Bandhs/Road/Rail Blockades Illegal And Unconstitutional; Organizers Must Be Prosecuted: Gauhati High Court

 It has to be said in all fairness that in a latest, landmark and extremely laudable judgment delivered by the Gauhati High Court on March 19, 2019 in Lower Assam Inter District Stage Carriage Bus Owners Association Goalpara, Assam, Rep. By Its General Secretary, Sri Aniruddha Das Vs The State Of Assam And 11 Ors. Rep. By The Chief Secretary To The Govt. Of Assam, Dispur in Case No. : WP(C) 7570/2013, it has very rightly held that bandhs/road/rail blockades are illegal and unconstitutional and organizers must be prosecuted. The Gauhati High Court has explicitly and elegantly held that road and rail blockades are variants of bandh, and thus illegal and unconstitutional. Justice Ujjal Bhuyan who authored this extremely laudable and praiseworthy judgment also observed that the organizer or organizers of such bandh or blockade, at least the principal office bearers of such organizer(s), would be liable to be prosecuted under various provisions of the Indian Penal Code, 1860, National Highways Act, 1956 and the Railways Act, 1989. Very rightly so!

                                        To start with, the ball is set rolling by Justice Ujjal Bhuyan of Gauhati High Court first and foremost in para 2 wherein it is pointed out that, “By filing this petition under Article 226 of the Constitution of India, petitioner seeks imposition of exemplary damages upon respondent Nos. 4 to 12 for having called and organized illegal and unconstitutional bandhs for a total of 51 days from 28.08.2012 to 31.08.2013 in the districts of Goalpara, Bongaigaon and Kamrup, or, alternatively, for a direction to the State of Assam for payment of such compensation. Further prayer made is for a direction to the State of Assam to set up a Bandh Loss Compensation Fund from which fund compensation can be paid to persons who suffer loss and injury to their person or property including the petitioner due to such illegal and unconstitutional bandhs. In addition, certain incidental reliefs have also been claimed.”

                              Be it noted, para 3 then reveals that, “Petitioner is the Lower Assam Inter-District Stage Carriage Bus Owners’ Association, Goalpara, represented by its Secretary. Petitioner is a society registered under the Societies Registration Act, 1860, vide certificate of registration dated 29.06.1991, having its registered office at Pancharatna Road, Goalpara.”

                                             Furthermore, para 4 then also reveals that, “It is stated that there are 51 members of the petitioner, who are bus owners having permits for plying their buses on all the routes including on national highways. The members have 26 numbers of big buses and 25 numbers of canters which they had purchased by obtaining loans from different banks and financial institutions. Only source of income of the members is earning from purchase of bus tickets by the passengers. From such earning, the members have not only to repay the loan amounts but have also to pay salary to the employees of the buses, i.e., driver, handman etc., besides earning for the members themselves.”

                                   To be sure, it is then underscored in para 5 that, “Therefore, plying of the buses is most essential for the livelihood of the members as well as for the dependant staff.” Absolutely right! There can be no denying or disputing it!

                                       Elaborating further, para 6 then brings out that, “Respondent Nos. 4 to 12 had called bandhs on various dates during the period from 28.08.2012 to 31.08.2013, totaling 51 days during which the members could not ply their buses. As per calculation of the petitioner, the loss was about Rs 2,000 for each canter and Rs 2,500 against each big bus per day of bandh. Thus, as per the calculation of the petitioner the collective loss was about Rs 56,16,365.00.”

                                   What’s more, it is then illustrated in para 7 that, “Contention of the petitioner is that calling of such bandh is illegal and unconstitutional in view of law laid down by Supreme Court which is binding on all authorities. State and its machinery had failed to prevent such illegal and unconstitutional bandhs. Therefore, State is bound to compensate the petitioner, besides, State has to prosecute the office bearers of the organizations which had called for such illegal and unconstitutional bandhs. It is with such grievance that the present writ petition has been filed seeking the reliefs as indicated above.”

                               While pooh-poohing the repeated calls for bandhs, para 13 then minces no words in making it absolutely clear that, “The phenomenon called bandhs has become an endemic problem in the State. As a matter of fact, such bandhs were called and enforced in different parts of the country causing severe inconvenience to the public besides loss of life and property. At one point of time, it appeared that there was decrease in the call for bandhs in the State, but again it has become a regular phenomena. Bandhs along with its variants such as, road-blockades and rail-blockades have paralysed the State on numerous occasions having a deleterious effect on the people, besides causing immense loss to the economy.”

                                       Truth be told, it is then stipulated in para 14 that, “In Bharat Kumar Vs State of Kerala : AIR 1977 Kerala 291, a Full Bench of the Kerala High Court was considering a bunch of petitions seeking a declaration that calling for and holding of what had come to be known as bandh was unconstitutional and was hence illegal. In that context, Full Bench of the Kerala High Court was examining the meaning of the expression bandh. According to this judgment, bandh is a Hindi word meaning “closed” or “locked”. The expression, therefore, conveys an idea that everything is to be blocked or closed. In Assamese, it is referred to as “bandha”; Assam bandha or Assam bandh or bandhs called locally, i.e., at the district level or town level or area wise have become so frequent so much so that Assam bandh has become a part of the local popular vocabulary. To this may be added different variants of bandhs like road-blockades and rail-blockades, which are nothing but bandhs, inasmuch as, it closes the roads including national highways and railway tracks thus blocking movement of vehicles and trains. In Bharat Kumar (supra), it was observed that when organizers of a bandh call for such bandh they clearly express their intention of bringing all activities to a stand-still on the day of the bandh. The intention of the callers of bandh is to ensure that no activity either public or private is carried out on that day. Though nobody openly threatens violence against those not observing the bandh but threats and intimidation is implicit in such call for bandh. After an elaborate examination of the issue from a constitutional perspective, Full Bench of Kerala High Court in Bharat Kumar (supra), declared that no political party or organization has the right to call for a bandh. They cannot prevent citizens not in sympathy with their view point from exercising their fundamental rights or from performing their duties for their own benefit or for the benefit of the State. It was held that those organizations and political parties calling for and holding bandhs trample upon the rights of the citizens of the country protected by the Constitution. While declaring or calling for bandh by any association, organization or political party and the enforcing of that call is illegal and unconstitutional, Kerala High Court held that such associations, organizations or political parties are liable to compensate the government, public and the private citizens for the loss suffered by them on account of such bandh. It was further held that the State cannot shirk its responsibility of taking steps to recoup the loss from the sponsors and organizers of such bandhs. Accordingly, direction was issued to the State and its officials to give effect to the said declaration.”

                                       While continuing in the same vein, it is then pointed out in para 15 that, “This judgment of the Full Bench of Kerala High Court was assailed by the Communist Party of India (Marxist) before the Supreme Court. In Communist Party of India (Marxist) Vs Bharat Kumar (1998) 1 SCC 201, Supreme Court while rejecting the challenge held that the Kerala High Court judgment did not call for any interference. It was held that there cannot be any doubt that the fundamental rights of the people as a whole cannot be subservient to the claim of fundamental right of an individual or only a section of the people. It was further held that the High Court had rightly concluded that there cannot be any right to call or enforce a bandh, which interferes with the exercise of the fundamental freedoms of other citizens, in addition to causing national loss in many ways. Supreme Court while observing that Kerala High Court had drawn a very appropriate distinction between a bandh on the one hand and call for general strike or hartal on the other hand, declared that it was in agreement with the view taken by the High Court.”

                                      Not stopping here, it is then pointed out in para 16 that, “In James Martin Vs State of Kerala : (2004) 2 SCC 203, appellant resisted a bandh call when his mill was attacked. Appellant fired at the bandh activists who were inside the mill compound trying to enforce the bandh following which two of the bandh activists died, whereafter, bandh supporters set afire the residential building and mill of the appellant. Appellant was investigated by the police and charge-sheeted. He was convicted in the trial court which was affirmed by the Kerala High Court. Supreme Court acknowledged exercise of the right of self defence of the appellant while allowing the appeal. In that context, Supreme Court noted that in the name of hartal or bandh or strike no person has any right to cause inconvenience to any other person or to cause in any manner a threat or apprehension of risk to life, liberty and property of any citizen or destruction of life and property of any government or public. Paragraph-24 of the aforesaid judgment is quoted hereunder:-

           “Before we part with the case it needs to be noted that in the name of hartal or bandh or strike no person has any right to cause inconvenience to any other person or to cause in any manner a threat or apprehension of risk to life, liberty and property of any citizen or destruction of life and property, and the least to any government or public property. It is high time that the authorities concerned take serious note of this requirement while dealing with those who destroy public property in the name of strike, hartal or bandh. Those who at times may have even genuine demands to maker should not lose sight of the overall situation eluding control and reaching unmanageable bounds endangering life, liberty and property of citizens and public, enabling anti-social forces to gain control resulting in all around destruction with counter productive results at the expense of public order and public peace. No person has any right to destroy another’s property in the guise of bandh or hartal or strike, irrespective of the proclaimed reasonableness of the cause or the question whether there is or was any legal sanction for the same. The case at hand is one which led to the destruction of property and loss of lives, because of irresponsible and illegal acts of some in the name of bandh or hartal or strike. Unless those who organize can be confident of enforcing effective control over any possible turn of events, they should think twice to hazard themselves into such risk-prone ventures endangering public peace and public order. The question whether bandh or hartal or strike has any legal sanctity is of little consequence in such matters. All the more so when the days are such where even law-enforcing authorities/those in power also precipitate to gain political advantage at the risk and cost of their opponents. Unless such acts are controlled with an iron hand, innocent citizens are bound to suffer and they shall be the victims of the high-handed acts of some fanatics with queer notions of democracy and freedom of speech or association. That provides for no license to take law into their own hands. Any soft or lenient approach for such offenders would be an affront to rule of law and challenge to public order and peace”.” Para 16.1 then states that, “Thus, Supreme Court observed that such illegal and unconstitutional acts should be controlled with an iron hand; any soft or lenient approach may compromise the rule of law, challenging public order and peace.”

                                       Interestingly enough, para 17 then points out that, “Bombay High Court in Writ Petition (PIL) No. 2827 of 2003 (G. Deshmukh Vs State of Maharashtra) examined a prayer made by a group of citizens of Mumbai seeking direction to two political parties to pay damages/compensation to them and other citizens of Mumbai through a bandh loss compensation fund for having called a bandh of Mumbai city on 30.07.2003. Bombay High Court referred to the decision of Kerala High Court in Bharat Kumar (supra) and also noted enforcement of the bandh by forcibly stopping road and rail traffic. It was held that the said two political parties had violated constitutionally guaranteed rights of the citizens of Mumbai under Articles 19 and 21 of the Constitution of India by calling and enforcing Mumbai bandh on 30.07.2003. It was further held that it was not open to the State and its authorities to avoid taking stern action against those involved in rasta-rokos (road-blockades) or rail-rokos (rail-blockades) and stoning of public and private vehicles in the guise of tactful handling of the situation thereby allowing organizations calling bandh to bring all activities to a stand-still. Bombay High Court further held that various acts of rail-rokos, rasta-rokos and stoning of public and private vehicles are undoubtedly punishable offences under various sections of the penal code but these statutory provisions are inadequate to repair the wrong done to the citizens. In the said case, Bombay High Court had directed the two political parties to deposit by way of exemplary damages a sum of Rs 20 lacs each with the State Government to be credited in a fund called “30th July, 2003 Bandh Loss Compensation Fund”. In addition, a series of declarations and directions were issued.”

                                      What’s more, it is then observed in para 18 that, “Taking a serious note of various instances where there was large scale destruction of public and private properties in the name of agitations, bandhs, hartals and the like, suo moto proceedings were initiated by the Supreme Court in (2009) 5 SCC 212; (In Re: Destruction of Public and Private Properties Vs State of AP). Supreme Court had appointed two committees – one headed by a retired judge of the Supreme Court, Justice KP Thomas and the other headed by Mr FS Nariman, a senior member of the legal profession to look into the issue and to suggest remedial measures. Supreme Court considered the reports and recommendations of both the committees. In so far the report and recommendations submitted by Justice KT Thomas Committee, Supreme Court declared that those were wholesome and the report and recommendations of the Nariman committee was also approved. In the absence of legislation, Supreme Court while declaring that the recommendations of the two committees had its approval, issued a series of guidelines with the direction that those guidelines would become operative immediately.”

                             Furthermore, it is then observed in para 18.1 that, “To assess damages caused due to bandhs or protests, Supreme Court directed that in the absence of legislation, the guidelines mentioned therein were required to be adopted which included initiating suo motu action by the High Court and setting up a machinery to investigate the damage caused and to award compensation; where more than one state is involved, such action may be taken up by the Supreme Court. It was further directed that in each case the High Court or the Supreme Court, as the case may be, appoint a sitting or retired High Court judge or a sitting or retired District judge as a Claims Commissioner to estimate the damages and investigate liability. Thus, from the above it is evident how seriously the matter has been viewed by the Supreme Court.” Also, it is then held in para 19 that, “This issue again cropped up before the Supreme Court in AIADMK Vs Chief Secretary, Government of Tamil Nadu, (2009) 5 SCC 452, wherein it was made clear that neither can anybody give a call for bandh nor can the same be enforced.”

                                     Moving on, para 19.1 then states that, “In Hispreachering Son Shylla Vs State of Meghalaya; (2010) 4 GLR 395, a Division Bench of this Court referred to the decision of the Supreme Court in the case of Communist Party of India (Marxist) (supra) and allowed the writ petitions by directing the respondents to strictly implement the law declared by the Supreme Court in Communist Party of India (Marxist) (supra) by taking all necessary steps for preventing infringement of the various fundamental rights of the citizens on account of calls for bandhs etc. given from time to time by various political or other organizations.”

                                   It would be pertinent to now mention that it is then enunciated in para 20 that, “A Full Bench of the Meghalaya High Court in Registrar General, High Court of Meghalaya Vs State of Meghalaya; 2015 (4) GLT (ML) 480, suo motu registered a writ petition considering the adverse impact of bandh called by an unlawful association on the community life including hospitals and courts in the State of Meghalaya. Full Bench of Meghalaya High Court summed up the legal position as under:-

1) calls for bandh are unconstitutional and illegal;

2) since calls for bandh infringe fundamental rights of the citizens under Articles 19 and 21 of the Constitution, the organizers and sponsors of such bandh shall be held liable under the law to recoup and make good the loss and damages;

3) even the State Government would be held responsible and can be asked to pay damages if it fails to stop bandh.

Thereafter, the Full Bench of the Meghalaya High Court issued a series of directions.”

                                         As a consequence, it is then held in para 21 that, “Thus from the above, it is evidently clear that bandh is illegal and unconstitutional. This is the law declared by the Supreme Court of India. Not only that, Supreme Court has declared that no organization has any right to call for and enforce bandh. If a person comes forward and claims to have suffered loss to life and property, the organizers of the bandh would be held responsible and they would be liable to pay compensation. If the State fails to prevent such bandh because of which a person suffers loss, the damages can be recouped from the State.”

                                As it turned out, it is then envisaged in para 22 that, “Under Article 141 of the Constitution of India, the law declared by the Supreme Court shall be binding on all courts within the territory of India. As per Article 144, all authorities, civil and judicial, in the territory of India shall act in aid of the Supreme Court. In the light of the above, a Division Bench of this Court in Hispreachering Son Shylla (supra) directed the State to strictly implement the law declared by the Supreme Court by taking all necessary steps.”

                                     While leaving no room for doubt, it is then made absolutely clear in para 23 that, “Therefore, it is the bounden duty of all authorities, be it civil or judicial, to ensure that the law declared by the Supreme Court is obeyed and enforced in letter and spirit. If there is any violation of the law declared by the Supreme Court by anybody and the State Government along with its functionaries remain mute spectators to such violation they would also be held responsible for permitting such violation.” But, in the same breath, it is then conceded in para 23.1 that, “However, till date no legislative or executive measures appear to have been taken to give effect to the law declared by the Supreme Court as directed by this Court.” Why have no such measures been taken? The needful in this direction must be done immediately!

                   More to the point, the Court then underscores in para 24 that, “It is well settled that in the absence of legislation or when there is a vacuum in law and the State has failed to fill up the same, constitutional courts have the jurisdiction, rather a constitutional obligation, to issue directions/guidelines for enforcement of fundamental rights. In the absence of legislation, guidelines were issued by the Supreme Court in DK Basu Vs State of West Bengal, (1997) 1 SCC 416; Vishaka Vs State of Rajasthan, (1997) 6 SCC 241; and Vinit Narayan Vs Union of India, (1998) 1 SCC 226, to mention only a few. Already reference has been made to the suo motu directions issued by the Supreme Court after considering the reports of Justice KT Thomas and Mr FS Nariman committees in Re: Destruction of Public and Private Properties (supra).”

                                              To put things in perspective, the Court then notes in para 26 that, “A public interest litigation was filed before this Court when two back to back bandhs were called in the State of Assam on 27.08.2012 and 28.08.2012 by two different organizations, which was registered as PIL No. 54/2012. Prayer was made to impose exemplary damages on the two organizations for organizing and enforcing such unconstitutional bandhs and to initiate criminal proceedings against such organizations through the criminal investigation department (CID), Assam, besides initiating contempt proceedings against the organizers. Further prayer made was for a direction to set up a bandh loss compensation fund from where affected persons suffering loss and injury to person and property due to such bandhs could be compensated. A Division Bench of this Court vide order dated 10.01.2013 observed as under:-

    “The issue raised in these PILs is a problem frequently faced by the citizens on account of ‘Bandh’ calls which not only endangers public property but also obstructs normal life of the community. The State is expected to have a mechanism for ensuring protection of normal community life and liberty of citizens. This is an inalienable function of a State”.”

                                         As things stand, it is then revealed in para 27 that, “Though the period of one month expired nothing tangible materialized. However, an affidavit was filed by the Home and Political Department, Government of Assam on 09.04.2015, wherein it was stated that a draft legislation called Assam Prevention of Unconstitutional Bandh Act 2014 was being proposed under the chairmanship of Justice (Retd) KN Saikia, a former Judge of the Supreme Court of India. It was stated that the said draft legislation was under active consideration of the Government. Six months time was sought for to complete the process of legislation.” It is then revealed in para 28 that, “On 18.05.2015, a Division Bench of this Court directed the Government to compile the number of bandh calls given during the year 2014 and to prepare estimate of loss incurred – state-wise, district-wise etc. on account of bandh.”

                                     What follows next can be read in para 29 which says that, “By an affidavit filed on 07.10.2015, Home and Political Department, Government of Assam placed on record the number of bandh calls given by different organizations in the State of Assam in the year 2014. From the statement annexed to the affidavit it could be gathered that a total of 68 Assam bandhs were called in 2014; total number of part Assam bandhs in the said year was 9; district bandhs was 32, and local bandhs was 21. It is further seen that certain organizations had called bandh in the same year, i.e. in 2014 itself more than once. Another statement was annexed to the said affidavit wherein the Government assessed the loss suffered by the State of Assam due to bandh calls during the year 2014 at Rs 2,94,325.896 lacs. Loss on account of district bandhs for the said year was assessed at Rs 1,48,406 lacs. That apart, it was also mentioned in the affidavit that the draft legislation being prepared by the drafting committee headed by Justice (Retd) KN Saikia was being re-drafted with necessary modifications to make it more concise and effective.” It is then observed in para 29.1 that, “Without commenting upon the methodology adopted by the State while making the assessment of loss as above, what is however unmissable is the extent or magnitude of loss suffered on account of such bandhs.”

                                        To say the least, para 30 then brings out that, “On 14.08.2017, learned Advocate General, Assam submitted before the Division Bench that the State Government was about to introduce the Assam Prohibition and Prevention of Bandh Bill, 2017 in the Legislative Assembly. However, in the subsequent hearing on 05.01.2018, the Division Bench was informed that an improved draft of the said bill was likely to be examined by the Cabinet in the first week of February, 2018. Finally, PIL No. 54 of 2012 was closed by the Division Bench vide the judgment and order dated 05.03.2018, taking note of the submission made by the state counsel that an improved draft of the said bill had been prepared and was in the process of being enacted as law governing/regulating the menace and expressing the hope and expectation that expeditious steps would be taken by the state while observing that the purpose of the PIL had been achieved.”

                                        What is, however, most unsettling to note is that para 31 then reveals that, “Though more than a year has gone by since then, the required legislation is nowhere in place.” As anticipated, para 32 then further states the obvious envisaging that, “Thus, it is evident that the State Government is in no hurry to enact a law or to bring in a legislation to give effect to the law laid down by the Supreme Court though submission was made before this Court that an improved draft of the Assam Prohibition and Prevention of Bandh Bill, 2017, had been prepared and was in the process of being enacted into a legislation. In the meanwhile, the general public continue to suffer the depredations of the bandh organizers so much so that even doctors attending to their duties have not been spared. Without expressing any opinion on the raison d’ etre for calling bandhs, it has to be mentioned that the State of Assam has witnessed a spurt in such bandhs and blockades in recent times causing enormous loss to the citizens and the government alike if the assessment of loss on account of bandhs made by the government for the year 2014 is taken as the yardstick. State cannot remain a mute spectator to such blatant violation of the law laid down by the Supreme Court.”

                                        More importantly, it is then made absolutely clear in para 33 that, “Enforcing a bandh besides being unconstitutional would also attract various provisions of the penal code. Since calling or enforcing bandh is illegal, it may amount to criminal conspiracy as defined under Section 120A of the Indian Penal Code, 1860, punishable at least under Section 120B(2). If there is an assembly of five or more persons the common object of the persons composing that assembly being to enforce a bandh or blockade (be it of road or rail), certainly it will be an unlawful assembly under Section 141 of the penal code and each member of the unlawful assembly liable to face punishment under Section 143 thereof. If a member or members of the unlawful assembly are armed or resorts to violence, then other provisions would be attracted. That apart, whoever obstructs a public servant from discharging his duty or holds out any threat, implicit or explicit, may be booked under Sections 186 and 189 of the penal code besides attracting Section 188. Restraining or confining any person from proceeding in any direction whether on vehicle or otherwise may attract Sections 339 to 342. It may also amount to using criminal force under Section 350 and punishable accordingly. Calling for or enforcing bandh may further attract Section 503 of the penal code (criminal intimidation) punishable under Section 506 thereof. In addition, if there is violence leading to injury to person or damage to property in the course of such bandh or blockade relevant provisions of the penal code would be attracted besides the provisions of the Prevention of Damage to Public Property Act, 1984 in the case of damage to public property.”

                                As a corollary, para 33.1 then mentions that, “Similarly, blocking a national highway would be an offence under the National Highways Act, 1956. Enforcing a bandh or blockade may attract Section 8B of the said Act.” Also, para 33.2 then states that, “Likewise, enforcing a railway blockade would attract provisions of the Railways Act, 1989. Obstructing or preventing any railway servant from attending to his duties would attract Section 146; trespassing into railway property would be an offence under Section 147. In addition, in case of violence or even anticipated violence where there is an attempt to wreck a train or damage/destroy railway property. Sections 150 and 151 would become applicable. In case of any attempt to cause hurt to railway passengers or which endangers safety of railway passengers, Sections 152 and 153 may be attracted. That apart, in the event of any railway blockade or bandh obstructing or attempt to obstruct running of train etc., Section 174 would be attracted.”

                                        Needless to say, it then follows in para 33.3 that, “Therefore, the organizer or organizers of such bandh or blockade, at least the principal office bearers of such organizer(s) would be liable to be prosecuted under various provisions of the Indian Penal Code, 1860, National Highways Act, 1956 and the Railways Act, 1989. In addition, those indulging in violence and intimidation including preventing people from attending to their duties would also have to be booked under the relevant penal provisions.”

                                        In essence, it is then eloquently and elegantly pointed out in para 34 that, “The Assam Police Act, 2007 (Police Act, for short) has been enacted to provide for an impartial and efficient police service safeguarding the interests of the people, making the police force professionally organized, service oriented and accountable to the law. It has repealed the Police Act, 1861 in its application to the State of Assam. Section 47 of the Police Act mentions the role and functions of the police which includes upholding and enforcing the law, promoting and preserving public order, such as roads, railways etc., to register and investigate all cognizable offences coming to their notice, to facilitate orderly movement of people and vehicles etc. Thus, it is the solemn duty of the police to uphold and enforce the law. Police Act also provides for accountability of police officers and personnel amongst others through the Assam Police Accountability Commission constituted under Section 70. As per Section 78, the Commission has the mandate to enquire into allegations of serious misconduct against police personnel either suo motu or on complaint; serious misconduct would include non-registration of FIR. The Commission also has the mandate to monitor departmental action or inquires against police officers of certain rank on complaints of misconduct which would mean any willful breach or neglect by a police officer of any law applicable to the police that adversely affects the rights of any member of the public which may also amount to dereliction of duty under Section 98. Therefore, from an overall perspective, not only the police personnel but the Assam Police Accountability Commission also has an important role to play in curbing the menace of illegal bandhs and blockades.”

                          Most importantly, it is then very rightly concluded after analyzing each and every aspect in para 35 that, “Therefore, Court is of the view that this is a fit case where suitable guidelines in the form of directions are required to be issued. Accordingly, the following directions are issued:-

1) Road blockades and rail blockades are nothing but variants of bandh; therefore, those are also illegal and unconstitutional.

2) If any organization calls for an Assam bandh or statewide road blockade/rail blockade and enforces the same, first information shall be lodged by the Commissioner of Police, Guwahati city or by any of his subordinate officer whom he may authorize before the Panbazar Police Station within 24 hours of such bandh/blockade, whereafter written information shall be furnished by the Commissioner of Police, Guwahati city to the Commissioner and Secretary to the Government of Assam, Home and Political Department within 3 to 7 days of lodging of first information with case details.

3) In case of a district bandh or a bandh covering more than one district or a local bandh or a blockade of either road or rail of similar nature, the jurisdictional Superintendent of Police shall lodge first information before the competent police station within 24 hours of such bandh or blockade, whereafter the said Superintendent of Police shall inform the Commissioner and Secretary to the Government of Assam, Home and Political Department about lodging of first information with case details within 3 to 7 days of lodging of first information.

4) Investigating Officers in all such cases shall carry out investigation expeditiously and file charge-sheets before the competent criminal court promptly so that the offenders can be tried in a fast track mode.

5) Assam Police Accountability Commission shall monitor filing of first information and registration of cases as per direction Nos. 2, 3 and 4 above. In case of any default or non-seriousness in complying with the above directions, appropriate action may be taken by the Assam Police Accountability Commission in accordance with law.

5.1)    In addition, Assam Police Accountability Commission shall submit monitoring report to the Registrar (Judicial), Gauhati High Court, Guwahati once every three months.

6) Commissioner and Secretary to the Government of Assam in the Home and Political Department within 7 days of receipt of information as per direction Nos. 2 and 3 above, shall file contempt petition(s) against the organizers and the main officer bearers of such organizations calling bandhs and blockades before this Court, wherein particulars of criminal cases registered against the organizers shall be furnished.

7) If there is any default in carrying out direction Nos. 2, 3, 4 and 6 above, that would be treated as dereliction of duty by the concerned authority, who would, thereafter, be liable to face departmental action, besides exposing themselves to committing contempt of court.

8) Registrar (Judicial), Gauhati High Court, Guwahati shall maintain a record of monitoring reports submitted by Assam Police Accountability Commission. On receipt of each report, he shall examine whether any related contempt petition has been filed in terms of direction No. 6 above, if the occasion had so arisen. If no such contempt petition has been filed, he shall register a contempt case against the organizers and persons concerned which may include the Commissioner and Secretary to the Government of Assam in the Home and Political Department for failure to take steps in terms of direction No. 6.

9)  Government of Assam in the Home and Political Department shall make an assessment of loss caused to the State on account of bandh or blockade, be it state-wise or district-wise or locality wise, which shall be recoverable from the organizers and main office bearers of such bandh or blockade as arrears of land revenue.

10)                  Government of Assam in the Home and Political Department shall constitute a Bandh Loss Compensation Fund within a period of 3 (three) months from today, which will be managed by an authority headed by a retired District and Sessions Judge which may include one Administrative Officer, retired or serving. The authority may take assistance of an assessor or a valuer while examining or assessing claim for compensation.

11)                  The quantum of loss recovered under direction No. 9 shall be deposited by the Government of Assam in the Home and Political Department into the Bandh Loss Compensation Fund.

12)                  All claims for compensation for loss to person or property because of bandh and blockade shall be decided by the authority of the Bandh Loss Compensation Fund by evolving its own procedure, which should however ensure quick settlement of such claims. Claims can be lodged by private individuals, both private and public bodies, juristic persons etc.

13)                  Claim of the petitioner shall be placed before the Bandh Loss Compensation Fund immediately on its constitution, whereafter the same shall be decided by the authority of the fund in accordance with law.

                                  It cannot be lost on us that it is then clarified in para 36 that, “Since the above directions have been issued in the nature of guidelines and would hold the field till enactment of appropriate legislation by the State, it would be open to the State of Assam in the Home and Political Department to seek clarification, if the occasion so arises.”

                             To conclude, the Gauhati High Court has in this latest, landmark and laudable judgment very rightly termed bandhs, road and rail blockades as illegal and also unconstitutional. It has also rightly held that organizers must be prosecuted for they are liable fully as everything happens under their supervision! They cannot escape liability by blaming others or outsiders for it! The organizers must be prosecuted, punished and held accountable for all the damage that results because of the bandh and strike calls given by them! It is beyond a straw of doubt that the Gauhati High Court has very rightly held that the organizers must compensate the people who claim to have suffered losses because of such bandh and strike calls given by them! The guidelines issued by the Gauhati High Court as illustrated above are quite remarkable and needs to be implemented in totality! There can be no denying or disputing it! Those who dare to indulge in wanton violence and cause damage to public and private property must be liable to not only pay damages for it but also must be jailed for taking law in their own hands! There has to be zero tolerance for such wanton acts of vandalism and violence! If they are swiftly and sternly prosecuted and punished, only then will a right, loud and strong message go to all such lumpen and anti-social elements that they cannot escape punishment by resorting to violence and vandalism under the garb of bandh and hartal!

Sanjeev Sirohi, Advocate,

s/o Col BPS Sirohi,

A 82, Defence Enclave,

Sardhana Road, Kankerkhera,

Meerut – 250001, Uttar Pradesh.

Office Setup and Staff Recruitment for Startups

Office Setup and Staff Recruitment for Startups
Office Setup and Staff Recruitment for Startups

Do you want to setup your own office?

  • Do you want to establish your own office with everything ready in less than 30 days?
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Registering your company or business entities with different Tax Authorities like Income Tax, PAN, TAN, Service Tax, Sales Tax, VAT

Registering your company or business entities with different Tax Authorities like Income Tax, PAN, TAN, Service Tax, Sales Tax, VAT
Registering your company or business entities with different Tax Authorities like Income Tax, PAN, TAN, Service Tax, Sales Tax, VAT

Taxation authority is a government agency responsible for the intake of government revenue, including taxes and sometimes non-tax revenue. Depending on the jurisdiction, revenue services may be charged with tax collection, investigation of tax evasion, or carrying out audits.So If you are registering your company or business entities then take permission from tax authorities for following procedures –

Income Tax – An income tax is a tax imposed on individuals or entities. Income tax generally is computed as the product of a tax rate times taxable income. The tax rate may increase as taxable income increases (referred to as graduated rates). Taxation rates may vary by type or characteristics of the taxpayer. Capital gains may be taxed at different rates than other income. Credits of various sorts may be allowed that reduce tax. Some jurisdictions impose the higher of an income tax or a tax on an alternative base or measure of income.

PAN – Bermanent account number, is a unique 10-digit alphanumeric identity allotted to each taxpayer by the Income Tax Department under the supervision of the Central Board of Direct Taxes. It also serves as an identity proof. PAN is mandatory for financial transactions such as receiving taxable salary or professional fees, sale or purchase of assets above specified limits, buy mutual funds and more. The primary objective of PAN is to use a universal identification key to track financial transactions that might have a taxable component to prevent tax evasion. The PAN number remains unaffected by change of address throughout India.

TAN – Tax Deduction and Collection Account Number is a ten digit alphanumeric number that’s allotted to those who are supposed to deduct tax at source or TDS. TAN number or TAN registration is very important for businesses deducting tax at source and is required to be quoted in TDS or TCS return.

Service Tax – Service tax is applicable for taxable service provider. It’s levied by Central Government of India on services provided or to be provided excluding services covered under negative list and considering the Place of Provision of Services Rules, 2012 and collected as per Point of Taxation Rules, 2011 from the person liable to pay service tax.

Sales Tax – A sales tax is a tax paid to a governing body for the sales of certain goods and services. Usually laws allow (or require) the seller to collect funds for the tax from the consumer at the point of purchase.

VAT – A value-added tax is a type of general consumption tax that is collected incrementally, based on the value added, at each stage of production and is usually implemented as a destination-based tax, where the tax rate is based on the location of the customer.

For Tax related query and services contact us – 

 

Legal and Tax compliance

Legal and Tax compliance
Legal and Tax compliance

Our teams ensure you that we comply with regulations and legislation affecting our business. We are also provide valuable advice to your business on everything from mergers and acquisitions to fiscal policies to legal risks. Consequently, we offer a wealth of opportunities for legal and tax professionals.

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Business Expansion via Promotions

business-expansion-via-promotions
Business Expansion via Promotions

Do you want to grow your business and expand into new markets?

If your answer is Yes, we can help you using following ways –

  • Social media
  • Blog
  • YouTube and Flickr
  • SEO your company website
  • Press releases for publicity
  • Online community and much more tools we have for promote your business.

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Office Setup and Staff Recruitment

Do you want to setup your own office?

  • Do you want to establish your own office with everything ready in less than 30 days?
  • Are you planning to setup your back office in a low cost country to support your business expansion?
  • Are you a start-up company looking to establish your own office?
  • Do you want to outsource your projects but you want total control of all the staff that works for you?

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You can take advantage of our local knowledge and experience. You do not need to worry about local regulations and procedures. We will take care of everything for you, from start to finish.

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For details contact us

THE ADDITIONAL EMOLUMENTS (COMPULSORY DEPOSIT) ACT, 1974

CHAPTER I
1. Short title, extent and commencement. (1) This Act may be called the Additional Emoluments (Compulsory Deposit) Act, 1974.(2) It extends to the whole of India.

PRELIMINARY

(3) It shall be deemed to have come into force on the 6th day of
July, 1974, except section 14 which shall come into force at once.

2.Definitions.

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

(a) “appointed day” means the 6th day of July, 1974;

499.(b) “additional dearness allowance” means such dearness allowance as may be sanctioned from time to time, after the appointed day, over and above the amount of dearness allowance payable in accordance with the rate in force immediately before the date from which such sanction of additional dearness allowance is to take effect.

Explanation I.-Where payment of dearness allowance is linked to a cost of living index or any other factor, any automatic payment, after the appointed day, of dearness allowance in consequence of any rise in such cost of living index or in consequence of any change in such other factor shall, notwithstanding the provisions of this clause, be deemed to be the additional dearness allowance.

Explanation II.-For the purpose of computation of the additional dearness allowance in relation to an employee who enters into any post after the appointed day, dearness allowance payable, immediately before the appointed (Jay, in relation to such post shall be deemed to be the dearness allowance payable to such employee as if, he were holding that post on the appointed day and any excess over and above the said dearness allowance shall be deemed, for the purposes of this Act, to be the additional dearness allowance in relation to such employee;

(c) “additional wages” means such wages, over and above the wages payable to an employee in accordance with the rates in force immediately before the appointed (Jay, as may become payable to the employee in respect of any period after the appointed day in pursuance of any wage revision, whether by or under an agreement or settlement between the parties or any award, decree or order of any court, tribunal or other authority or otherwise, but does not include-

(i) any increment due to the employee in accordance with the time scale of pay applicable to the post held by him immediately before the appointed day, and any consequent increase in any allowance (not being dearness allowance) admissible under any rule or order in force immediately before the appointed day;

(ii) any higher wages payable to the employee on his-

(a) promotion to a higher post and any increment, being an increment within the prescribed limits, due to the employee in such higher post

(b) deputation or transfer to an equivalent post or to any post involving higher responsibilities and duties;

(iii) any special pay, honorarium, fee or reward payable for any special work done;

(iv) any remuneration payable for overtime work;

(v) any increase in wages consequent on the revision of the minimum rates of wages fixed under the Minimum
Wages Act, 1948; ( 11 of 1948.)

(vi) any increase in wages sanctioned in pursuance of the recommendations made-

(a) by the Third Central Pay Commission;

(b) before the appointed day, by any Pay
Commission appointed by a State Government, in relation to the employees of that Government;

500

(c) by any committee constituted, before the appointed day, by Parliament, Supreme Court or any
High Court in relation to any employee of
Parliament, Supreme Court or High Court, as the case may be.

Explanation I.-Where any wage revision made after the appointed day is to be effective from a date prior to the appointed day, the wages payable immediately before, the appointed day, before such wage revision, shall, for the purposes of computation of additional wages, be deemed to be the wages.

Explanation II.-Any bonus (including incentive and pro-
duction bonus) paid after the appointed day at a rate over and above the rate at which it was last paid before the appointed day, shall be deemed or the purposes of this Act, to be additional wages;

(d) “bank deposit rate” means the highest of the maximum rates at which interest may be paid on different classes of deposits (other than those maintained in savings account or those maintained by charitable or religious institutions) by different classes of scheduled banks in accordance with the directions given or issued to banking companies generally by the Reserve Bank of India tinder the Banking Regulation Act,
1949; (10 of 1949.)

(e) “dearness allowance” means all cash payments, by whatever name called, made to an employee on account of rise in the cost of living;

(f) “Deposit Account” means an account opened and maintained under section 5;

(g) “emoluments” includes wages and dearness allowance;

(h) “employer” means,-

(i) in relation to an establishment which is a factory, the owner or occupier of the factory, including the agent of such owner or occupier, and where a person is named as manager of the factory under clause (f) of sub-section (1) of section 7 of the Factories Act, 1948,
( 63 of 1948. ) the person so named;

(ii) in relation to an establishment belonging to or under the control of the Central Government or a State
Government, the person or authority appointed by the appropriate Government for the supervision and control of the employees, or where no person has been so appointed, the head of the Department concerned;

(iii) in relation to an establishment belonging to or under the control of any local authority, the person appointed by such authority for the supervision and control of the employees, or where no person has been so appointed, the Chief Executive Officer of the local authority;

(iv) in any other case, the person who, or the authority which, has the ultimate control over the affairs of the establishment, and where the said affairs are entrusted to any other person, whether called a manager, managing director or by any other name, such person;

and includes, in the case of a deceased employer, the legal representative of such deceased employer;

501.(i) “local authority” means any municipal committee, district board, body of port commissioners, panchayat or other authority legally entitled to, or entrusted by the
Central or any State Government with the control or management of any municipal or local fund;

(j) “nominated authority” means such authority as may be nominated by the Central Government for the purposes of this
Act and different authorities may be nominated for different purposes;

(k) “notification” means a notification published in the
Official Gazette;

(l) “Prescribed” means prescribed by-rules made under this
Act;

(m) “Scheme” means a scheme framed under this Act;

(n) “specified authority” means the authority specified under sub-section (1) of section 5;

(o) “wages” means all remuneration (whether by way of salary, allowances or otherwise) expressed, or capable of being expressed, in terms of money, which would, if the terms of employment, express or implied- were fulfilled, be payable to a person employed in respect of his employment or of work done in such employment, and includes-

(i) any remuneration payable under any agreement, or settlement between the parties or any award, decree or order of any court, tribunal or other authority;

(ii) any remuneration to which the person employed is en,titled in respect of overtime work or holidays or any leave period;

(iii) any additional remuneration payable under the terms of employment, including bonus, whether under a scheme of profit sharing or otherwise;

(iv) any sum to which the person employed is entitled under any scheme framed under any law for the time being in force;

(v) any allowance paid for house accommodation, or where house accommodation is provided, the value of such accommodation, and the value of electricity or water, or both, supplied, and the value of medical attendance or other amenity,

but does not include-

(1) any contribution paid by the employer to any pension or provident fund, and the interest which may have accrued thereon;

(2) any travelling or running allowance or the value of any travelling concession;

502.(3) any sum, not exceeding rupees two hundred and fifty per annum, paid to the employed person to defray special expenses entailed on him by the nature of his employment;

(4) any compensation or gratuity payable on the termination of employment;

(5) any dearness allowance.

3.Persons to whom this Act applies.

3. Persons to whom this Act applies. This Act shall apply to an employee of-

(a) the Central or State Government;

(b) a local authority;

(c) a company as defined in section 3 of the Companies Act,
1956, (1 of 1956.) including a foreign company within the meaning of section 591 of the Companies Act, 1956, and a
Government company as defined in section 617 of that Act; (43.of 1961.)

(d) any other corporation, including a society or body established by, or registered under, a Central, Provincial or
State Act;

(e) any individual, association of persons or body of individuals, partnership firm or Hindu undivided family required by the Income-tax Act, 1961 (43 of 1961.) to deduct income-tax at source from the emoluments paid to their employees;

(f) any establishment owned or maintained in India by a trust, fund or institution established for a charitable or religious purpose, and required by the Income-tax Act, 1961,
( 43 of 1961.) to deduct income-tax at source from the emoluments paid to their employees;

(g) any establishment, not being an establishment owned by
Government, local authority or person specified, respectively, in clauses (a) to (f) (both inclusive), to which the provisions of any law relating to provident funds
(other than those established under the Public Provident Fund
Act, 1968) (23 of 1968.) apply;

(h) any other establishment, not being an establishment to which any of the foregoing clauses apply, established at the instance, or in pursuance of a resolution, of the Central or
State Government or wholly or substantially financed by the
Central or State Government..

Explanation.-Where any grant or loan to an establishment from the Consolidated Fund of India or of any State or of any
Union territory having a Legislative Assembly in a financial year is not less than rupees five lakhs and the amount of such grant or loan is not less than seventy-five per cent. of the total expenditure of that establishment, such establishment shall be deemed, for the purposes of this Act, to be substantially financed by the Central or State
Government, as the case may be.

503.
4.Act to have overriding effect.

4. Act to have overriding effect. The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than this Act or in any instrument having effect by virtue of any enactment other than this Act.

CHAPTER IICOMPULSORY DEPOSIT OF ADDITIONAL EMOLUMENST

 

5. Additional Wages Deposit Account and Additional Dearness
Allowance Deposit Account. (1) There shall be opened by such authorities as may be specified in the scheme two separate accounts, to be known, respectively, as the Additional Wages Deposit Account and the Additional Dearness Allowance Deposit Account, and different authorities may be specified for different establishments or different categories of employees or establishments.

(2) The specified authority shall, in relation to each Deposit
Account, open a separate ledger account in the name of each employee in relation to whom any contribution is made to the said Account, and credit the contributions so made in the said ledger account.

6.Duty of employer or other person to make deductions of additionalwages and additional dearness allowance from emoluments.

6. Duty of employer or other person to make deductions of additional wages and additional dearness allowance from emoluments.
(1) For the purposes of this Act, the deductions specified in sub-
section (2) shall be made,-

(a) in the case of additional wages, for a period of one year from the appointed day; and

(b) in the case of additional dearness allowance, for a period of 1[three years] from the appointed day.

(2) On the commencement of this section,-

(a) every employer, who draws, from the Consolidated Fund of India or of any State or of any Union territory having a
Legislative Assembly, and disburses, after the appointed day, emoluments of an employee to whom this Act applies, shall, as and when emoluments are disbursed by him for any period, deduct from the emoluments so disbursed, the whole of the additional wages and one-half of the additional dearness allowance and credit the amount so deducted, in accordance with the scheme, to the Additional Wages Deposit Account and the Additional Dearness Allowance Deposit Account, respectively;

(b) every other employer, who disburses, after the appointed day, emoluments to any employee to whom this Act applies, shall, as and when emoluments are disbursed by him for any period, deduct from the emoluments so disbursed, the whole of the additional wages and one-half of the additional dearness allowance, and shall remit, in accordance with the scheme, the amounts so deducted to the nominated authority and on receipt of such amounts the nominated authority shall credit the amounts so received to the Additional Wages
Deposit Account and the Additional Dearness Allowance Deposit
Account, respectively
———————————————————————-

1 Subs. by Act 74 of 1976, s. 2 (w.e.f. 11.6.1976).

———————————————————————-

504.(c) any employee, to whom this Act applies, who draws, after the appointed day, his own emoluments shall,-

(i) if he is employed in an establishment owned or maintained by Government, make deductions from his salary bill in respect of the whole of the additional wages and one-half of the additional dearness allowance and the specified authority shall credit the amount so deducted, in accordance with the scheme, to the
Additional Wages Deposit Account and the Additional
Dearness Allowance Deposit Account, respectively;

(ii) if he is employed in any other establishment, remit the whole of the additional wages and one-half of the additional dearness allowance, in accordance with the scheme, to the nominated authority, and on receipt of such amount, the nominated authority shall credit the amount so received to the Additional Wages
Deposit Account and the Additional Dearness Allowance
Deposit Account, respectively.

Explanation.-In computing the amount to be credited to the Addi-
tional Wages Deposit Account and the Additional Dearness Allowance
Deposit Account. the amount contributed [in relation to such additional wages or additional dearness allowance shall not-

(a) to the extent of the contribution which is compulsorily required to be made to any provident or other fund under any law for the time being in force; or

(b) to the extent of the contribution made to any other provident fund, recognised under any other law for the time being in force, at a rate not exceeding the rate at which such contribution was being made immediate before the appointed day,

be taken into account.

(3) The specified authority shall, as soon as may be practicable after the end of each year, prepare separately, in relation to the amounts credited to the respective Deposit Accounts to the credit of each employee, and furnish to the employee a copy of the said accounts showing therein the amounts credited thereto in relation to the employee.

7.Deposit to carry simple interest.

7. Deposit to carry simple interest. (1) Every amount credited under section 6, in relation to an employee in a Deposit Account, shall carry simple interest at a rate, which shall be two and a half per cent. over and above the bank deposit rate.

(2) The interest due on the amount credited in any Deposit
Account shall be calculated in such manner as may be specified in the scheme.

(3) Interest accruing on amounts credited under section 6 to any
Deposit Account shall ensure to the benefit of the employees in relation to whom such amounts have been credited.

(4) For the purpose of the deductions under section 80L of the
Income-tax Act, 1961, (43 of 1961.) interest received on a deposit under this Act shall be deemed to be interest received on a deposit with a banking company to which the Banking Regulation Act, 1949, (10.of 1949.) applies.

8.Assessment for —— purpose of income tax.

8. Assessment for —— purpose of income tax. (1) For the purposes of computing, under the Income-tax Act, 1961, the total income of an employee, the amount credited to his ledger account in the Additional Wages Deposit Account or the Additional Dearness
Allowance Deposit Account Shall not be included in his total income of the previous year in which it is so credited; but so much of

505.the amount as is repaid to him shall be liable to be included in his total income of the previous year in which it is repaid.

(2) For the purposes of computing, under the Income-tax Act,
1961, (43 of 1961.) the total income of an employee, the amount repaid to him under this Act shall be deemed to be salary paid to him in arrears and the provisions of sub-section (1) of section 89 of that
Act shall apply accordingly

Explanation.-In this section, “previous year” and “total income have the meanings respectively assigned to them in the Income-tax Act
1961. (43 of 1961.)

9.Repayment of deposits.

9. Repayment of deposits. (1) Subject to the provisions of sub-
section (2), every amount credited to the Deposit Accounts shall be repayable with interest due thereon,–

(a) in the case of an amount credited to the Additional
Wages Deposit Account, at any time after the expiry of one year from the appointed day; and

1[(b) in the case of an amount credited to the Additional
Dearness Allowance Deposit Account,-

(i) for any period ending on the 30th day of June,
1976, in cash, at any time after the expiry of two years from the appointed day; and

(ii) for any period ending after the 30th day of June,
1976,-

(a) by crediting tithe provident fund account of the employee, at any time after the expiry of a period of four years from the appointed day, if such employee is a subscriber to any provident fund;

(b) in cash, at any time after the expiry of a period of four years from the appointed day, in the case of an employee who is not a subscriber to any provident fund:]

Provided that nothing in this section shall prevent earlier repayment of any amount credited to either of the Deposit Accounts with interest due thereon in any case in which any person authorised by the Central Government in this behalf is satisfied that extreme hardship will be caused unless such repayment is made:

Provided further that an employee may, at his option, retain the whole or any part of the amount, credited in relation to him in the
Additional Wages Deposit Account or the Additional Dearness Allowance
Deposit Account, or both, until his superannuation or until such date as may be specified by the Central Government in this behalf:

Provided also that the whole of the amount standing to the credit of an employee (not being an employee in a seasonal establishment) in
1[the additional Wages Deposit Account shall be repaid to him in cash.”] on his 1[the Additional Wages Deposit Account shall be repaid to him in cash] superannuation or resignation from office or on the termination of his employment.

(2) The aggregate amount credited to 1[any Additional Wages
Deposit Account] relation to an employee shall be repaid to the employee in five equal annual instalments commencing from the expiry of one year ***1 from the appointed day, together with interest due on the whole, or, as the case may be, part of the amount of compulsory deposit which remains unpaid.

1[(3) The aggregate amount credited to the Additional Dearness
Allowance Deposit Account by or in relation to an employee for the period ending on the 30th day of June, 1976, shall subject to the provisions of sub-section (5), be repaid, in cash, to the employee in five equal annual instalments commencing from the expiry of a period of two years from the appointed day,. together with interest due on the whole or, as the case may be, part of the amount of compulsory deposit which remains unpaid.

(4) The aggregate amount credited to the Additional Dearness
Allowance Deposit Account by or in relation to an employee for the period commencing on the 1st day of July, 1976, and ending on the 5th day of July, 1977, together with interest due on the whole, or, as the case may be, part of the amount of compulsory deposit which remains unpaid, shall, subject to the provisions of sub-section (5), be repaid to the employee in five, equal annual instalments commencing on the
6th day of July, 1978, and each such instalment shall be credited to the provident fund account of the employee:

Provided that the employer shall not be required to make any contribution under the Employees Provident Funds Act, 1952, or under any other law for the time being in force, in relation to the amounts so credited to the provident fund account of the employee:

Provided further that, in the case of the employees who do not subscribe to any provident fund, the aggregate amount so repayable shall be repaid in cash in five equal annual instalments commencing on the 6th day of July, 1978.(5) On the superannuation, resignation or termination of employment of an employee, the whole of the amount standing to the credit of such employee in the Additional Dearness, Allowance Deposit
Account, shall be repaid,-

(a) in cash, in the case of any amount credited to the
Additional Dearness Allowance Deposit Account for any period ending on the 30th day of June, 1976;

(b) in the case of any amount credited to the Additional
Dearness Allowance Deposit Account for any period ending, after the 30th day of June, 1976,-

(i) by crediting such amount-to the provident fund account of such employee, if he is the subscriber of any such account, or

(ii) in cash, where such employee is not a subscriber to any provident fund.

Explanation.-For the purposes of this section, “provident. fund”
has the meaning assigned to it in section 2(e) of the Provident Funds
Act, 1925.]

10.Power of Central Government to frame scheme.

10. Power of Central Government to frame scheme. (1) The Central
Government shall, by notification, frame one or more schemes in relation to the amounts credited to the Deposit Accounts under this
Act.

(2) A scheme framed under sub-section (1) may provide for-

(a) the authorities by which the Additional Wages Deposit
Account and the Additional Dearness Allowance Deposit
Account, shall be opened and maintained;

———————————————————————-

1 Subs. Omitted & ins. by Act 74 of 1976, s. 3 (w.e.f. 11-6-
1976).

———————————————————————-

29 Law-65.

506.(b) the time and manner in which amounts deducted from additional wages or additional dearness allowance shall be deducted and credited to the respective Deposit Account;

(c) the documents to be issued to persons in relation to whom amounts have been credited to the Deposit Accounts as evidence of such credit;

(d) authority or authorities by or through which credits to the Deposit Accounts may be made;

(e) the accounts to be maintained with respect to the amounts credited to the Deposit Accounts and the officer by whom such Accounts shall be maintained;

(f) the nomination of persons to receive the amount standing in a Deposit Account to the credit of an employee in the event of his death, and cancellation or change of such nomination;

(g) the issue of duplicate of any document issued as evidence of any credit in the event of loss or destruction of the original and the fee, not exceeding rupees two, on the payment of which such duplicate may be issued;

(h) repayment of amounts credited to the Deposit Accounts with interest due thereon and the conditions, if any, under which such repayment may be made;

(i) any other matter which may be necessary or proper for the effective implementation of the scheme.

(3) A scheme framed under this section may provide that all or any of its provisions shall take effect, either prospectively or retrospectively, on such date, not being a date earlier than the appointed day, as may be specified in this behalf in the scheme and every scheme framed under this section shall have effect notwithstanding anything contained in any law (other than this Act)
for the time being in force or in any instrument having effect by virtue of any enactment other than this Act.

(4) The Central Government may make a scheme to add to, amend or vary any scheme framed under sub-section M.

11.Rounding off.

11. Rounding off. Where the amount of any credit to be made in any Deposit Account contains a part of a rupee, then, such part, if it is fifty paise or more, shall be increased to one complete rupee and if it Is less than fifty paise, it shall be ignored.

CHAPTER IIIMISCELLANEOUS

 

12. Amounts due to be first charge in the case of insolvency or liquidation of the employer. (1) Where any amount required by this Act to be credited to any Deposit Account or remitted to a nominated authority has not been so credited or remitted by any employer, the amount in respect of which such omission or failure was made, together with interest due thereon calculated at the rate specified in sub-
section (1) of section 7, shall, in the event of the employer being adjudicated by any court to be insolvent or, being a company is ordered by any court to be wound up, be deemed to be first charge on the assets of the insolvent or of the company, as the case may be, and shall have priority over all other debts, and be paid in full.

507.
(2) The court shall cause the sum which is required, under sub-
section (1), to be paid in priority to all other debts to be remitted to the. nominated authority for crediting the same to the appropriate
Deposit Account.

13.Transfer of establishments.

13. Transfer of establishments. Where an employer, in relation to an establishment to which this Act applies, transfers that establishment in whole or in part by sale, gift or otherwise or grants any licence in respect of such establishment the employer and the person to whom the establishment is so transferred or the licence is so given shall be jointly and severally liable to credit to the appropriate Deposit Account or, as the case may be, remit to the nominated authority, the sums which are required by this Act to be so credited or remitted:

Provided that the liability of the transferee or licensee shall be limited to the value of the assets obtained by him on such transfer or licence, as the case may be.

14.Penalties.

14. Penalties. (1) Whoever, with a view to-

(a) avoiding making any deduction of additional wages and additional dearness allowance and crediting the same to the
Additional Wages Deposit Account or the Additional Dearness
Allowance Deposit Account, as the case may be, or

(b) aiding or abetting any other person to avoid making any such deduction or credit,

knowingly makes, or causes to be made, any statement or representation which he knows to be false or does not believe to be true, shall be punishable with imprisonment for a term which may extend to six In months, or with fine which may extend to one thousand rupees, or with both.

(2) Any employer who omits or fails to credit to any Deposit
Account or remit any amount to the nominated authority, as and when such credit or remittance becomes due under this Act or any scheme framed thereunder, shall be punished-

(a) with imprisonment for a term which shall not be less than three months but may extend-

(i) in the case of the first offence, to six months, and

(ii) in the case of any second or subsequent offence, to one year:

Provided that the court may, for any adequate and special reasons, to be recorded by it in the judgment, impose a sentence of imprisonment for a term lesser than three months or a fine in lieu of imprisonment; and

(b) also with fine which shall not be less than the amount which has not been credited to a Deposit Account or remitted to the nominated authority as required by this Act, and the interest due there on, calculated at the rate specified in sub-section (1) of section 7, but may extend to twice the said amount and the interest due thereon, and out of the fine, if realised, the court trying the offence shall cause an amount equal to the amount which has not been credited to a Deposit Account or remitted to the nominated authority with interest due thereon, to be remitted to the nominated authority for

508.crediting the same to the appropriate Deposit Account, and on such amount being remitted to the nominated authority, the liability of the employer shall, to the extent of the amount so remitted by the court, stand discharged.

(3) Whoever contravenes any provision of this Act or any scheme or order made thereunder for which no penalty has been separately pro-
vided for shall be punished with imprisonment for a term which may extend to six months, or with fine which may extend to one thousand rupees, or with both.

15.Offences by companies.

15. Offences by companies. (1) Where any offence under this Act has been committed by a company, every person who at the time the offence was committed was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:

Provided that nothing contained in this sub-section shall render any such person liable to any punishment, if he proves that the offence was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence.

(2) Notwithstanding anything contained in sub-section (1), where an offence under this Act, has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.

Explanation.-For the purposes of this section,-

(a) “company” means any body corporate and includes a firm or other association of individuals; and

(b) “director”, in relation to a firm, means a partner in the firm, and, in relation to a Hindu undivided family, means the Karta of such family.

16.Cognizance of offences.

16. Cognizance of offences. No court shall take cognizance of any offence punishable under this Act except upon a complaint made by the Central Government or any officer or authority authorised in writing by the Central, Government in this behalf.

17.Power to exempt.

17. Power to exempt. Where the Central Government is of the opinion that it is necessary or expedient so to do either in the public interest or having regard to the peculiar circumstances of any case, it may, by notification, and subject to such conditions, if any, as it may specify in the notification,-

(a) exempt any establishment or category of employees, working in any establishment from the operation of all or any of the provisions of this Act;

(b) exempt, in the case of extreme hardship to any employee, from crediting any amount in relation to such employee to the Additional Wages Deposit Account;

509.(c) empower deductions from additional wages in relation to an employee or class of employees, at a rate lesser than the rate specified in this Act.

18.Power to delegate.

18. Power to delegate. The Central Government may, by notification, direct that ally power which may be exercised by it under this Act or any scheme framed under this Act shall, subject to such restrictions and conditions, if any, as it may specify in the notification, be exercised also by-

(a) such officer or authority subordinate to the Central
Government; or

(b) such State Government or such officer or authority sub-
ordinate to a State Government; or

(c) such other person or authority,

as may be specified in the notification:

Provided that the powers conferred by section 10 and section 24.shall not be delegated under this section.

19.Protection against attachment.

19. Protection against attachment. (1) The amount standing to the credit of any employee in any Deposit Account shall not be liable to attachment under any decree or order of any court in respect of any debt or liability incurred by the employee.

(2) Any amount standing to the credit of an employee, in any
Deposit Account at the time of his death and payable to his, nominee under the scheme shall vest in the nominee and shall be free from any debt or other liability incurred by the deceased or incurred by the nominee before the death of the employee.

20.Power to call for returns and inspect accounts.

20. Power to call for returns and inspect accounts. (1) The nominated authority or any officer authorised by the nominated authority in this behalf may call for such returns, as may be prescribed, from any employer to whom this Act applies.

(2) The books of account and other books and papers of any em-
ployer to whom this Act applies shall be open to inspection by the nominated authority or any person authorised by the Central Government in this behalf during business hours:

Provided that such inspection may be made without giving any previous notice to the employer or any officer of the employer.

(3) The nominated authority or any authorised officer may, during the course of inspection,–

(i) make, or cause to be made, copies of the books of account and other books and papers;

(ii) place, or cause to be placed, any marks of identification thereon in token of the inspection having been made.

(4) If after inspection the nominated authority or the authorised officer finds that any additional wages or additional dearness allowance has not been credited by the employer to the appropriate Deposit Account or, as the case may be, remitted to the nominated authority, it, or he shall determine the amount in respect of which such credit or remittance has not been made:

Provided that no such determination shall be made except after giving to the employer a reasonable opportunity of being heard.

510.(5) It shall be the duty of every employer to whom this Act applies, to furnish to the nominated authority a copy of the award, decree or order of any court, tribunal or other authority or agreement or settlement relating to wage revision or revision of dearness allowance and also to produce such books of account and other books and papers as the nominated authority or the officer making the inspection may require.

(6) Where any revision of wages or dearness allowance is made otherwise than in pursuance of any award, decree or order of any court, tribunal or other authority or agreement or settlement, the employer shall give an intimation to the nominated authority about such revision of wages or dearness allowance and furnish to the nominated authority such books of account and other books and papers as that authority may require.

21.Protection of action taken in good faith.

21. Protection of action taken in good faith. No suit or other legal proceeding shall lie against the Central Government or any State
Government or any officer authorised by the Central or State
Government to discharge any functions under this Act, for any loss or damage caused or likely to be caused by anything which Is in good faith done or intended to be done in pursuance of this Act or any scheme framed thereunder.

22.Persons performing functions under this Act to be public servants.

22. Persons performing functions under this Act to be public servants. Any person to whom any power of the Central Government is delegated under section 18 or who is authorised to exercise any Power specified in section 20 shall, if he) is not a public servant, be deemed to be a public servant within the meaning of section 21 of the
Indian Penal Code. (45 of 1860.)

23.Recovery of arrears.

23. Recovery of arrears. Without prejudice to the provisions of section 14, any amount which ought to have been credited under this
Act to a Deposit Account or remitted to the nominated authority but has not been so, credited or remitted in accordance with the provisions of this Act or scheme or order made thereunder, shall be payable by the employer, together with interest due thereon calculated at twice the rate at which interest is payable under sub-section (1)
of section 7, and in default of such payment, such amount, together with interest due thereon at the aforesaid rate, shall be recoverable as an arrear of land revenue:

Provided that where any such amount has been recovered by the court under sub-section (2) of section 14, the said amount shall not be recoverable under this section.

24.Power to make rules.

24. Power to make rules. The Central Government may, by notification, make rules to carry out the provisions of this Act.

25.26.Power to remove difficulties.

26. Power to remove difficulties. If any difficulty arises in giving effect to the provisions of this Act, the Central Government may, by order, 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 appointed day.

27.Repeal and saving.

27. Repeal and saving. (1) The Additional Emoluments (Compulsory
Deposit) Ordinance, 1974 (8 of 1974.) is hereby repealed.

(2) Notwithstanding such repeal, anything done or any action taken under the Ordinance so repealed (including any appointment, exemption, nomination, direction or order made thereunder) shall be deemed to have been done or taken under the corresponding provisions of this Act, and the repeal of the said Ordinance shall not affect any penalty or punishment incurred in respect of any offence committed against the said Ordinance or any investigation or legal proceeding in respect of such penalty or punishment and any such investigation or legal proceeding may be instituted or continued and any such penalty or punishment may be imposed as if section 12 and other provisions of the said Ordinance. necessary for the purposes aforesaid, had been included in this Act.

 
 

THE AIR CORPORATIONS (TRANSFER OF UNDERTAKINGS AND, REPEAL) ACT, 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.Short title and commencement.

1. Short title and commencement. (1) This Act may be called the
Air Corporations (Transfer of Undertakings and Repeal) Act, 1994.(2) Definitions. It shall be deemed to have come into force on the 29th day of January. 1994.2.Definitions.

2. 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 section 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”
(27 of 1953.) established under section 3 of the Air
Corporations Act, 1953, and “corporation” means either of the corporations.

2.3.Undertakings of corporations to vest in companies.

3. Undertakings of corporations to vest in companies.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.

4.General effect of vesting of undertaking in the companies.

4. General effect of vesting of undertaking in the companies. (1)
The undertaking of a corporation which is transferred to, and which vests in, a company under section 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 imme-
diately 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.

5.Licences, etc., to be deemed to have been granted to companies.

5. Licences, etc., to be deemed to have been granted to companies. 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.

6.Tax exemption or benefit to continue to have effect.

6. Tax exemption or benefit to continue to have effect. (1) Where any exemption from, or any assessment with respect to, any tax has been granted or made or any benefit by way of set off or carry forward, as the case may be, of any unabsorbed depreciation or invest-
ment allowance or other allowance or loss has been extended or is available to a corporation under the Income-tax Act, 1961, such exemption, (43 of 1961.) assessment or benefit shall continue to have effect in relation to the company in which the undertaking of that corporation has, vested.

3.(2) Where any payment made by a corporation is exempt from deduction of the tax at source under any provision of the Income-tax
(43 of 1961.) Act, 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 (43 of 1961.) of section 3 shall not be construed as a transfer within the meaning of the Income-tax Act, 1961 for the purposes of capital gains.

7.Guarantee to be operative.

7. Guarantee to be operative. 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.

8.Provisions in respect of officers and other employees of corporations.

8. Provisions in respect of officers and other employees of corporations. (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-section (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 com-

4.pany 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 or in any other law for the time being in force or in the (1 of 1956.) 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.

9.Power of Central Government to give directions.

9. Power of Central Government to give directions. 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.

10.Power to remove difficulties.

10. Power to remove difficulties. (1) If any difficulty arises in giving effect to the provision 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 Art.

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

11.Repeal of Act 27 of 1953 and cesser of corporation.

11. Repeal of Act 27 of 1953 and cesser of corporation. (1) On the appointed day, the Air Corporations Act, 1953 hall stand repealed.

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

12.Repeal and saving.

12. Repeal and saving. (1) The Air Corporations (Transfer of
Undertakings and Repeal) Ordinance, 1994 is hereby repealed. (Ord.4 of
1994.)

5.(2) Notwithstanding such repeal of the Air Corporations
(Transfer of Undertakings and Repeal) Ordinance, 1994, anything clone or any ( Ord. 4 of 1994.) action taken under the said Ordinance shall be deemed to have been done or taken under the corresponding provisions of this Act.

THE AIR CORPORATIONS ACT, 1953

An Act to provide for the establishment of Air Corporations, to facilitate the acquisition by the Air Corporations of undertakings belonging to certain existing air companies and generally to make further and better provisions for the operation of air transport services.

CHAPTER I

PRELIMINARY

 

 

1.Short title and commencement.

1. Short title and commencement. (1) This Act may be called the
Air Corporations Act, 1953.(2) It shall come into force on such date 2* as the Central
Government may, by notification in the Official Gazette, appoint.

2.Definitions.

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

(i) “aircraft” means any machine which can derive support in the atmosphere from reactions of the air and includes balloons, whether fixed or free, airships, kites, gliders and flying machines;

(ii) “air transport service” means a service for the transport by air of persons, mails or any other thing, animate or inanimate, for any kind of remuneration whatsoever, whether such service consists of a single flight or a series of flights;

(iii) “associate” in relation to either of the Corporations means any subsidiary of the Corporation or any person with whom the Corporation has made an agreement in accordance with clause (h) of sub-section (2) of section 7;

(iv) “Corporations” means “Indian Airlines” and “Air-India
International” established under section 3, and
“Corporation” means either of the Corporations;

(v) the expression “existing air companies” means the Air
India Ltd., the Air Services of India Ltd., the Airways
———————————————————————
1 This Act was extended and brought into force in Goa, Daman and
Diu with modifications, by Reg. 12 of 1962, s. 3 and Sch., Pondicherry on 1-10-1963, vide Reg. 7 of 1963, s. 3 and Sch. I and Dadra and Nagar
Haveli on 1-7-1965 by Reg. 6 of 1963, s. 2 and Sch. I.
2 28th May, 1953, vide Notification No. S.R.O. 968A, dated the 28th
May, 1953, Gazette of India, 1953, Extraordinary, Part II, Sec. 3, p.
1762A.

24.(India) Ltd., the Bharat Airways Ltd., the Deccan
Airways Ltd., the Himalayan Aviation Ltd., the Indian
National Airways Ltd., the Kalinga Airlines and the
Air-India International Ltd., and “existing air company” means any of the existing air companies;

(vi) “prescribed” means prescribed by rules made under this
Act;

(vii) “regulations” means regulations made by either of the
Corporations under section 45;

(viii) “scheduled air transport service” means an air transport service undertaken between the same two or more places and operated according to a published time table or with flights so regular or frequent that they constitute a recognisably systematic series, each flight being open to use by members of the public;

(ix) “Tribunal” means the Tribunal constituted under section
25.

CHAPTER II

CONSTITUTION AND FUNCTIONS OF THE CORPORATIONS


3. Incorporation of the Corporations. (1) With effect from such date as the Central Government may, by notification 1* in the Official
Gazette, appoint, there shall be established two Corporations to be known as “Indian Airlines” and “Air-India International” 2*.

 

(2) Each of the Corporations aforesaid shall be a body corporate having perpetual succession and a common seal with power, subject to the provisions of this Act, to acquire and hold property, and may by its name sue and be sued.

4.Constitution of the Corporations.

4. Constitution of the Corporations. 3*[(1) The general superintendence, direction and management of the affairs and business of each of the Corporations shall vest in a Board of directors which may exercise all such powers and do all such acts and things as may be exercised or done by the Corporation under this Act.
———————————————————————
1 See S.R.O. 1125, dated 12th June, 1953, Gazette of India, Extraordinary, Pt. II, Sec. 3, p. 1935.2 Renamed as “Air India” w.e.f. 8th June, 1962, vide Notification
No. S.O. 1676, dated 23rd May, 1962, Gazette of India, 1962, Pt. II, Sec. 3(ii), p. 2019,
3 Subs. by Act 49 of 1971, s. 2, for sub-section (1) (w.e.f. 1-2-
1972).

25.(1A) The Board of directors shall consist of a Chairman to be appointed by the Central Government, and not less than eight and not more than fourteen other directors to be appointed by the Central
Government and the Chairman or any other director may be required to render whole-time or part-time service as the Central Government may direct:

Provided that–

(a) the same person may be appointed to be the Chairman of both the Corporations or Chairman of one and director of the other;

(b) the same persons may be appointed to be directors of both the Corporations.]

(2) Before appointing a person to be a 1*[director] of either of the Corporations, the Central Government shall satisfy itself that person will have no such financial or other interest as is likely to affect prejudicially the exercise or performance by him of his functions as a 1*[director] of the Corporation and the Central
Government shall also satisfy itself from time to time with respect to every 1*[director] of the Corporation that he has no such interest;
and any person who is, or whom the Central Government proposes to appoint and who has consented to be a 1*[director] of the Corporation shall, whenever required by the Central Government so to do, furnish to it such information as the Central Government considers necessary for the performance of its duties under this sub-section.

(3) A 1*[director] of either of the Corporations who is in any way directly or indirectly interested in a contract made or proposed to be made by the Corporation, or in any contract made or proposed to be made by an associate of the Corporation which is brought up for consideration by the Corporation, shall, as soon as possible after the relevant circumstances have come to his knowledge, disclose the nature of his interest at a meeting of the Corporation; and the disclosure shall be recorded in the minutes of the Corporation, and the
1*[director] shall not take any part after the disclosure in any deliberation or decision of the Corporation with respect to that contract.

(4) During the temporary absence of the Chairman of either of the
Corporations, the Central Government may appoint another person, whether a 1*[director] of the Corporation or not, to act as the
Chairman.
———————————————————————
1 Subs. by Act 49 of 1971, s. 2, for “member” (w.e.f. 1-2-1972).

26.(5) Save as otherwise provided in this section, nothing contained in this Act shall be deemed to disqualify the 1*[managing director] of either of the Corporations from being appointed to be a 2*[director]
thereof.

5.Conditions of service of directors.

5. Conditions of service of directors. (1) The Chairman and other
3*[directors] of each of the Corporations shall ordinarily be entitled to hold office for the period specified in the order of appointment, unless the appointment is terminated earlier by the Central
Government:

Provided that any 4*[director] may at any time by notice in writing addressed to the Central Government resign his office.

(2) Subject to the previous approval of the Central Government, each of the Corporations shall pay to every 4*[director] thereof in respect of his office as such, 5*[such remuneration by way of salary, allowances,] fees or otherwise as may be determined by the
Corporation, and to the Chairman in respect of his office as such, such remuneration, whether in addition to the remuneration to which he may be entitled in respect of his office as a 4*[director] or otherwise, as it may similarly determine.

6.Vacancy in Corporation not to invalidate proceedings.

6. Vacancy in Corporation not to invalidate proceedings. No act or proceeding of either of the Corporations shall be deemed to be invalid by reason merely of any vacancy in, or any defect in the constitution of, the Corporation.

7.Functions of the Corporations.

7. Functions of the Corporations. (1) Subject to the rules, if any, made by the Central Government in this behalf, it shall be the function of each of the Corporations to provide safe, efficient, adequate, economical and properly co-ordinated air transport services, whether internal or international, or both, and the Corporations shall so exercise their powers as to secure that the air transport services are developed to the best advantage and, in particular, so exercise those powers as to secure that the services are provided at reasonable charges.

(2) Without prejudice to the generality of the powers conferred by sub-section (1), each of the Corporations shall, in particular, have power–

(a) to operate any air transport service, or any flight by aircraft for the commercial or other purpose, and to carry out all forms of aerial work;
———————————————————————
1 Subs. by Act 49 of 1971, s. 2 for “General Manager” (w.e.f. 1-2-
1972).
2 Subs. by s. 2, ibid., for “member” (w.e.f. 1-2-1972).
3 Subs. by s. 3, ibid., for “members” (w.e.f. 1-2-1972).
4 Subs. by s. 3, ibid., for “member” (w.e.f. 1-2-1972).
5 Subs. by s. 3, ibid., for certain words (w.e.f. 1-2-1972).

27.(b) to provide for the instruction and training in matters connected with aircraft or flight by aircraft of persons employed, or desirous of being employed, either by the Corporation or by any other person;

(c) with the previous approval of the Central Government, to promote any organization outside India for the purpose of engaging in any activity of a kind which the
Corporation has power to carry on;

(d) to acquire, hold or dispose of any property, whether movable or immovable, or any air transport undertaking;

(e) to repair, overhaul, reconstruct, assemble or recondition aircraft, vehicles or other machines and parts, accessories and instruments thereof or therefor and also to manufacture such parts, accessories and instruments, whether the aircraft, vehicles or other machines are owned by the Corporation or by any other person;

(f) to enter into and perform all such contracts as are calculated to further the efficient performance of its duties and the exercise of its powers under this Act;

(g) to perform any functions as agent or contractor in relation to an air transport service operated by any other person;

(h) with the previous approval of the Central Government, to enter into agreements with any person engaged in air transporation with a view to enabling such person to provide air transport services on behalf of or in association with the Corporation;

(i) with the previous approval of the Central Government, to determine and levy fares and freight rates and other charges for or in respect of the carriage of passengers and goods on air transport services operated by it;

1*[(ii) to make such grants as it thinks fit as contribution or donation, in furtherance of the interests of the
Corporation, to any fund established for a benevolent or charitable purpose:

Provided that nothing in this clause shall be construed as empowering the Corporation to make any such grant to any political party or for any political purpose to any individual or body;]
———————————————————————
1 Ins. by Act 49 of 1971, s. 4 (w.e.f. 1-2-1972).

28.(j) to take such steps as are calculated to extend the air transport services provided by the Corporation, whether within or without India, including the development of feeder services and the improvement of the types of aircraft used in air transport services;

(k) to take such steps as are calculated to promote the interests of the Corporation or to improve the services the Corporation may provide, 1*[including provision of catering, hotels, restaurants, rest-rooms], goods-
sheds, warehouses and transport by land or water in connection with any air transport service or any other amenity or facility;

2*[(kk) to form one or more companies under the Companies
Act, 1956 (1 of 1956) to further the efficient performance of its duties and the exercise of its powers under this Act:

Provided that the paid-up share capital of every company so formed shall be held exclusively by the Corporation;]

(l) to take all such steps as may be necessary or convenient for, or may be incidental to, the exercise of any power, or the discharge of any function or duty conferred or imposed on it by this Act.

(3) Nothing contained in this section shall be construed as–

(a) authorising the disregard by the Corporation of any law for the time being in force, or

(b) authorising any person to institute any proceeding in respect of a duty or liability to which either of the
Corporations or its employees would not otherwise be subject.

8.Appointment of officers and other employees of the Corporations.

8. Appointment of officers and other employees of the
Corporations. (1) For the purpose of enabling it efficiently to discharge its functions under this Act, each of the Corporations shall appoint a 3*[managing director] and, subject to such rules as may be prescribed in this behalf, may also appoint such number of other officers and employees as it may think necessary:

Provided that the appointment of the 3*[managing director] and such other categories of officers as may be specified after consultation
———————————————————————
1 Subs. by Act 49 of 1971, s. 4, for certain words (w.e.f. 1-2-
1972).
2 Ins. by s. 4, ibid., (w.e.f. 19-5-1971).
3 Subs. by s. 5 ibid., for “General Manager” (w.e.f. 1-2-1972).

29.with the Chairman in such rules shall be subject to the approval of the Central Government.

(2) Subject to the provisions of section 20, every person employed by each of the Corporations shall be subject to such conditions of service and shall be entitled to such remuneration and privileges as may be determined by regulations made by the Corporation by which he is employed.

(3) Neither the 1*[managing director] nor such other employee of either of the Corporations as may be specified in this behalf by the
Central Government shall, during his service in the Corporation, be employed in any capacity whatsoever or directly or indirectly have any interest in any air transport undertaking other than an undertaking of either of the Corporations, or in any other undertaking which is interested in any contract with either of the Corporations.

9.Corporation to act on business principles.

9. Corporation to act on business principles. In carrying out any of the duties vested in it by this Act, each of the Corporations shall act so far as may be on business principles.

CHAPTER III

FINANCE, ACCOUNTS AND AUDIT

10. Capital of the Corporations. (1) All non-recurring expenditure incurred by the Central Government for, or in connection with, each of the Corporations up to the date of establishment of that
Corporation and declared to be capital expenditure by that Government, shall be treated as capital provided by the Central Government to that
Corporation.

(2) The Central Government may provide any further capital that may be required by either of the Corporations for the carrying on of the business of the Corporation or for any purpose connected therewith on such terms and conditions as the Central Government may determine.

(3) Each of the Corporations may, with the consent of the Central
Government, or in accordance with the terms of any general authority given to it by the Central Government–

(a) borrow money for all or any of the purposes of the
Corporation, and

(b) secure the payment of any money borrowed by it or any interest thereon by the issue of bonds, debentures,
———————————————————————
1 Subs. by Act 49 of 1971, s. 5, for “General Manager” (w.e.f. 1-2-
1972).

30

debenture-stock or any mortgage or charge or other security on the undertaking of the Corporation or any part of it or on any of its properties.

11.Vesting of properties in the Corporations.

11. Vesting of properties in the Corporations. All properties, assets and funds owned or acquired by the Central Government for the purpose of Indian Airlines or, as the case may be, Air-India
International before the establishment of those Corporations shall, on such establishment, vest in the Corporation concerned.

12.Funds of the Corporations.

12. Funds of the Corporations. (1) Each of the Corporations shall have its own funds and all receipts of the Corporation shall be carried thereto and all payments for the Corporation shall be made therefrom.

(2) Each of the Corporations may keep in 1*[account] with any scheduled bank as defined in section 2 of the Reserve Bank of India
Act, 1934, (2 of 1934) or in any other bank approved by the Central
Government in this behalf a sum of money not exceeding such amount as may be prescribed, but any moneys in excess of the said sum shall be deposited in the Reserve Bank of India or with the agents of the
Reserve Bank of India or invested in such manner as may be approved by the Central Government.

13.Powers of the Corporations in regard to expenditure.

13. Powers of the Corporations in regard to expenditure. Each of the Corporations shall have power, subject to the provisions of this
Act, to spend such sums as it thinks fit on objects or for purposes authorised by this Act and such sum shall be treated as expenditure out of the funds of that Corporation.

14.Corporation to assume obligations of Central Government in respect ofcertain matters.

14. Corporation to assume obligations of Central Government in respect of certain matters. All obligations incurred, all contracts entered into and all matters and things engaged to be done by, with, or for the Central Government for any of the purposes of this Act before the establishment of either of the Corporations shall be deemed to have been incurred, entered into or engaged to be done by, with or for Indian Airlines or, as the case may be, Air-India International according as the obligations, contracts, matters and things relate to the purposes of the former Corporation or the latter.

15.Accounts and audit.

15. Accounts and audit. (1) The Corporations shall maintain proper accounts and other relevant records and prepare an annual statement of accounts, including the profit and loss account and the balance-sheet in such
———————————————————————
1 Subs. by Act 49 of 1971, s. 6, for “current account” (w.e.f. 1-2-
1972).

31.form as may be prescribed by the Central Government in consultation with the Comptroller and Auditor-General of India.

(2) The accounts of the Corporations shall be audited annually by the Comptroller and Auditor-General of India and any expenditure incurred by him in connection with such audit shall be payable by the
Corporations to the Comptroller and Auditor-General of India.

(3) The Comptroller and Auditor-General of India and any person appointed by him in connection with the audit of the accounts of the
Corporations shall have the same rights and privileges and authority in connection with such audit as the Comptroller and Auditor-General has in connection with the audit of Government accounts and, in particular, shall have the right to demand the production of books, accounts, connected vouchers and other documents and papers and to inspect any of the offices of the Corporations.

(4) The accounts of the Corporations as certified by the
Comptroller and Auditor-General of India or any other person appointed by him in this behalf together with the audit report thereon shall be forwarded annually to the Central Government and that Government shall cause the same to be laid before both Houses of Parliament.

15A.

Audit of accounts of companies formed by Corporations.

1*[15A. Audit of accounts of companies formed by Corporations.
(1) Notwithstanding anything contained in the Companies Act, 1956 (1.of 1956), the auditor of any company formed by either of the
Corporations under clause (kk) of sub-section (2) of section 7 shall be appointed or re- appointed by the Corporation concerned on the advice of the Comptroller and Auditor-General of India.

(2) Save as otherwise provided in sub-section (1), in addition to the provisions contained in the Companies Act, 1956 (1 of 1956), relating to the audit of the accounts of any company, the following provisions shall apply to the audit of the accounts of any company referred to in sub-section (1), namely:–

(i) the Comptroller and Auditor-General of India shall have power to conduct a supplementary or test audit of the companys accounts by such person or persons as he may, authorise in this behalf; and for the purposes of such audit to require information to be furnished to any person or persons so authorised, on such matters, by
———————————————————————
1 Ins. by Act 49 of 1971, s. 7 (w.e.f. 1-2-1972).

32.such person or persons and in such form as the
Comptroller and Auditor-General may, by general or special order, direct;

(ii) the auditor appointed or re-appointed under sub-section
(1) shall submit a copy of his audit report to the
Comptroller and Auditor-General of India who shall have the right to comment upon, or supplement, the audit report in such manner as he may think fit;

(iii) any such comments upon, or supplement to, the audit, report shall be placed before the annual general meeting of the company at the same time and in the same manner as the audit report.]

10. Capital of the Corporations. (1) All non-recurring expenditure incurred by the Central Government for, or in connection with, each of the Corporations up to the date of establishment of that
Corporation and declared to be capital expenditure by that Government, shall be treated as capital provided by the Central Government to that
Corporation.

(2) The Central Government may provide any further capital that may be required by either of the Corporations for the carrying on of the business of the Corporation or for any purpose connected therewith on such terms and conditions as the Central Government may determine.

(3) Each of the Corporations may, with the consent of the Central
Government, or in accordance with the terms of any general authority given to it by the Central Government–

(a) borrow money for all or any of the purposes of the
Corporation, and

(b) secure the payment of any money borrowed by it or any interest thereon by the issue of bonds, debentures,
———————————————————————
1 Subs. by Act 49 of 1971, s. 5, for “General Manager” (w.e.f. 1-2-
1972).

30

debenture-stock or any mortgage or charge or other security on the undertaking of the Corporation or any part of it or on any of its properties.

11.Vesting of properties in the Corporations.

11. Vesting of properties in the Corporations. All properties, assets and funds owned or acquired by the Central Government for the purpose of Indian Airlines or, as the case may be, Air-India
International before the establishment of those Corporations shall, on such establishment, vest in the Corporation concerned.

12.Funds of the Corporations.

12. Funds of the Corporations. (1) Each of the Corporations shall have its own funds and all receipts of the Corporation shall be carried thereto and all payments for the Corporation shall be made therefrom.

(2) Each of the Corporations may keep in 1*[account] with any scheduled bank as defined in section 2 of the Reserve Bank of India
Act, 1934, (2 of 1934) or in any other bank approved by the Central
Government in this behalf a sum of money not exceeding such amount as may be prescribed, but any moneys in excess of the said sum shall be deposited in the Reserve Bank of India or with the agents of the
Reserve Bank of India or invested in such manner as may be approved by the Central Government.

13.Powers of the Corporations in regard to expenditure.

13. Powers of the Corporations in regard to expenditure. Each of the Corporations shall have power, subject to the provisions of this
Act, to spend such sums as it thinks fit on objects or for purposes authorised by this Act and such sum shall be treated as expenditure out of the funds of that Corporation.

14.Corporation to assume obligations of Central Government in respect ofcertain matters.

14. Corporation to assume obligations of Central Government in respect of certain matters. All obligations incurred, all contracts entered into and all matters and things engaged to be done by, with, or for the Central Government for any of the purposes of this Act before the establishment of either of the Corporations shall be deemed to have been incurred, entered into or engaged to be done by, with or for Indian Airlines or, as the case may be, Air-India International according as the obligations, contracts, matters and things relate to the purposes of the former Corporation or the latter.

15.Accounts and audit.

15. Accounts and audit. (1) The Corporations shall maintain proper accounts and other relevant records and prepare an annual statement of accounts, including the profit and loss account and the balance-sheet in such
———————————————————————
1 Subs. by Act 49 of 1971, s. 6, for “current account” (w.e.f. 1-2-
1972).

31.form as may be prescribed by the Central Government in consultation with the Comptroller and Auditor-General of India.

(2) The accounts of the Corporations shall be audited annually by the Comptroller and Auditor-General of India and any expenditure incurred by him in connection with such audit shall be payable by the
Corporations to the Comptroller and Auditor-General of India.

(3) The Comptroller and Auditor-General of India and any person appointed by him in connection with the audit of the accounts of the
Corporations shall have the same rights and privileges and authority in connection with such audit as the Comptroller and Auditor-General has in connection with the audit of Government accounts and, in particular, shall have the right to demand the production of books, accounts, connected vouchers and other documents and papers and to inspect any of the offices of the Corporations.

(4) The accounts of the Corporations as certified by the
Comptroller and Auditor-General of India or any other person appointed by him in this behalf together with the audit report thereon shall be forwarded annually to the Central Government and that Government shall cause the same to be laid before both Houses of Parliament.

15A.

Audit of accounts of companies formed by Corporations.

1*[15A. Audit of accounts of companies formed by Corporations.
(1) Notwithstanding anything contained in the Companies Act, 1956 (1.of 1956), the auditor of any company formed by either of the
Corporations under clause (kk) of sub-section (2) of section 7 shall be appointed or re- appointed by the Corporation concerned on the advice of the Comptroller and Auditor-General of India.

(2) Save as otherwise provided in sub-section (1), in addition to the provisions contained in the Companies Act, 1956 (1 of 1956), relating to the audit of the accounts of any company, the following provisions shall apply to the audit of the accounts of any company referred to in sub-section (1), namely:–

(i) the Comptroller and Auditor-General of India shall have power to conduct a supplementary or test audit of the companys accounts by such person or persons as he may, authorise in this behalf; and for the purposes of such audit to require information to be furnished to any person or persons so authorised, on such matters, by
———————————————————————
1 Ins. by Act 49 of 1971, s. 7 (w.e.f. 1-2-1972).

CHAPTER IV

ACQUISITION OF UNDERTAKINGS OF EXISTING AIR COMPANIES

16. Undertakings of existing air companies to vest in the
Corporation. On such date 1* as the Central Government may, by notification in the Official Gazette, appoint (hereinafter referred to as “the appointed date”), there shall be transferred to and vest in–

(a) Indian Airlines, the undertakings of all the existing air companies (other than Air India International
Ltd.), and

(b) Air-India International, the undertaking of the Air
India International Ltd.

17.General effect of vesting of undertakings in the Corporations.

17. General effect of vesting of undertakings in the
Corporations. (1) The undertaking of each of the existing air companies which is transferred to and which vests in either of the
Corporations under section 16 shall, subject to the provisions of section 22, be deemed to include all assets, rights, powers, authorities and privileges and all property, movable and immovable, including lands, works, workshops, aircraft, cash balances, reserve funds, investments and book debts and all other reghts and interest arising out of such property as were immediately before the appointed date in the ownership, possession or power of the existing air company in relation to the undertaking, whether within or without India, and all books of account and documents relating thereto, and, subject to the provisions contained in section 22, shall also be deemed to include all borrowings, liabilities and obligations of whatever kind then subsisting of the existing air company in relation to the undertaking.
———————————————————————
1 1st August, 1953, vide Notification No. S.R.O. 1262, dated the
23rd June, 1953, Gazette of India, Pt. II, Sec. 3, p. 931.33.(2) Any lands, works, aircraft, assets or other property vesting in the Corporation under sub-section (1) shall by force of such vesting be freed and discharged from all trusts, obligations, mortgages, charges, lines and other encumbrances affecting it, and any attachment, injunction or any other order of a court restricting the use of such property in any manner shall be deemed to have been withdrawn.

(3) Subject to the other provisions contained in this Act, all contracts and working arrangements which are subsisting immediately before the appointed date and affecting any of the existing air companies shall, in so far as they relate to the undertaking of that company, cease to have effect or be enforceable against that company or any person who was surety or had guaranteed the performance thereof, and shall be of as full force and effect against or in favour of the Corporation in which the undertaking has vested by virtue of this Act and enforceable as fully and effectually as if, instead of the company, the Corporation had been named therein or had been a party thereto.

(4) Subject to the other provisions contained in this Act, any proceeding or cause of action pending or existing immediately before the appointed date by or against any of the existing air companies in relation to its undertaking may as from that date be continued and enforced by or against the Corporation in which it has vested by virtue of this Act as it might have been enforced by or against that company if this Act had not been passed, and shall cease to be enforceable by or against that company, its surety or guarantor.

18.Reservation of Scheduled air traunsport services to the corporations.

18. Reservation of Scheduled air traunsport services to the corporations. (1) After the appointed date, it shall not be lawful for any person other than the Corporations or their associates to operate any scheduled air transport service from, to, in or across
India:

Provided that nothing in this section shall restrict the right of any person–

(a) for the purpose of any air transport undertaking of which principal place of business is in any country outside India, to operate an air transport service in accordance with the terms of any agreement for the time being in force between the Government of India and the
Government of that country; or

(b) to carry passengers for the sole purpose of instructing them in flying or on duties of aircrews; or

34.(c) to carry passengers or goods for the sole purpose of providing an air ambulance service or a rescue or relief service during any natural calamity; or

(d) to carry passengers or goods for the sole purpose of providing joy rides consisting of flights operated from and to the same aerodrome or place without any intermediate landing or for the purpose of aerial survey, fire fighting, crop-dusting, locust control or any other aerial work of a similar nature; 1*[or]

1*[(e) to operate, with the previous permission of the
Central Government for such period and subject to such terms and conditions as that Government may determine, any scheduled air transport service as aforesaid which is not provided by either of the Corporations or their associates.]

(2) Any person who operates a scheduled air transport service in contravention of the provisions of this section shall be liable in respect of each offence to a fine which may extend to one thousand rupees, or to imprisonment which may extend to three months, or to both.

Explanation.–The operation of each flight shall constitute a separate offence for the purposes of this section.

19.Licences to cease to be valid.

19. Licences to cease to be valid. With effect from the appointed date, all licences granted under the Indian Aircraft Act, 1934 (22 of
1934) or under the rules made thereunder for the operation of scheduled air transport services shall cease to be valid.

20.Provision respecting officers and employees of existing air companies.

20. Provision respecting officers and employees of existing air companies. (1) Every officer or other employee of an existing air company (except a director, managing agent, manager or any other person entitled to manage the whole or a substantial part of the business and affairs of the company under a special agreement)
employed by that company prior to the first day of July, 1952, and still in its employment immediately before the appointed date 2*
shall, in so far as such officer or other employee is employed in connection with the undertaking which has vested in either of the
Corporations by virtue of this Act, become as from the appointed date an officer or other employee, as the case may be, of the Corporation in which the undertaking has vested and shall hold his office or service therein by the same tenure, at the same remuneration and upon the same terms and
———————————————————————
1 Ins. by Act 17 of 1962, s. 2.2 10th July, 1953, vide Notification No. S.R.O. 1170, dated 15th
June, 1953, Gazette of India, 1953, Part-II, Sec. 3, p. 882.35.conditions and with the same rights and privileges as to pension and gratuity and other matters as he would have held the same under the existing air company if its undertaking had not vested in the
Corporation and shall continue to do so unless and until his employment in the Corporation is terminated or until his remuneration, terms or conditions are duly altered by the Corporation:

Provided that nothing contained in this section shall apply to any officer or other employee who has, by notice in writing given to the Corporation concerned prior to such date as may be fixed by the
Central Government by notification in the Official Gazette, intimated his intention of not becoming an officer or other employee of the
Corporation.

(2) Notwithstanding anything contained in sub-section (1), the
Central Government may direct either of the Corporations in which the undertaking of any existing air company has vested to take into its employment any officer or other employee who was employed

37.by the existing air company prior to the first day of July, 1952, and who has been discharged from service in that company on or after the said date for reasons which, in the opinion of the Central Government, appear to be inadequate for the purpose, and where the Central
Government issues any such direction, the provisions of sub-section
(1) shall apply to such officer or other employee as they apply to any officer or other employee referred to therein.

(3) As from the appointed date the trustees of the provident funds and pension funds or pension schemes of each of the existing air companies shall transfer to the Corporation concerned the balances lying to the credit of each of the employees whose services have been transferred to that Corporation by virtue of this Act and also all other balances of the funds or schemes as shall remain after satisfying all demands and liabilities, and thereupon the trustees shall be discharged of the trusts by virtue of this Act.

(4) Notwithstanding anything contained in this Act or in the
Indian Companies Act, 1913 (7 of 1913) or in any other law for the time being in force or in any agreement entered into by an existing air company or in the articles of association of any such company, no director, managing agent, manager or any other person entitled to manage the whole or a substantial part of the business and affairs of the company shall be entitled to any compensation against any existing air company or against either of the Corporations for the loss of office or for the premature termination of any contract of management entered into by him with any existing air company and where any existing air company has, after the first day of July, 1952, and before the commencement of this Act, paid to any such person as is referred to in this sub-section any sum by way of compensation to which the person receiving such compensation would not have been entitled if this sub-section were in force at the time of such payment, the existing air company shall be entitled to claim refund of any sum so paid.

21.Duty to deliver up possession of property acquired and documentsrelating thereto.

21. Duty to deliver up possession of property acquired and documents relating thereto. (1) Where any property has vested in either of the Corporations under section 16, every person in whose possession or custody or under, whose control the property may be, shall deliver up the property to the Corporation concerned forthwith.

(2) Any person who on the appointed date has in his possession or under his control any books, documents or papers relating to any undertaking which has vested in either of the Corporations under this
Act and which belong to an existing air company or would have so belonged if its undertaking had not so vested shall be liable to account

38.for the said books, documents and papers to the Corporation in which the undertaking has vested and shall deliver them up to the
Corporation or to such person as the Corporation may direct:

Provided that the Corporation shall produce for inspection by such companies or their authorized representatives the books of account and documents as relate to the affairs of the company for any period prior to the appointed date.

(3) Without prejudice to the other provisions contained in this section, it shall be lawful for the Corporation and the Central
Government to take all necessary steps for securing possession of all properties which have vested in the Corporation under section 16.22.Duty of existing air companies to supply particulars.

22. Duty of existing air companies to supply particulars. (1)
Where the undertaking of an existing air company vests in either of the Corporations under this Act, the existing air company shall, within thirty days from the appointed date or within such further time as the Corporation concerned may allow in any case, supply to the
Corporation particulars of book debts and investments belonging to and all liabilities and obligations of the company subsisting immediately before the appointed date, and also of all agreements entered into by the existing air company and in force on the appointed date, including agreements, whether express or implied, relating to leave, pension, gratuity and other terms of service of any officer or other employee of the existing air company, under which by virtue of this Act the
Corporations have or will or may have liabilities except such agreements as the Corporation may exclude either generally or in any particular case from the operation of this sub-section.

(2) If any existing air company fails to supply to the
Corporation concerned particulars of such book debts, liabilities and agreements within the time allowed to it for the purpose under sub-
section (1), nothing contained in this Act shall have effect so as to transfer any such book debts, liabilities and agreements to or to vest the same in the Corporation.

(3) Either Corporation may be notice in writing within a period of 1*[six months] after submission of the particulars referred to in sub-section (1) intimate to the existing air company submitting the particulars that such of the book debts and investments as are specified in the notice are not included in the properties vesting in the Corporation whereupon the compensation provided by section 25 of
———————————————————————
1 Subs. by Act 10 of 1954, s. 2, for “ninety days” (w.e.f.
30-1-1954).

39.this Act and the Schedule thereto shall be reduced by the amount of such excluded book debts and investments but the right of such existing air company to recover and retain such excluded book debts shall remain unaffected by this Act.

23.Right of Corporations to disclaim certain agreements.

23. Right of Corporations to disclaim certain agreements. (1)
Where it appears to either of the Corporations that the making of any such agreements as is referred to in section 22 under which the
Corporation has or will have or may have liabilities was not reasonably necessary for the purposes of the activities of the existing air company or has not been entered into in good faith, the
Corporation may, within 1*[one year] from the appointed date, apply to the Tribunal for relief from such agreement, and the Tribunal, if satisfied after making such inquiry into the matter as it thinks fit that the agreement was not reasonably necessary for the purposes of the activities of the existing air company or has not been entered into in good faith, may make an order cancelling or varying the agreement on such terms as it may think fit to impose and the agreement shall thereupon have effect accordingly.

(2) All the parties to the agreement which is sought to be cancelled or varied under this section shall be made parties to the proceeding.

24.Transactions resulting in dissipation of assets.

24. Transactions resulting in dissipation of assets. (1) This section shall apply where any existing air company has, after the first day of July, 1952, and before the appointed date,–

(a) made any payment to any person without consideration or for an inadequate consideration;

(b) sold or disposed of any of its properties or rights without consideration or for an inadequate consideration;

(c) acquired any property or rights for an excessive consideration;

(d) entered into or varied any agreement so as to require an excessive consideration to be paid or given by the company;

(e) entered into any other transaction of such an onerous nature as to cause a loss to or impose a liability on the company exceeding any benefit accruing to the company; or

(f) sold or otherwise transferred any aircraft, equipment, machinery or other property of book value exceeding rupees ten thousand;
———————————————————————
1 Subs. by Act 10 of 1954, s. 3, for “six months” (w.e.f.
30-6-1953).

40

and the payment, sale, disposal, acquisition, agreement or variation thereof, or other transaction or transfer, was not reasonably necessary for the purposes of the company or was made with an unreasonable lack of prudence on the part of the company, regard being had in either case to the circumstances at the time.

(2) Either of the Corporations may, in the case of any such existing air company as is referred to in sub-section (1) the undertaking of which has vested in the Corporation under this Act, at any time within 1*[one year] from the appointed date, apply for relief to the Tribunal in respect of any transaction to which in the opinion of the Corporation this section applies, and all parties to the transaction shall, unless Tribunal otherwise directs, be made parties to the application.

(3) Where the Tribunal is satisfied that a transaction in respect of which an application is made is a transaction to which this section applies, then, unless the Tribunal is also satisfied that the transaction was a proper transaction made in the ordinary course of business regard being had to the circumstances at the time and was not in any way connected with any provision made by this Act or with any anticipation of the making of any such provision, the Tribunal shall make such order against any of the parties to the application as the
Tribunal thinks just having regard to the extent to which those parties were respectively responsible for the transaction or benefited from it and all the circumstances of the case.

(4) Where an application is made to the Tribunal under this section in respect of any transaction and the application is determined in favour of the Corporation, the Tribunal shall have exclusive jurisdiction to determine any claims outstanding in respect of the transaction.

25.Compensation to be given for compulsory acquisition of undertaking.

25. Compensation to be given for compulsory acquisition of undertaking. (1) Where the undertaking of any of the existing air companies has vested in either of the Corporations under this Act, compensation shall be given by the Corporation to that company in the manner specified in section 27 and the amount of such compensation shall be determined in accordance with the principles specified in the
Schedule to this Act.

(2) Notwithstanding that separate valuations are calculated under the principles specified in the Schedule in respect of the several matters referred to therein, the amount of compensation to be given shall be deemed to be a single compensation to be given for the undertaking as a whole.
———————————————————————
1 Subs. by Act 10 of 1954, s. 4, for “six months”.

41.(3) The amount of the compensation to be given in accordance with the aforesaid principles shall be determined by the Corporation and if the amount so determined is approved by the Central Government, it shall be offered to the existing air company in full satisfaction of the compensation payable under this Act, and if the amount so offered is not acceptable to the existing air company, it may within such time as may be prescribed for the purpose have the matter referred to a
Tribunal constituted for this purpose by the Central Government for decision.

26.Constitution of special Tribunal to determine compensation.

26. Constitution of special Tribunal to determine compensation.
(1) The Tribunal to be constituted under section 25 shall consist of three members appointed by the Central Government, one of whom shall be a person who is or has been a Judge of a High Court or has been a
Judge of the Supreme Court.

(2) The Tribunal may for the purpose of deciding any matter under this Act choose one or more persons possessing special knowledge of any matter relating to the case under inquiry to assist it in determining any compensation which is to be given under this Act.

(3) The Tribunal shall have the powers of a civil court while trying a suit under the Code of Civil Procedure, 1908 (5 of 1908) in respect of the following matters:–

(a) summoning and enforcing the attendance of any person and examining him on oath;

(b) requiring the discovery and production of documents;

(c) receiving evidence on affidavits;

(d) issuing commissions for the examination of witnesses or documents.

(4) The Tribunal shall by a majority of its number regulate its own procedure and decide any matter within its competence and may review its decision in the event of there being a mistake on the face of the record or correct any arithmetical or clerical error therein but subject thereto the decision of the Tribunal on any matter within its jurisdiction shall be final and shall not be called in question in any court.

27.Mode of giving compensation.

27. Mode of giving compensation. (1) When the amount of compensation to be given under this Act to an existing air company has been determined under section 25, the Corporation shall give to the company one or more bonds of the face value of the amount of compensation so determined less such portion thereof as is payable in cash under this section.

42.(2) Out of the compensation to be given to each of the existing air companies under this Act, there shall be paid in cash–

(a) ten per cent. of the amount of compensation payable to each of such companies (which percentage shall be uniformly applicable to all existing air companies); or

(b) the amount borrowed by any such company from any bank and outstanding on the 31st day of December, 1952, or on the appointed date, whichever amount is less; or

(c) an amount equal to the cash of any such company, including cash in deposit with a bank, which has vested in the Corporation under this Act;

whichever of the amount specified in clauses (a), (b) and (c) is the greatest.

(3) The bonds aforesaid shall be issued by the Corporation with the previous approval of the Central Government and shall be negotiable and shall be redeemed at their face value by the
Corporation concerned on the demand of the holder within one hundred and eighty days after the expiry of five years from the date of their issue and the redemption of the bonds and payment of all interest thereon shall be guaranteed by the Central Government.

(4) If within the expiry of the said period of one hundred and eighty days, the holder of any bond fails to require payment of its face value from the Corporation concerned, the bond shall cease to be redeemable at the option of the holder:

Provided that in any case the Corporation may by notice require the holder of the bond to accept its face value in cash at any time whether before or after the expiry of the period of five years aforementioned.

(5) The holder of the bond shall be entitled to receive from the
Corporation interest on the bond at three-and-a-half per cent. per annum at such intervals as may be prescribed, with effect from the appointed date and until the bond is duly redeemed.

(6) Bonds issued under this section shall, for the purpose of redemption and of computing interest, be deemed to have been issued on the appointed date.

(7) Any bond issued under the provisions of this section shall be deemed to be a security in which a trustee may invest trust moneys within the meaning of section 20 of the Indian Trusts Act, 1882. (2 of
1882).

43.28.Winding up of existing company whose undertaking has been acquired.

28. Winding up of existing company whose undertaking has been acquired. (1) The Central Government may, on the application of any existing air company or on the application of a majority in number representing three-fourths in value of its members holding ordinary shares, by order in writing, authorise the existing air company the undertaking of which has vested in either of the Corporations, to be wound up voluntarily in accordance with the provisions of the Indian
Companies Act, 1913 (7 of 1913) relating to voluntary winding up:

Provided that–

(a) the winding up of the company shall commence on the day on which the Central Government authorises the winding up without the passing by the company of any special or other resolution for winding up; and

(b) the directors of the existing company shall not be under an obligation to make any such statutory declaration as is required by section 207 of the Indian Companies Act,
1913; (7 of 1913) and

(c) the winding up of the company shall be continued by the directors of the existing company in office at the time the Central Government authorises its winding up and they shall be deemed to be joint liquidators for the purpose of the said winding up with power to act by a majority of their number.

(2) For the purposes of winding up the affairs of any existing air company or for any other purpose necessary for enabling it to give effect to the provisions of this Act, the Central Government may, notwithstanding anything contained in this Act, permit the existing air company to occupy, keep in its custody or utilise, as the case may be, for such period as it may allow any office, books, accounts and other documents and the services of any officers or other employees, which have been transferred to either of the Corporations under this
Act, on such terms and conditions as may be agreed between the
Corporation in which the undertaking has vested and the existing air company, or failing agreement, as may be determined by the Central
Government.

29.Authorisation under section 28 may contain certain directions.

29. Authorisation under section 28 may contain certain directions. Any authorisation granted under section 28 may include a direction requiring an existing air company the voluntary winding up of which has been authorised under that section to distribute its net assets among the various classes of members of the company in such proportion as the Central Government may, having regard to

44.the amount subscribed by each class of such members or having regard to the circumstances relating to the issue of the shares to the various classes of members, specify in the direction, and any such direction shall have effect notwithstanding anything contained in the
Indian Companies Act, 1913 (7 of 1913) or in the articles of association or resolution of the company or in any agreement, and every such company shall be bound to comply with any such direction.

CHAPTER V

AIR TRANSPORT COUNCIL

30. Constitution of Air Transport Council. 1*[(1)] 2*[The Central
Government may, from time to time, by notification in the Official
Gazette, constitute] an Air Transport Council consisting of a Chairman and such other number of members not exceeding eleven as the Central
Government may appoint thereto:

Provided that amongst the members to be so appointed there shall at least be one person with experience in financial matters and one person who is an employee of either of the Corporations with experience in labour matters.

3*[(2) If at any time the Central Government is of opinion that the continued existence of an Air Transport Council is not necessary, it may, by notification in the Official Gazette, declare that the Air
Transport Council shall be dissolved with effect from such date as may be specified in the notification, and thereupon the Air Transport
Council shall be deemed to be dissolved, accordingly.]

31.Functions of the Air Transport Council.

31. Functions of the Air Transport Council. (1) It shall be the duty of the Air Transport Council to consider–

(a) at the request of either of the Corporations any matter of the kind referred to in section 38; and

(b) any matter of importance which may be referred to it by the Director General of Civil Aviation or the Director
General of Posts and Telegraphs relating to matters of common interest, between either of the Corporations and the Director General of Civil Aviation, or as the case may be, the Director General of Posts, and Telegraphs,
———————————————————————
1 S. 30 re-numbered as sub-section (1) of that section by Act 17 of
1962, s. 3.2 Subs. by s. 3, ibid., for certain words.
3 Ins. by s. 3, ibid.

45.including rates for the carriage of postal articles by air, and to make recommendations thereon to the Central
Government.

(2) At the request of the Central Government, the Air Transport
Council shall investigate any matter relating to the fares, freight rates or other charges levied by either Corporation in respect of any service or facility provided by the Corporation and of the adequacy of efficiency of such service or facility and shall make recommendations thereon to the Central Government.

(3) The Council shall, if so required by the Central Government, tender advice to that Government in regard to financial and economic analysis, accounting, costing and statistical techniques and financial reporting relating to air transport and, in particular, advise in regard to the matters specified in the proviso to sub-section (2) of section 34.(4) The Central Government, after taking any recommendation made by the Air Transport Council under this section into consideration, may issue such directions in the matter as it thinks fit and such directions shall be binding on the Corporation concerned.

32.Staff of the Council.

32. Staff of the Council. The Council shall have a Secretary and such other employees as the Central Government may appoint, and the expenditure on the staff and other charges of the Council shall be borne by the Central Government.

33.Proceedings of the Council.

33. Proceedings of the Council. (1) The Council shall regulate its own procedure.

(2) No proceeding of the Council shall be deemed to be invalid by reason merely of any vacancy in, or any defect in the constitution of, the Council.

CHAPTER VI

CONTROL OF CENTRAL GOVERNMENT

34. Power of Central Government to give directions. (1) The
Central Government may give to either of the Corporations directions as to the exercise and performance by the Corporation of its functions, and the Corporation shall be bound to give effect to any such directions.

46.(2) The Central Government may, if it is of opinion that it is expedient in the national interest so to do, after consultation with the Corporation concerned, direct either of the Corporations–

(a) to undertake any air transport service or other activity which the Corporation has power to undertake;

(b) to discontinue or make any change in any scheduled air transport service or other activity which it is operating or carrying on;

(c) not to undertake any activity which it proposes to do:

Provided that, if, at the direction of the Central Government, the Corporation establishes, alters or continues to maintain an air transport service or other activity and satisfies the Central
Government that during the relevant financial year the Corporation has suffered an over-all loss in respect of the operation of all its air transport services and of all its other activities and also that the service or activity so established, altered or continued to be maintained in compliance with the directions of the Central Government as aforesaid has been operated at a loss in any financial year, then the Central Government shall reimburse the Corporation to the extent of the loss relatable to the operation of that particular service or activity.

35.Prior approval of central Government neccssary in certain cases.

35. Prior approval of central Government neccssary in certain cases. Neither Corporation shall, without the previous approval of the
Central Government–

(a) undertake any capital expenditure for the purchase or acquisition of any immovable property or aircraft or any other thing at a cost exceeding 1*[such amount as the Central Government may, from time to time, by order, fix in this behalf];

(b) enter into a lease of any immovable property for a period exceeding 2*[ten years]; or

(c) in any manner dispose of any property, right or privilege having an original or book value exceeding
1*[such amount as the Central Government may, from time to time, by order, fix in this behalf].

36.submission of programme of work for each year.

36. submission of programme of work for each year. (1) Each of the Corporations shall prepare and submit to the Central Government not less than 3*[two months] before the commencement of the financial year of the Corporation a statement showing the programme of operation and development of air transport services to be operated by the
Corporation and its associates during the forthcoming financial year and its other activities as well
———————————————————————
1 Subs. by Act 24 of 1982, s. 2.2 Subs. by s. 8, Act 49 of 1971, for “five years” (w.e.f.
1-2-1972).
3 Subs. by Act 17 of 1962, s. 4, for “three months”.

47.as its financial estimates in respect thereof, including any proposed investment of capital and increase in the strength of its total staff.

(2) If, during any financial year, either of the Corporations engages or proposes to engage in any air transport service or ancillary activity in addition to those specified in the programme previously submitted under sub-section (1) and a substantial alteration of the financial estimates is likely to be involved thereby, the Corporation shall submit to the Central Government for approval a supplementary programme of such service or activity and a supplementary estimate of the expenditure and revenue to be incurred and received by the Corporation in respect thereof during the remainder of that period:

Provided that, to meet any unexpected traffic demand or other special situation, either of the Corporations may undertake any additional service or other ancillary activity not specified in the programme submitted under sub-section (1) or sub-section (2) and subsequently submit a report on the matter to the Central Government in the prescribed manner.

37.Submission of Annual Reports to Parliament.

37. Submission of Annual Reports to Parliament. (1) Each of the
Corporations shall, as soon as may be after the end of each financial year prepare and submit to the Central Government in such form as may be prescribed a report giving an account of its activities during the previous financial year, and the report shall also give an account of the activities, if any, which are likely to be undertaken by the
Corporation during the next financial year.

(2) The Central Government shall cause every such report to be laid before both Houses of Parliament as soon as may be after it is submitted.

CHAPTER VII

MISCELLANEOUS

38. Corporations to act in mutual consultation. It shall be the duty of each of the Corporations to enter into consultations with the other in matters of common interest to the two Corporations including, in particular, the operation of scheduled air transport services, the routes on which such services should be operated by each of the
Corporations, the frequency of such services, the passenger fares and freight rates to be charged, the measures of economy to be adopted, the provision on any services in

48.regard to overhaul and maintenance of aircraft or any other matter falling within the scope of the functions of either of the
Corporations, and, generally, in regard to ensuring the fullest co-
operation and co-ordination in respect of all such matters.

39.Transfer of scheduled air transport services or assets from oneCorporation to the other.

39. Transfer of scheduled air transport services or assets from one Corporation to the other. The Central Government may, for the purpose of improving the air transport services provided by either of the Corporations or for effecting better co-ordination in respect of such services, direct that with effect from such date as may be specified in the direction and subject to such conditions as may be similarly specified,–

(a) any scheduled air transport service operated by one
Corporation shall no longer be operated by that
Corporation but shall be operated by the other
Corporation, and

(b) any property belonging to one Corporation shall be transferred to the other Corporation.

40.

Corporations may delegate their powers.

40. Corporations may delegate their powers. (1) Each of the
Corporations may appoint a Committee or Committees consisting of some or any of its 1*[directors] with or without the addition of any officer or employee of the Corporation and delegate any of the functions and powers of the Corporation to such Committee or
Committees and may limit the exercise of such delegated authority to any specified area.

(2) Either of the Corporations may, in relation to any particular matter or class of matters or to any particular area, by general or special order, direct that any of its officers or other employees may also exercise all or any of its powers under this Act (except the powers given to it by this section) to the extent to which the
Corporation deems it necessary for the efficient running of its day to day administration.

41.Advisory and Labour Relations Committees.

41. Advisory and Labour Relations Committees. 2* * *

2*** Each of the Corporations shall constitute in the prescribed manner a Labour Relations Committee consisting of representatives of the Corporation and of its employees, so however, that the number of representatives of the employees on the Committee shall not be less than the number of representatives of the Corporation, and it shall be the duty of the Labour Relations Committee to advise the
———————————————————————
1 Subs. by Act 49 of 1971, s. 9, for “members” (w.e.f. 1-2-1972).
2 Sub-section (1) and the brackets and figure “(2)” omitted by s.
10, ibid., (w.e.f. 1-2-1972).

49.Corporation on matters which relate to the welfare of the employees or which are likely to promote and secure amity and good relations between the two.

42.Meetings of the Corporation.

42. Meetings of the Corporation. (1) Meetings of the Corporation shall be held at such times and places and, subject to sub-section (2)
and (3), the proceedings of the Corporation shall be conducted in such manner as may be provided by the regulations.

(2) The Chairman or in his absence any person chosen by the
1*[directors] present from amongst themselves shall preside at the meeting.

(3) At a meeting of the Corporation all questions shall be decided by a majority of votes of the 1*[directors] present, and for this purpose, each 2*[director] shall have one vote and in the case of equality of votes the Chairman or, in his absence, the person presiding at the meeting shall have a second or casting vote.

43.Penalty for wrongful with holding of property.

43. Penalty for wrongful with holding of property. If a director, managing agent, manager or other officer or employee of an existing air company who wilfully withholds or fails to deliver to the
Corporation as required by sub-section (2) of section 21 any books, documents or papers which may be in his possession or who wrongfully obtains possession of any property of any such company which has vested in either of the Corporations under this Act or having any such property in his possession wrongfully withholds it from the
Corporation or wilfully applies it to purposes other than those expressed in, or authorised by, this Act shall, on the complaint of the Corporation concerned, be punishable with fine which may extend to one thousand rupees and may be ordered by the Court trying the offence to deliver up or refund within a time to be fixed by the Court any such property improperly obtained or wrongfully withheld or wilfully misapplied or in default to suffer imprisonment which may extend to one year.

44.Power to make rules.

44. Power to make rules. (1) The Central Government may, by notification in the Official Gazette, make rules to give effect to the provisions of this Act.
———————————————————————
1 Subs. by Act 49 of 1971, s. 11, for “members” (w.e.f. 1-2-1972).
2 Subs. by s. 11, ibid., for “member” (w.e.f. 1-2-1972).

50

(2) in particular, and without prejudice to the generality of the foregoing power, such rules may provide for an or any of the following matters, namely:–

(a) the terms and conditions of service of the 1*[managing directors] of the two Corporations; and such other categories or officers as may be specified from time to time under sub-section (1) of section 8;

(b) the form in which the budget of the two Corporations shall be prepared and submitted to the Central
Government; and the form and the manner in which the accounts of the two Corporations shall be maintained and in which any returns or statistics shall be furnished or submitted;

(c) the reports which should be submitted by the
Corporations and the intervals within which they should be so submitted;

(d) the maintenance of books of account;

(e) the establishment and maintenance of a fund by each of the Corporations for meeting any liability arising out of any act or omission in respect of which the
Corporation may incur any liability to any third party;

(f) the provision of 2*** reserve and other funds;

(g) the prohibition of persons who are directly or indirectly interested in any subsisting contract with either of the Corporations from becoming or being employees of the Corporation;

(h) the powers which may be exercised by either of the
Corporations to facilitate the acquisition of any undertaking;

(i) the issue of bonds by either of the Corporations to meet any compensation payable by it under this Act;

(j) the training of the employees of either of the
Corporations or other persons and the fees which may in its discretion be charged therefor;

(k) the term of office and other conditions of service of members of the Air Transport Council constituted under section 30;
———————————————————————
1 Subs. by Act 49 of 1971, s. 12, for “General Managers” (w.e.f. 1-
2-1972).
2 The word “depreciation”, omitted by s. 12, ibid. (w.e.f. 1-2-
1972).

51.(l) the prohibition of any interference with any air transport service or with any property of the
Corporation or of any interference with or obstruction of any officer or employee of the Corporation in the performance of his duty;

(m) the punishment which shall not exceed imprisonment for three months or fine of rupees one thousand but which may consist of both such imprisonment and fine, in respect of any contravention of the provisions of any rules made under this section.

1*[(3) Every rule made under this section shall be laid as soon as may be after it is made before each House of Parliament while it is in session for a total period of thirty days which may be comprised in one session or in 2*[two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid,] both Houses agree in making any modification in the rule or both Houses agree that the rule should not be made, the rule shall thereafter have effect only in such modified form or be no effect, as the case may be; so however that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule.]

45.Power of Corporations to make regulations.

45. Power of Corporations to make regulations. (1) 3*[Subject to the provisions of sub-section (3) each of the Corporations may], by notification in the Official Gazette, make regulations not inconsistent with this Act or the rules made thereunder for the administration of the affairs of the Corporation and for carrying out its functions.

(2) In particular and without prejudice to the generality of the foregoing power, any such regulations may provide for all or any of the following matters, namely:–

(a) the time and place of the meetings of Corporation and the procedure to be followed for the transaction of business at such meetings;

(b) the terms and conditions of service of officers and other employees of the Corporation other than the
4*[managing director] and officers of any other categories referred to in section 44;
———————————————————————
1 Subs. by Act 17 of 1962, s. 5, for sub-section (3).
2 Subs. by Act 24 of 1982, s. 3.3 Subs. by Act 49 of 1971, s. 13, for certain words (w.e.f. 1-2-
1979).
4 Subs. by s. 13, ibid., for “General Manager” (w.e.f. 1-2-1972).

52.(c) the issue of passes by the Corporation to its officers and other employees either free of cost or at concessional rates for travel on its air services and the conditions relating thereto;

(d) the authentication of orders and decisions of the
Corporation and the instruments executed by it;

1*[(e) the grant of refund in respect of any unused tickets and the issue of passes free of cost or at concessional rates;]

(f) the period after the expiry of which unclaimed goods may be disposed of and the manner of their disposal;

(g) the conditions governing the carriage of persons or goods on its services.

2*[(3) No regulation under clause (b) of sub-section (2) shall be made except with the previous approval of the Central Government.]

3*[(4) Every regulation made under this section shall be laid, as soon as may be after it is made, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the regulation or both Houses agree that the regulation should not be made, the regulation shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that regulation.]

SCHE

PRINCIPLES FOR DETERMINING COMPENSATION UNDER THIS ACT

THE SCHEDULE

(See section 25)

Paragraph I.–The compensation which shall be given by Indian
Airlines or Air-India International, as the case may be, to any existing air company in respect of the vesting, in accordance with the provisions of this Act, of the undertaking of such company in that
Corporation shall be the sum of the amounts computed in accordance with the provisions of paragraph II, less the sum of the amounts computed in accordance with the provisions of paragraph III.

Paragraph II.–(a) The aggregate written down value of all air-
frames of aircraft in respect of which there are certificates of airworthiness in force or which can be rendered fit for certificates of airworthiness if the Corporation concerned were to incur expenditure within the normal rates for rendering the airframes airworthy, plus–

A sum of Rs. 12,000 in respect of each airframe of a Dakota aircraft and a sum of Rs. 24,000 in respect of each airframe of a
Viking aircraft in any case where the existing air company had obtained a certificate of airworthiness in respect of it within ninety days
———————————————————————
1 Subs. by Act 17 of 1962, s. 6, for cl. (e).
2 Ins. by Act 49 of 1971, s. 13 (w.e.f. 1-2-1972).
3 Ins. by Act 24 of 1982, s. 4.52A

immediately preceding the appointed date or if a certificate of airworthiness had not actually been obtained within that period but the existing air company had incurred expenditure within that period for the purpose of rendering that airframe airworthy, the value of the spare parts used for the purpose subject to a maximum of Rs. 12,000 in the case of each airframe of a Dakota aircraft and Rs. 24,000 in the case of each airframe of a Viking aircraft.

Note.–In this Schedule, the expression “airframe” includes also the equipment of the aircraft, whether fixed or removable;

(b) the aggregate written down value of all such power plants, aero-engines, air screws, spare aero-engines, and spare air screws
(all of which are in this Schedule collectively referred to as power plants) as are suitable for use in the airframes mentioned in sub-
clause (a) and as are of an approved standard or can be rendered fit to be of an approved standard if the Corporation concerned were to incur expenditure within the normal rates for such purposes, plus the following, namely:–

(i) a sum of Rs. 6,000 in respect of each engine of a Dakota aircraft and a sum of Rs. 12,000 in respect of each engine of a Viking aircraft in any case where the existing air company had made it an approved engine within a period of ninety days immediately preceding the appointed date or if the engine had not been made completely fit to be an approved engine within that period but the existing air company had incurred expenditure within the said period for the purpose of making that engine an approved engine, then, the value of the spare parts used for that purpose subject to a maximum of Rs. 6,000 in the case of each engine of a
Dakota aircraft and Rs. 12,000 in the case of each engine of a Viking aircraft; and

(ii) a sum of Rs. 2,000 in respect of the air screws and accessories of the power plant of a Dakota aircraft and a sum of Rs. 4,000 in respect of the air screws and accessories of the power plant of a Viking aircraft in any case where the air screws and accessories had been rendered completely fit for the approved standard within a period of ninety days immediately preceding the appointed date or if the same had not been rendered completely fit for that standard within that period but the existing air company had incurred expenditure within that period for the

52B

purpose of rendering the same fit for the approved standard, then, the value of the spare parts used for that purpose subject to a maximum of Rs. 2,000 in the case of air screws and accessories of a Dakota aircraft and Rs. 4,000 in the case of air screws and accessories of a Viking aircraft.

Note.–In this Schedule, the expression “approved standard” means such condition of efficiency of the power plant as satisfies the requirements laid down in Section E of Schedule III to the Indian
Aircraft Rules, 1937;

(c) the cost of purchase of all serviceable general stores and all such other serviceable stores and spare parts (all of which are in this Schedule collectively referred to as stores and spare parts)
belonging to the existing air company as are suitable for use in respect of the aircraft or power plants referred to in sub-clauses (a)
and (b), reduced in each case by 20 per cent. of such cost of purchase:

53.Provided that the reduction shall be 10 per cent. in the case of stores and spare parts pertaining to Constellation and Skymaster aircraft.

Note.–In this Schedule–

(a) stores shall be deemed to be serviceable if they are such as to satisfy the requirements laid down in
Section E of Schedule III to the Indian Aircraft Rules,
1937;

(b) without prejudice to the clause immediately preceding, stores (other than general stores) and spare parts shall also be deemed to be serviceable if by incurring expenditure of an amount not exceeding half the cost of purchase of such stores and spare parts, they can be rendered suitable for use in respect of the aircraft or power plants;

(d) the aggregate actual cost to the existing air company of all lands other than lease-holds;

(e) the total amount of the premiums paid by the company in respect of all lease-holds reduced in the case of each such premium by an amount which bears to such premium the same proportion as the expired term on the appointed date of the lease in respect of which such premium shall have been paid bears to the total term of the lease;

(f) the scrap value of all such aircraft, power plants, propellers and other accessories, spare parts and stores, not falling within any of the preceding sub-clauses, and all properties as have become obsolete on the appointed date, the scrap value for the purposes of this Act being one per cent. of the book value of the relevant item of property;

(g) the price paid by the existing air company for any trustee security held by it;

(h) the value of any shares held by any existing air company in any other existing air company, the value being calculated on the basis of the valuation of the air transport undertaking of that other company in accordance with the provisions of this Schedule;

(i) the market value on the appointed date or the purchase price whichever is less, of any other investments held by any existing air company in any concern other than another existing air company which, subject to the provisions of section 22, have vested in the
Corporation;

(j) the amount of cash held by any existing air company on the appointed date whether in deposit with a bank or otherwise;

54.(k) the amount of debts other than bad debts due to any existing air company, to the extent to which they are reasonably considered to be recoverable, less the amount of the debts, if any, excluded from the transfer to the Corporation concerned under the provisions of section 22;

(l) the aggregate cost of all licence fees paid by the company under clause (c) of sub-rule (1) of Rule 154 of the Indian Aircraft
Rules, 1937, in respect of the licences granted to it for the operation of any scheduled air transport services and held by it on the appointed date and which but for the provisions of section 19.would continue to remain valid plus a sum of Rs. 100 for each such licence: Provided that the fees paid for each such licence shall be reduced by an amount which bears to such fees the same proportion as the period of the licence which shall have expired on the appointed date bears to the total period of the licence;

(m) the aggregate written down value of all tangible assets other than those falling within the preceding clauses;

(n) an aggregate amount not exceeding ten thousand rupees as may be agreed upon between the Corporation and the existing air company concerned or, failing agreement, which may be assessed by the
Tribunal, in respect of all such assets, intangible or otherwise, as do not fall within any of the preceding sub-clauses and in respect of the loss of any future profits which the existing air company might have earned but for the passing of this Act:

Provided that in assessing any amount under this clause regard shall be had to the following circumstances, namely:–

(i) the profits, if any, earned by it annually during the six years immediately preceding the appointed date on which income-tax has been paid,

(ii) the subsidies, if any, given to that company by the
Central Government during such period, and

(iii) the probability or otherwise of the company earning future profits if it were allowed to continue its scheduled air transport services for the remaining period of the licence held by it after having due regard to the fact that the licences held by it did not confer any monopoly upon it in respect of the routes concerned and the fact that no subsidy would have been payable by the Central Government after the 31st day of
December, 1952.Explanation A.–For the purposes of this Schedule, the written down value in respect of each class of assets means the actual cost to

55.the existing air company of such assets respectively, less the total depreciation calculated at the rates and in the manner following, namely:–

(i) in respect of each airframe, depreciation shall be calculated at 15 per cent. per annum for Constellation and Sky-master aircraft and 18 per cent. per annum for other aircraft from the date on which the aircraft concerned was first used in revenue operations by the company till the 31st day of December, 1952, the rates being applied as follows:–

for the first year, on the actual cost of acquisition;

for the second year, on an amount obtained by reducing from the actual cost of acquisition the amount of depreciation calculated as aforesaid for the first year;

for the third year, on an amount obtained by reducing from the actual cost of acquisition the aggregate amount of depreciation calculated as aforesaid for the preceding two years;

and so on;

(ii) in respect of power plants, the depreciation shall be calculated at 20 per cent. per annum for Constellation and Skymaster aircraft and at 24 per cent. per annum for other aircraft from the date on which the power plant concerned was first used in revenue operations by the company till the 31st day of December, 1952, the rates being applied as follows:–

for the first year, on the actual cost of acquisition;

for the second year, on an amount obtained by reducing from the actual cost of acquisition the amount of depreciation calculated as aforesaid for the first year;

for the third year, on an amount obtained by reducing from the actual cost of acquisition the aggregate amount of depreciation calculated as aforesaid for the preceding two years;

and so on;

(iii) in respect of all tangible assets falling within clause (m) of paragraph II, depreciation shall be calculated at the normal annual rates for which provision is made in the Indian Income-tax Act, 1922.(11 of 1922) and in the manner provided

56.therein, but excluding initial or other special depreciation, from the date such assets were acquired or created by the existing air company until the 31st day of December, 1952:

Provided that in respect of any such asset for which no provision has been made in the Indian Income-tax Act, 1922, (11 of 1922) the rate of depreciation shall be 10 per cent. per annum:

Provided further that in respect of any such asset situate on lease-hold land other than land rented from Government, the depreciation shall be either–

(a) as provided in the preceding provisions of this clause, or

(b) equivalent to an amount which bears the same ratio to the total cost of acquisition or creation of the asset
(situate on lease-hold land) as the expired portion of the lease on the appointed date bears to the total period of the lease currently running, whichever is greater.

Explanation B.–For the purposes of this Schedule, the actual cost shall include, in the case of airframes, in addition to the cost of purchase or acquisition,–

(i) the actual expenditure, if any, incurred by the existing air company for reconversion or reconstruction of the air-frame in order to render it fit for civil air transport before it was used in revenue operations by the company, plus

(ii) the actual expenditure incurred in making the airframe airworthy before its first use in revenue operations.

Explanation C.–In the case of power plants, the actual cost shall include, in addition to the cost of purchase or acquisition, the cost incurred by the company for conversion or reconditioning, repairing or overhauling the power plant, in order to render it fit for the purposes of a certificate under paragraph 4 of section E of
Schedule III to the Indian Aircraft Rules, 1937, before the date of its first use in revenue operations.

Paragraph III.–Subject to the provisions of sections 22 and 23, all such liabilities as have been declared by the existing air company under the provisions of section 22:

Provided that if any liability so declared has been under-stated, the Corporation may recover the additional amount from the company.