AIR
CORPORATIONS (TRANSFER OF UNDERTAKINGS AND REPEAL) ACT, 1994 AIR CORPORATIONS (TRANSFER OF UNDERTAKINGS AND
REPEAL) ACT, 1994 [Act, No.13 of 1994] [21st March, 1994] An Act to provide for the transfer and vesting of the undertakings of
Indian Airlines and Air India respectively to and in the companies formed and
registered as Indian Airlines Limited and Air India Limited and for matters
connected therewith or incidental thereto and also to repeal the Air
Corporations Act, 1953. Be it
enacted by Parliament in the Forty-fifth Year of the Republic of India as
follows: - (1)
This Act may
be called the Air Corporations (Transfer of Undertakings and Repeal) Act, 1994. (2)
It shall be
deemed to have come into force on the 29th day of January, 1994. In this Act,
unless the context otherwise requires, (a)
"appointed
day" means such date as the Central Government may, by notification in the
Official Gazette, appoint under 3; (b)
"company"
means "Indian Airlines Limited" or "Air India Limited"
formed and registered under the Companies Act, 1956 (1 of 1956); (c)
"corporations"
means "Indian Airlines" and "Air India" established
under 3 of the Air Corporations Act, 1953 (27 of 1953) and
"corporation" means either of the corporations. On such date
as the Central Government may, by notification in the Official Gazette,
appoint, there shall be transferred to, and vest in, (a)
Indian
Airlines Limited, the undertaking of Indian Airlines; and (b)
Air India
Limited, the undertaking of Air India. (1)
The
undertaking of a corporation which is transferred to, and which vests in, a
company under 3 shall be deemed to include all assets, rights, powers,
authorities and privileges and all properties, movable and immovable, real or
personal, corporeal or incorporeal, in possession or reservation, present or
contingent, of whatever nature and wheresoever situate, including lands, works,
workshops, aircraft, cash balances, capital reserves, reserve funds,
investments, tenancies, leases and book debts and all other rights and
interests arising out of such property as were immediately before the appointed
day in the ownership, possession or power of that corporation in relation to
its undertaking, whether within or outside India, all books of account and
documents relating thereto and shall also be deemed to include all borrowings,
liabilities and obligations of whatever kind then subsisting of that
corporation in relation to its undertaking. (2)
All
contracts and working arrangements subsisting immediately before the appointed
day and affecting a corporation shall, in so far as they relate to the
undertaking of that corporation, cease to have effect or to be enforceable
against that corporation and shall be of as full force and effect against or in
favour of the company in which the undertaking has vested by virtue of this Act
and enforceable as fully and effectually as if, instead of the corporation, the
company had been named therein or had been a party thereto. (3)
Any
proceeding or cause of action pending or existing immediately before the
appointed day by or against a corporation in relation to its undertaking may,
as from that day, be continued and enforced by or against the company in which
it has vested by virtue of this Act, as it might have been enforced by or
against that corporation if this Act had not been passed, and shall cease to be
enforceable by or against that corporation. With effect
from the appointed day, all licences, permits, quotas and exemptions granted to
a corporation in connection with the affairs and business of that corporation
under any law for the time being in force, shall be deemed to have been granted
to the company in which the undertaking of that corporation has vested. (1)
Where any
exemption from, or any assessment with respect to, any tax has been granted or
made or any benefit by way of set off or carry forward, as the case may be, of
any unabsorbed depreciation or investment allowance or other allowance or loss
has been extended or is available to a corporation under the Income Tax Act,
1961 (43 of 1961), such exemption, assessment or benefit shall continue to have
effect in relation to the company in which the undertaking of that corporation
has vested. (2)
Where any
payment made by a corporation is exempt from deduction of the tax at source
under any provision of the Income Tax Act, 1961 (43 of 1961), the exemption
from tax will continue to be available as if the provisions of the said Act
made applicable to the corporation were operative in relation to the company in
which the undertaking of that corporation has been vested. (3)
The transfer
and vesting of the undertaking or any part thereof in terms of 3 shall
not be construed as a transfer within the meaning of the Income Tax Act, 1961
(43 of 1961) for the purposes of capital gains. Any
guarantee given for or in favour of a corporation with respect to any loan or
lease finance shall continue to be operative in relation to the company in
which the undertaking of that corporation has vested by virtue of this Act. (1)
Every
officer or other employee of a corporation (except a Director of the Board, Chairman,
Managing Director or any other person entitled to manage the whole or a
substantial part of the business and affairs of the corporation) serving in its
employment immediately before the appointed day shall, in so far as such
officer or other employee is employed in connection with the undertaking which
has vested in a company by virtue of this Act, become, as from the appointed
day, an officer or other employee, as the case may be, of the company in which
the undertaking has vested and shall hold his office or service therein by the
same tenure, at the same remuneration, upon the same terms and conditions, with
the same obligations and with the same rights and privileges as to leave,
passage, insurance, superannuation scheme, provident fund, other funds,
retirement, pension, gratuity and other benefits as he would have held under
that corporation if its undertaking had not vested in the company and shall
continue to do so as an officer or other employee, as the case may be, of the
company or until the expiry of a period of six months from the appointed day if
such officer or other employee opts not to be the officer or other employee of
the company, within such period. (2)
Where an
officer or other employee of a corporation opts under sub- (1) not to be in the
employment or service of the company in which the undertaking of that
corporation has vested, such officer or other employee shall be deemed to have
resigned. (3)
Notwithstanding
anything contained in the Industrial Disputes Act, 1947 (14 of 1947)-or in any
other law for the time being in force, the transfer of the services of any
officer or other employee of a corporation to a company shall not entitle such
officer or other employee to any compensation under this Act or under any other
law for the time being in force and no such claim shall be entertained by any
court, tribunal or other authority. (4)
The officers
and other employees who have retired before the appointed day from the service
of a corporation and are entitled to any benefits, rights or privileges shall
be entitled to receive the same benefits, rights or privileges from the company
in which the undertaking of that corporation has vested. (5)
The trusts
of the Provident Fund or Pilots Group Insurance and Superannuation Scheme of
the corporation and any other bodies created for the welfare of officers or
employees would continue to discharge their functions in the company as was
being done hitherto in the corporation. Tax exemption granted to Provident Fund
or Pilots Group Insurance and Superannuation Scheme would continue to be
applied to the company. (6)
Notwithstanding
anything contained in this Act or in the Companies Act, 1956 (1 of 1956) or in
any other law for the time being in force or in the regulations of a
corporation, no Director of the Board, Chairman, Managing Director or any other
person entitled to manage the whole or a substantial part of the business and
affairs of that corporation shall be entitled to any compensation against that
corporation or against the company, as the case may be, for the loss of office
or for the premature termination of any contract of management entered into by
him with that corporation. The Central
Government may give to a company directions as to the exercise and performance
by that company of its functions, and that company shall be bound to give
effect to any such directions. (1)
If any
difficulty arises in giving effect to the provisions of this Act, the Central
Government may, by order published in the Official Gazette, not inconsistent
with the provisions of this Act, remove the difficulty: Provided
that no such order shall be made after the expiry of a period of two years from
the coming into force of this Act. (2)
Every order
made under sub- (1) shall be laid before each House of Parliament. (1)
On the
appointed day, the Air Corporations Act, 1953 shall stand repealed. (2)
The corporations
shall, with the repeal of the Air Corporations Act, 1953, cease to exit. (1)
The Air
Corporations (Transfer of Undertakings and Repeal) Ordinance, 1994 (Ordinance 4
of 1994) is hereby repealed. (2)
Notwithstanding
such repeal of the Air Corporations (Transfer of Undertakings and Repeal)
Ordinance, 1994 (Ordinance 4 of 1994), anything done or any action taken under
the said Ordinance shall be deemed to have been done or taken under the
corresponding provisions of this Act. Statement of Objects and Reasons - AIR CORPORATIONS (TRANSFER OF
UNDERTAKINGS AND REPEAL) ACT, 1994 STATEMENT OF OBJECTS AND REASONS 1.
In the fast
developing international air-transport industry, mobilization of progressively
larger funds becomes necessary for all airlines. To meet their growth
requirements, Indian Airlines and Air India, both Constituted under the Air
Corporations Act, 1953 need to tap the capital market for equity funds rather
than depend solely on budgetary support from the Government as envisaged
"tinder the Act. As a part of the liberasation set in motion under the
'new economic policy, private sector investment has also been Permitted in the
air transport sector. It has therefore, been found necessary to repeal this
Act; 2.
The salient
features of the Bill are:- (a)
Repeal of
the Air Corporations Act, 1953 (27 of 1953) (b)
Undertakings
of Corporations to vest in two proposed companies, namely, Air India Limited
and Indian Airlines Limited. This would involve transfer of assets and
liabilities of the two corporations to the two proposed companies; (c)
All
licences, permits, quotas and exemptions to be deemed to have been granted to
the proposed companies; (d)
The tax
exemptions or benefits available to the corporations to continue, to have
effect in relation. to the proposed companies; (e)
Guarantees
given for or in favour of the Corporation to any loan or Lease finance to continue
to be operative; (f)
Every
officer or other employee of the Corporations would become, as from the
appointed date, an officer or other employee as the case may be, in which the
undertakings, have vested, with the Same terms and conditions of service, etc..with
option to resign; (g)
Power of
Central Government to give directions to the companies. 3.
seeks to
achieve the above objects.
Preamble 1 - AIR CORPORATIONS (TRANSFER OF
UNDERTAKINGS AND REPEAL) ACT, 1994PREAMBLE