in respect of any contravention of followed for the transaction of business
the provisions of any rules made under at such meetings;
this section.
(b) the terms and conditions of service of
c[(3) Every rule made under this section officers and other employees of the
shall be laid, as soon as may be after it is made, Corporation other than the c[managing
before each House of Parliament while it is in director] and officers of any other
session for a total period of thirty days which categories referred to in section 44;
may be comprised in one session or in d[two or
(c) the issue of passes by the Corporation to
more successive sessions, and if, before the
its officers and other employees either
expiry of the session immediately following
free of cost or at concessional rates for
the session or the successive sessions] both
travel on its air services and the
Houses agree in making any modification in the
conditions relating thereto;
rule or both Houses agree that the rule should
not made, the rule shall thereafter have effect (d) the authentication of orders and decisions
only in such modified form or be of no effect, of the Corporation and the instruments
as the case may be, so however that any such executed by, it;
modification or annulment shall be without d[(e) the grant of refund in respect of any
prejudice to the validity of anything previously
unused tickets and the issue of passes
done under that rule.]
free of cost or at concessional rates;]
[a] Substituted for the words “General Managers” by the
Air Corporations (Amendment) Act (49 of 1971), S. (f) the period after the expiry of which
12(1-2-1972). unclaimed goods may be disposed of
(b) Word “depreciation” omitted, Ibid. and the manner of their disposal;
[c] Substituted for the original by the Air Corporations (g) the conditions governing the carriage of
(Amendment) Act, 1962 (17 of 1962), S. 5 (30-3-1962). persons or goods on its services.
[d] Substituted for the words “two successive sessions, e[(3) No regulation under clause (b) of sub-
and if before the expiry of the session in which it is so
laid or the session immediately following” by the Air section (2) shall be made except with the previous
Corporation (Amendment) Act (24 of 1982), S.3 (21- approval of the Central Government.]
5-1982)
23

f[(4) Every regulation made under this accordance with the provisions of this Act, of
section shall be laid, as soon as may be after it the undertaking of such company in that
is made, before each House of Parliament, Corporation shall be the sum of the amount
while it is in session, for a total period of thirty computed in accordance with the provisions of
days which may be comprised in one session or paragraph II, less the sum of the amounts
in two or more successive sessions, and if, computed in accordance with the provisions of
before the expiry of the session immediately paragraph III.
following the session or the successive sessions Paragraph II. — The aggregate written
aforesaid, both Houses agree in making any down value of all airframes of aircraft in respect
modification in the regulation or both Houses of which there are certificates of airworthiness
agree that the regulation should not be made, in force or, which can be rendered fit for
the regulation shall thereafter have effect only certificates of airworthiness if the Corporation
in such modified form or be of no effect, as the concerned were to incur expenditure within
case may be; so, however, that any such the normal rates for rendering the airframes
modification or annulment shall be without airworthy, plus-
prejudice to the validity of anything previously
done under that regulation. A sum of Rs. 12,000 in respect of each
airframe of a Dakota aircraft and a sum Rs.
(a) Substituted by the Air Corporations (Amendment) Act
49 of 1971, S.13(1-2-1972).
24,000 in respect of each airframe of a Viking
aircraft in any case where the existing air
(b) For some such Regulations, see S. R. O. 2462 to 2464
in Gaz. Ind., Extra., 29-7-1954, Pt. II, Section 3, pages company had obtained a certificate of
1169 to 1171; for International Carriage of Cargo airworthiness in respect of it within ninety days
(other than Baggage and Mail) Regulations, 1973 and immediately proceeding the appointed date or
International Carriages (Passenger and Baggage)
Regulations, 1973, see Gaz. of India, 1973, Pt. II,
if a certificate of airworthiness had not actually
Section 4, pp. 1674-1675; (these Regulations supersede been obtained within that period but the existing
Indian Airlines (Conditions of Carriage) Regulations, air company had incurred expenditure within
1967).
that period for the purpose of rendering that
(c) Substituted for the words “ General Manager” by the airframe airworthy, the value, of the spare parts
Air Corporations (Amendment) Act (49 of 1971) Section
13(1-2-1972).
used for the purpose subject to a maximum of
Rs. 12,000 in case of each airframe of a Dakota
(d) Substituted for the original clause (e) by the Air
Corporations (Amendment) Act 1962 (17 of 1962). aircraft and Rs.24,000 in the case of each
S.6(30-3-1962). airframe of a Viking aircraft.
(e) Inserted by the Air Corporations (Amendment) Act NOTE.- In this Schedule, the expression “
(49 of 1971), S.13(1-2-1972).
airframe” includes also the equipment
(f) Inserted by the Air Corporations (Amendment) Act
of the aircraft, whether fixed or re-
(24 of 1982), S.4(21-5-1982).
movable;
THE SCHEDULE
(b) the aggregate written down value of all
(See section 25) such power plants, aeroengines, air screws,
PRINCIPLES FOR DETERMINING spare aeroengines and spare air screws (all of
COMPENSATION UNDER THIS ACT which are in this Schedule collectively referred
to as power plants) as are suitable for use in the
Paragraph I. - The compensation which airframes mentioned in sub-clause (a) and as
shall be given by Indian Airlines or Air India are of an approved standard or can be rendered
International, as the case may be, to any existing fit to be of an approved standard if the
air company in respect of the vesting, in Corporation concerned were to incur
24
expenditure within the normal rates for such (c) the cost or purchase of all serviceable
purposes, plus the following, namely:- general stores and all such other serviceable
(i) a sum of Rs. 6,000 in respect of each stores and spares parts (all of which are in this
engine of a Dakota aircraft and a sum of Rs. Schedule collectively referred to as stores and
12,000 in respect of each engine of a Viking spare parts) belonging to the existing air
aircraft in any case where the existing air company as are suitable for use in respect of
company had made it an approved engine within the aircraft or power plants referred to in sub-
a period of ninety days immediately proceeding clauses (a) and (b), reduced in each case by 20
the appointed date or if the engine had not been per cent, of such case of purchase:
made completely fit to be an approved engine Provided that the reduction shall be 10 per
within that period but the existing air company cent, in the case of stores and spare parts
had incurred expenditure within the said period pertaining to Constellation and Skymaster
for the purpose of making that engine an approved aircraft.
engine, then, the value of the spare parts used
NOTE- In this Schedule-
for that purpose subject to a maximum of Rs.
6,000 in the case of each engine of a Dakota (a) stores shall be deemed to be serviceable
aircraft and Rs. 12,000 in the case of each if they are such as to satisfy the requirements
engine of a Viking aircraft; and laid down in Section E of Schedule III to the
Indian Aircraft Rules, 1937;
(ii) a sum of Rs. 2,000 in respect of the air
screws and accessories of the power plant of a (b) without prejudice to the clause
Dakota aircraft and a sum of Rs. 4,000 in respect immediately proceeding stores (other than
of the air screws and accessories of the power general stores) and spare parts shall also be
plant of a Viking aircraft in any case where the deemed to be serviceable if by incurring
air screws and accessories had been rendered expenditure of an amount not exceeding half
completely fit for the approved standard within the costs of purchase of such stores and spare
a period of ninety days immediately preceding parts, they can be rendered suitable for use in
the appointed date or if the same had not been respect of the aircraft or power plants;
rendered completely fit for that standard within
(d) the aggregate actual cost to the existing
that period but the existing air company had
air company of all lands other than lease-holds;
incurred expenditure within that period for the
purpose of rendering the same fit for the (e) the total amount of the premiums paid by
approved standard, then the value of the spare the company in respect of all lease-holds
parts used for that purpose subject to a maximum reduced in the case of each such premium by an
of Rs. 2,000 in the case of air screws and amount which bears to such premium the same
accessories of a Dacota aircraft and Rs. 4,000 proportion as the expired term on the appointed
in the case of air screws and accessories of a date of the lease in respect of which such
Viking aircraft. premium shall have been paid bears to the total
term of the lease;
NOTE.- In this Schedule, the expression” ap-
proved standard” means such condi- (f) the scrap value of all such aircraft, power
tion of efficiency of the power plant plants, propellers and the accessories, spare
as satisfies the requirements laid down parts and stores, not falling within any of the
in Section E of Schedule III to the preceding sub-clauses and all properties as have
Indian Aircraft Rules, 1937; become obsolete on the appointed date, the
scrap value for the purposes of this Act being
25
one per cent of the book value of the relevant (m) the aggregate written down value of all
item of property; tangible assets other than those falling within
the preceding clauses;
(g) the price paid by the existing air company
for any trustee security held by it; (n) an aggregate amount not exceeding ten
thousand rupees as may be agreed upon between
(h) the value of any shares held by any
the Corporation and the existing air company
existing air company in any other existing air
concerned or, failing agreement, which may be
company the value being calculated on the
assessed by the Tribunal, in respect of all such
basis of the valuation of the air transport
assets, intangible or otherwise, as do not fall
undertaking of that other company in accordance
within any of the preceding sub-clauses and in
with the provisions of this Schedule;
respect of the loss of any future profits which
(i) the market value on the appointed date or the existing air company might have earned but
the purchase price, whichever is less, of any for the passing of this Act:
other investments held by any existing air
Provided that in assessing any amount under
company in any concern other than another
this clause regard shall be had to the following
existing air company which subject to the
circumstances, namely:-
provisions of Section 22, have vested in the
Corporation; (i) the profits, if any, earned by it annually
during the six years immediately
(j) the amount of cash held by any existing
proceeding the appointed date on which
air company on the appointed date whether in
income-tax has been paid,
deposit with a bank or otherwise;
(ii) the subsidies, if any, given to that
(k) the amount of debts other than bad debts
company by the Central Government
due to any existing air company, to the extent to
during such period, and
which they are reasonable considered to be
recoverable, less the amount of the debts, if (iii) the probability or otherwise of the
any, excluded from the transfer to the company earning future profits if it were
Corporation concerned under the provisions of allowed to continue its scheduled air
Section 22; transport services for the remaining
period of the licence held by it after
(l) the aggregate cost of all licence fees
having due regard to the fact that the
paid by the company under clause (c) of sub-
licence held by it did not confer any
rule (1) of Rule 154 of the Indian Aircraft,
monopoly upon it in respect of the routes
1937, in respect of the licences granted to it for
concerned and the fact that no subsidy
the operation of any scheduled air transport
would have been payable by the Central
services and held by it on the appointed date and
Government after the 31st day of
which but for the provisions of section 19
December, 1952.
would continue to remain valid plus a sum of
Rs. 100 for each such licence; provided that the Explanation A.— For the purpose of this
fees paid for each such licence shall be reduced Schedule, the written down value in respect of
by an amount which bears to such fees the same each class of assets means the actual cost to the
proportion as the period of the licence which existing air company of such assets respectively,
shall have expired on the appointed date bears less the total depreciation calculated at the
to the total period of the licence; rates and in manner following, namely:-
26
(i) in respect of each airframe, depreciation acquisition the aggregate amount of

shall be calculated at 15 percent per annum for depreciation calculated as aforesaid for
constellation and Skymaster aircraft and 18 the preceding two years;
percent per annum for other aircraft from the
and so on;
date on which the aircraft concerned was first
used in revenue operations by the company till (iii) in respect of all tangible assets falling
the 31st day of December, 1952, the rates within clause (m) of paragraph II,
being applied as follows :- depreciation shall be calculated at the
normal annual rates for which provision
for the first year, on the actual cost of
is made in the Indian Income-tax Act,
acquisition;
1922, and in the manner provided therein,
for the second year, on an amount but excluding initial or other special
obtained by reducing from the actual depreciation, from the date such assets
cost of acquisition the amount of were acquired or created by the existing
depreciation calculated as aforesaid for air company until the 31st day of
the first year; December, 1952:
for the third year, on an amount obtained Provided that in respect of any such asset
by reducing from the actual cost of for which no provision has been made in the
acquisition the aggregate amount of Indian Income-tax Act, 1922, the rate of
depreciation calculated as aforesaid for depreciation shall be 10 per cent, per annum:
the preceding two years ;
Provided further that in respect of any such
and so on; asset situate on the leasehold land other than
land rented from Government, the depreciation
(ii) in respect of power plants, the
shall be either -
depreciation shall be calculated at 20
per cent. per annum for Constellation (a) as provided in the proceeding provisions
and Skymaster aircraft and at 24 per of this clause, or
cent. per annum for other aircraft from
(b) equivalent to an amount which bears the
the date on which the power plant
same ratio to the total cost of acquisition
concerned was first used in revenue
or creation of the asset (situate on
operations by the company till the 31st
leasehold land) as the expired portion of
day of December, 1952, the rates being
the lease on the appointed date bears to
applied as follows:-
the total period of the lease currently
for the first year, on the actual cost of running,
acquisition;
whichever is greater.
for the second year, on an amount
Explanation B.— For the purpose of this
obtained by reducing from the actual
Schedule, the actual cost shall include, in the
cost of acquisition the amount of
case of airframes, in addition to the cost of
depreciation calculated as aforesaid for
purchase or acquisition-
the first year;
(i) the actual expenditure, if any, incurred
for the third year on an amount obtained by the existing air company for
by reducing from the actual cost of
27
reconversion or reconstruction of the power plant, in order to render its fit for the
airframe in order to render it fit for civil purposes of a certificate under paragraph 4 of
air transport before it was first used in section E of Schedule III to the Indian Aircraft
revenue operations by the company, plus, Rules, 1937, before the date of its first use in
revenue operations.
(ii) the actual expenditure incurred in making
the airframes airworthy before its first Paragraph III.— Subject to the provisions
use in revenue operations. of sections 22 and 23, all such liabilities as
have been declared by the existing air company
Explanation C.— In the case of power
under the provisions of section 22:
plants, the actual cost shall include, in addition
to the cost of purchase or acquisition, the cost Provided that if any liability so declared has
incurred by the company for conversion or been understated, the Corporation may recover
reconditioning, repairing or overhauling the the additional amount from the company.

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THE AIR CORPORATIONS ACT, 1953

THE AIR CORPORATIONS ACT, 1953 CHAP. I

THE AIR CORPORATIONS ACT, 1953

CHAP. I THE AIR CORPORATIONS ACT, 1953

THE AIR CORPORATIONS ACT, 1953 CHAP. I

THE AIR CORPORATIONS ACT, 1953

CHAP. I THE AIR CORPORATIONS ACT, 1953

THE AIR CORPORATIONS ACT, 1953 CHAP. I

interest as is likely to affect prejudicially the (5), substitued, Ibid.

(b) Word “member” in sub-sections (2), (3), (4) and (5)

CHAP. I THE AIR CORPORATIONS ACT, 1953

THE AIR CORPORATIONS ACT, 1953 CHAP. I

CHAP. I THE AIR CORPORATIONS ACT, 1953

THE AIR CORPORATIONS ACT, 1953 CHAP. I

CHAP. I THE AIR CORPORATIONS ACT, 1953

THE AIR CORPORATIONS ACT, 1953 CHAP. I

CHAP. I THE AIR CORPORATIONS ACT, 1953

THE AIR CORPORATIONS ACT, 1953 CHAP. I

CHAP. I THE AIR CORPORATIONS ACT, 1953

THE AIR CORPORATIONS ACT, 1953 CHAP. I

CHAP. I THE AIR CORPORATIONS ACT, 1953

THE AIR CORPORATIONS ACT, 1953 CHAP. I

CHAP. I THE AIR CORPORATIONS ACT, 1953

directions of the Central Government as estimate in respect thereof, including any

THE AIR CORPORATIONS ACT, 1953 CHAP. I

CHAPTER VII Corporation and delegate any of the functions

CHAP. I THE AIR CORPORATIONS ACT, 1953

THE AIR CORPORATIONS ACT, 1953 CHAP. I

CHAP. I THE AIR CORPORATIONS ACT, 1953

THE AIR CORPORATIONS ACT, 1953 CHAP. I

CHAP. I THE AIR CORPORATIONS ACT, 1953

THE AIR CORPORATIONS ACT, 1953 CHAP. I

(i) in respect of each airframe, depreciation acquisition the aggregate amount of

CHAP. I THE AIR CORPORATIONS ACT, 1953

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