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THE ADDITIONAL EMOLUMENTS (COMPULSORY DEPOSIT) ACT, 1974

Legal India — Wed, 01 Jul 2009 09:25:57 +0000

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

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

Legal India — Wed, 01 Jul 2009 09:21:05 +0000

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

Legal India — Wed, 01 Jul 2009 09:06:59 +0000

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).

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.]

(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

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.

12.Funds of the Corporations.

13.Powers of the Corporations in regard to expenditure.

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

15.Accounts and audit.

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

15A.

Audit of accounts of companies formed by Corporations.

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;

(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).

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;

(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;

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).

(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.

THE AIRCRAFT ACT, 1934

Legal India — Tue, 30 Jun 2009 11:03:15 +0000

An Act to make better provision for the control of the manufacture, possession, use, operation, sale, import and export of aircraft.

1.Short title and extent.

1. Short title and extent. (1) This Act may be called the 2***
Aircraft Act, 1934.3*[(2) It extends to the whole of India 4*** and applies also--

(a) to citizens of India wherever they may be; and

(b) to and to the persons on, aircraft registered in India wherever they may be.]

2.Definitions.

2. Definitions. In this Act, unless there is anything repugnant in the subject or context,–

(1) “aircraft” means any machine which can derive support in the atmosphere from reactions of the air 5*[other than reactions of the air against the earths surface], and includes balloons whether fixed or free, airships, kites, gliders and flying machines;

(2) “aerodrome” means any definite or limited ground or water area intended to be used, either wholly or in part, for the landing or departure of aircraft, and includes all buildings, sheds, vessels, piers, and other structures thereon or appertaining thereto;

5*[(2A) "aerodrome reference point", in relation to any aerodrome, means a designated point established in the horizontal plane at or near the geometric centre of that part
----------------------------------------------------------------------
1 The Act has been amended in its application to Goa, Daman and Diu by Reg. 12 of 1962. s. 3 and sch.
The Act has been extended in its application to Dadra and Nagar
Haveli by Reg. 6 of 1963, s. 2 and sch. (w.e.f. 1-7-1965 and to the whole of the Union Territory of Lakshadweep by Reg. 8 of 1965, s. 3.and Sch. (w.e.f. 1-10-1967).
2 The word "Indian" omitted by Act 44 of 1960, s. 2.3 Subs. by the A. O. 1950, for, for the former sub-section (2).
4 The words "except the State of Hyderabad" rep. by Act 3 of 1951, s. 3 and Sch.
5 Ins. by Act 12 of 1972, s. 2 (w.e.f. 20-4-1972).

6.of the aerodrome reserved for the departure or landing of aircraft;]

(3) “import” means bringing into 1*[India]; and

(4) “export” means taking out of 1*[India].

3.Power of Central Government to exempt certain aircraft.

3. Power of Central Government to exempt certain aircraft. The
Central Government may, by notification in the Official Gazette, exempt from 2*[all or any of the provisions of this Act] any aircraft or class of aircraft and any person or class of persons, or may direct that such provisions shall apply to such aircraft or persons subject to such modifications as may be specified in the notification.

4.Power of Central Government to make rules to implement the Conventionof 1944.3*[4. Power of Central Government to make rules to implement the
Convention of 1944. The Central Government may, by notification in the
Official Gazette, make such rules as appear to it to be necessary for carrying out the Convention relating to International Civil Aviation signed at Chicago on the 7th day of December, 1944 (including any
Annex thereto relating to international standards and recommended practices) as amended from time to time.]

5.Power of Central Government to make rules.

5. Power of Central Government to make rules. (1) The Central
Government may, by notification in the Official Gazette, make rules 4*
regulating the manufacture, possession, use, operation, sale, import or export of any aircraft or class of aircraft 5*[and for securing the safety of aircraft operations].

(2) Without prejudice to the generality of the foregoing power, such rules may provide for–

(a) the authorities by which any of the power conferred by or under this Act are to be exercised;

6*[(aa) the regulation of air transport services, and the prohibition of the use of aircraft in such services except under the authority of and in accordance with a licence authorising the establishment of the service;

7*[(ab) the economic regulation of civil aviation and air transport services, including the approval, disapproval or revision of tariff of operators of air transport services; the officers or authorities who may exercise powers in this behalf; the procedure to be followed and the factors to be taken into account by such officers or authorities; appeals to the Central Government against orders of such officers or authorities and all other matters connected with such tariff.

Explanation.--For the purposes of this clause, "tariff"
includes fares, rates, valuation charges and other charges for air transport of passengers or goods, the rules, regulations, practices or services affecting such fares, rates, valuation charges and other charges and the rates, terms and conditions of commission payable to passenger or cargo sales agents;]

8*[(ac)] the information to be furnished by an applicant for, or the holder of, a licence authorising the establishment of an air transport service to such authorities as may be specified in the rules;]

9*[(b) the licensing, inspection and regulation of aerodromes, the conditions under which aerodromes may be main-
----------------------------------------------------------------------
1 Subs. by Act 24 of 1948, s. 3, for "the Provinces".
2 Subs. by Act 37 of 1939, s. 3, for "the provisions of this Act and of the rules made thereunder, or from any of such provisions".
3 Subs. by Act 12 of 1972, s. 3, for the original s. 4.4 See the Indian Aircraft Rules, 1937, published in the Gazette of
India, 1937, Pt. I, pp. 633 to 719.5 Ins. by Act 12 of 1972, s. 4.6 Ins. by Act 5 of 1944, s. 2.7 Ins by Act 1 of 1983, s. 2.8 Rebynoered by s. 2, ibid.
9 Subs. by Act 43 of 1971, s. 41, for the original cl. (b) (w.e.f.
1-2-1972).

7.tained, the prohibition or regulation of the use of unlicensed aerodromes and the fees which may be charged at those aerodromes to which the International
Airports Authority Act, 1971 (43 of 1971) [or the
National Airport Authority Act, 1985] 1* does not apply or is not made applicable:

Provided that until the date determined by the Central
Government under the proviso to sub-section (2) of section 16 of the International Airports Authority Act,
1971 (43 of 1971) any rule made under this clause may provide for the charging of fees for providing air traffic services (including aeronautical and flight information services), aeronautical communication and navigational aids and meteorological services at any aerodrome to which the said Act applies or is made applicable;]

(c) the inspection and control of the manufacture, repair and maintenance of aircraft and of places where aircraft are being manufactured, repaired or kept;

(d) the registration and marking of aircraft;

(e) the conditions under which aircraft may be flown, or may carry passengers, mails or goods; or may be used for industrial purposes and the certificates, licences or documents to be carried by aircraft;

(f) the inspection of aircraft for the purpose of enforcing the provisions of this Act and the rules thereunder, and the facilities to be provided for such inspection;

(g) the licensing of persons employed in the operation, manufacture, repair or maintenance of aircraft;

(h) the air-routes by whhich and the conditions under which aircraft may enter or leave 2*[India], or may fly over
1*[India], and the places at which aircraft shall land;

(i) the prohibition of flight by aircraft over any specified area, either absolutely or at specified times, or subject to specified conditions and exceptions;

(j) the supply, supervision and control of air-route beacons, aerodrome lights, and lights at or in the neighbourhood of aerodromes or on or in the neighbourhood of air-routes;

3*[(jj) the installation and maintenance of lights on private property in the neighbourhood of aerodromes or on or in the neighbourhood of air-routes, by the owners or
----------------------------------------------------------------------
1 Ins. by Act 64 of 1985, s. 42 (w.e.f. 21-5-1986).
2 Subs. by Act 24 of 1948, s. 3, for the words "the Provinces".
3 Ins. by Act 37 of 1939, s. 4.8.occupiers of such property, the payment by the Central
Government for such installation and maintenance, and the supervision and control of such installation and maintenance, including the right of access to the property for such purposes;]

(k) the signals to be used for purposes of communication by or to aircraft and the apparatus to be employed in signalling;

(l) the prohibition and regulation of the carriage in aircraft of any specified article or substance;

(m) the measures to be taken and the equipment to be carried for the purpose of ensuring the safety of life;

(n) the issue and maintenance of log-books;

(o) the manner and conditions of the issue or renewal of any licence or certificate under the Act or the rules, the examinations and tests to be undergone in connection therewith, the form, custody, production, endorsement, cancellation, suspension or surrender of such licence or certificate, or of any log-book;

(p) the fees to be charged in connection with any inspection, examination, test, certificate or licence, made, issued or renewed under this Act;

(q) the recognition for the purposes of this Act of licences and certificates issued elsewhere than in 1*[India]
relating to aircraft or to the qualifications of persons employed in the operation, manufacture, repair or maintenance of aircraft; 2***

3*[(qq) the prohibition of slaughtering and flaying of animals and of depositing rubbish, filth and other polluted and obnoxious matter within a radius of ten kilometres from the aerodrome reference point; and]

(r) any matter subsidiary or incidental to the matters referred to in this sub-section.

4* * * * *
———————————————————————-
1 Subs. by Act 24 of 1948, s. 3, for “the Provinces”.
2 The word “and” omitted by Act 12 of 1972, s. 4.3 Ins. by s. 4, ibid.
4 Sub-section (3) ins. by Act 5 of 1944, s. 3, omitted by Act 44 of
1960, s. 3.9.5A.

Power to issue directions.

1*[5A. Power to issue directions. (1) The Director General of
Civil Aviation or any other officer specially empowered in this behalf by the Central Government may, from time to time, by order, issue directions, consistent with the provisions of this Act and the rules made thereunder, with respect to any of the matters specified in clauses (b), (c), (e), (f), (g), (h) and (m) of sub-section (2) of section 5, to any person or persons engaged in aircraft operations or using any aerodrome, in any case where the Director General of Civil
Aviation or such other officer is satisfied that in the interests of the security of India or for securing the safety of aircraft operations it is necessary so to do.

(2) Every direction issued under sub-section (1) shall be complied with by the person or persons to whom such direction is issued.]

6.Power of Central Government to make orders in emergency.

6. Power of Central Government to make orders in emergency. (1)
If the Central Government is of opinion that in the interests of the public safety or tranquillity the issue of all or any of the following orders is expedient, it may, by notification in the Official Gazette,-
-

(a) cancel or suspend, either absolutely or subject to such conditions as it may think fit to specify in the order, all or any licences or certificates issued under this
Act;

(b) prohibit, either absolutely or subject to such conditions as it may think fit to specify in the order, or regulate in such manner as may be contained in the order, the flight of all or any aircraft or class of aircraft over the whole or any portion of 2*[India];

(c) prohibit, either absolutely or conditionally, or regulate the erection, maintenance or use of any aerodrome, aircraft factory, flying-school or club, or place where aircraft are manufactured, repaired or kept, or any class or description thereof; and

(d) direct that any aircraft or class of aircraft or any aerodrome, aircraft factory, flying-school or club, or place where aircraft are manufactured, repaired or kept, together with any machinery, plant, material or things used for the operation, manufacture, repair or maintenance of aircraft shall be delivered, either forthwith or within a specified time, to such authority and in such manner as it may specify in the order, to be at the disposal of Government for the public service.
———————————————————————-
1 Ins. by Act 12 of 1972, s. 5.2 Subs. by Act 24 of 1948, s. 3, for “the Provinces”.

10.1*[(1A) Any order made under sub-section (1) shall have effect notwithstanding anything inconsistent therewith contained in any rule made under this Act.]

(2) Any person who suffers direct injury or loss by reason of any order made under clause (c) or clause (d) of sub-section (1) shall be paid such compensation as may be determined by such authority as the
Central Government may appoint in this behalf.

(3) The Central Government may authorise such steps to be taken to secure compliance with any order made under sub-section (1) as appear to it to be necessary.

(4) Whoever knowingly disobeys, or fails to comply with, or does any act in contravention of, any order made under sub-section (1)
shall be punishable with imprisonment for a term which may extend to three years, or with fine, or with both, and the Court by which he is convicted may direct that the aircraft or thing (if any) in respect of which the offence has been committed, or any part of such thing, shall be forfeited to Government.

7.Power of Central Government to make rules for investigation ofaccident.

7. Power of Central Government to make rules for investigation of accident. (1) The Central Government may, by notification in the
Official Gazette, make rules 2* providing for the investigation of any accident arising out of or in the course of 3*[the navigation--

(a) in or over 4*[India] of any aircraft, or

(b) anywhere of aircraft registered in 4*[India]].

(2) Without prejudice to the generality of the foregoing power, such rules may–

(a) require notice to be given of any accident in such manner and by such person as may be prescribed;

(b) apply for the purposes of such investigation, either with or without modification, the provisions of any law for the time being in force relating to the investigation of accidents;

(c) prohibit pending investigation access to or interference with aircraft to which an accident has occurred, and authorise any person so far as may be necessary for the purposes of an investigation to have access to, examine, remove, take measures for the preservation of, or otherwise deal with, any such aircraft; and
———————————————————————-
1 Ins. by Act 12 of 1972, s. 6.2 See Pt. X of the Indian Aircraft Rules, 1937, published in the
Gazette of India, 1937, Pt. I, pp. 661 to 665.3 Subs. by Act 37 of 1939, s. 5, for “air navigation in or over
British India”.
4 Subs. by Act 24 of 1948, s. 3, for the words “the Provinces”.

11.(d) authorise or require the cancellation, suspension, endorsement or surrender of any licence or certificate granted or recognised under this Act when it appears on an investigation that the licence ought to be so dealt with, and provide for the production of any such licence for such purpose.

8.Power to detain aircraft.

8. Power to detain aircraft. (1) Any authority authorised in this behalf by the Central Government may detain any aircraft, if in the opinion of such authority–

(a) having regard to the nature of an intended flight, the flight of such aircraft would involve danger to persons in the aircraft or to any other persons or property; or

(b) such detention is necessary to secure compliance with any of the provisions of this Act or the rules applicable to such aircraft; or such detention is necessary to prevent a contravention of any rule made under clause (h) or clause (i) of sub-section (2) of section 5 1*[or to implement any order made by any court].

(2) The Central Government may, by notification in the Official
Gazette, make rules 2* regulating all matters incidental or subsidiary to the exercise of this power.

8A.

Power of Central Government to make rules for protecting the publichealth.

3*[8A. Power of Central Government to make rules for protecting the public health. The Central Government may, by notification in the Official Gazette, make rules 4* for the prevention of danger arising to the public health by the introduction or spread of any infectious or contagious disease from aircraft arriving at or being at any aerodrome and for the prevention of the conveyance of infection or contagion by means of any aircraft leaving an aerodrome and in particular and without prejudice to the generality of this provision may make, with respect to aircraft and aerodromes or any specified aerodrome, rules providing for any of the matters for which rules under sub-clauses (i) to (viii) of clause (p) of sub-section (1) of section 6 of the Indian Ports Act, 1908 (15 of
1908), may be made with respect to vessels and ports.]

8B.

Emergency powers for protecting the public health.

5*[8B. Emergency powers for protecting the public health. (1) If the Central Government is satisfied that India or any part thereof is visited by or threatened with an outbreak of any
----------------------------------------------------------------------
1 Ins. by Act 12 of 1972, s. 7.2 See for instance, rule 18 of the Indian Aircraft Rules, 1937.(Gazette of India, 1937, Pt. I, p. 640).
3 Ins. by Act 7 of 1936, s. 2.4 For the Indian Aircraft (Public Health) Rules, 1946, see Gazette of India, Extraordinary, 1946, p. 775.5 Ins. by Act 22 of 1938, s. 2.12.dangerous epidemic disease, and that the ordinary provisions of the law for the time being in force are insufficient for the prevention of danger arising to the public health through the introduction or spread of the disease by the agency of aircraft, the Central Government may take such measures as it deems necessary to prevent such danger.

(2) In any such case the Central Government may, without prejudice to the powers conferred by section 8A, by notification in the Official Gazette, make such temporary rules with respect to aircraft and persons travelling or things carried therein and aerodromes as it deems necessary in the circumstances.

(3) Notwithstanding anything contained in section 14, the power to make rules under sub-section (2) shall not be subject to the condition of the rules being made after previous publication, but such rules shall not remain in force for more than three months from the date of notification:

Provided that the Central Government may by special order continue them in force for a further period or periods of not more than three months in all.]

8C.

Power of Central Government to make rules for securing safe custodyand re-delivery of unclaimed property.

1*[8C. Power of Central Government to make rules for securing safe custody and re-delivery of unclaimed property. The Central
Government may, by notification in the Official Gazette, make rules which may provide for securing the safe custody and re-delivery of any property which, while not in proper custody, is found on any aerodrome or in any aircraft on any aerodrome and any such rules may, in particular, provide for--

(a) the payment of charges in respect of any such property before it is re-delivered to the person entitled thereto; and

(b) the disposal of any such property in cases where the same is not re-delivered to the person entitled thereto before the expiration of such period as may be specified therein.]

9.wreck and Salvage.

9. wreck and Salvage. (1) 2*[The provisions of Part XIII of the
Merchant Shipping Act, 1958 (44 of 1958.)], relating to wreck and salvage shall apply to aircraft on or over the sea or tidal waters as they apply to ships, and the owner of an aircraft shall be entitled to a reasonable reward for salvage services rendered by the aircraft in like manner as the owner of a ship.

(2) The Central Government may, by notification in the Official
Gazette, make such modifications of the said provisions in their application to aircraft as appear necessary or expedient.
———————————————————————-
1 Ins. by Act 12 of 1972, s. 8.2 Subs. by s. 9, ibid., for certain words.

13.9A.

Power of Central Government to prohibit or regulate construction ofbuildings planting of trees, etc.

1*[9A. Power of Central Government to prohibit or regulate construction of buildings, planting of trees, etc. (1) If the Central
Government is of opinion that it is necessary or expedient so to do for the safety of aircraft operations, it may, by notification in the
Official Gazette,--

(i) direct that no building or structure shall be constructed or erected, or no tree shallbe planted, on any land within such radius, not exceeding twenty kilometres from the aerodrome reference point, as may be specified in the notification and where there is any building, structure or tree on such land, also direct the owner or the person having control of such building, structure or tree to demolish such building or structure or, as the case may be, to cut such tree within such period as may be specified in the notification;

(ii) direct that no building or structure higher than such height as may be specified in the notification shall be constructed or erected, or no tree, which is likely to grow or ordinarily grows higher than such height as may be specified in the notification, shall be planted, on any land within such radius, not exceeding twenty kilometres from the aerodrome reference point, as may be specified in the notification and where the height of any building or structure or tree on such land is higher than the specified height, also direct the owner or the person having control of such building, structure or tree to reduce the height thereof so as not to exceed the specified height, within such period as may be specified in the notification.

(2) In specifying the radius under clause (i) or clause (ii) of sub-section (1) and in specifying the height of any building, structure or tree under the said clause (ii), the Central Government shall have regard to--

(a) the nature of the aircraft operated orintended to be operated in the aerodrome; and

(b) the international standards and recommended practices governing the operations of aircraft.

(3) Where any notification has been issued under sub-section (1)
directing the owner or the person having control of any building, structure or tree to demolish such building or structure or to cut such tree or to reduce the height of any building, structure or tree, a copy of the notification containing such direction shall be served
----------------------------------------------------------------------
1 Ins. by Act 12 of 1972, s. 10.14.on the owner or the person having the control of the building, structure or tree, as the case may be,--

(i) by delivering or tendering it to such owner or person;
or

(ii) if it cannot be so delivered or tendered, by delivering or tendering it to any officer of such owner or person or any adult male member of the family of such owner or person or by affixing a copy thereof on the outer door or on some conspicuous part of the premises in which such owner or person is known to have last resided or carried on business or personally worked for gain; or failing service by these means;

(iii) by post.

(4) Every person shall be bound to comply with any direction contained in any notification issued under sub-section (1).

9B.

Payment of compensation.

9B. Payment of compensation. (1) If in consequence of any direction contained in any notification issued under sub-section (1)
of section 9A, any person sustains any loss or damage, such person shall be paid compensation the amount of which shall be determined in the manner and in accordance with the principles hereinafter set out, that is to say,--

(a) where the amount of compensation can be fixed by agreement, it shall be paid in accordance with such agreement;

(b) where no such agreement can be reached, the Central
Government shall appoint as arbitrator a person who is or has been qualified for appointment as a Judge of a
High Court;

(c) the Central Government may, in any particular case, nominate a person having expert knowledge as to the nature of the loss or damage suffered by the person to be compensated and where such nomination is made, the person to be compensated may also nominate an assessor for the same purpose;

(d) at the commencement of the proceedings before the arbitrator, the Central Government and the person to be compensated shall state what, in their respective opinion, is a fair amount of compensation;

(e) the arbitrator shall, after hearing the dispute, make an award determining the amount of compensation which appears to him to be just and specify the person or

15.persons to whom such compensation shall be paid; and in making the award he shall have regard to the circumstances of each case and,--

(i) the damage sustained by the person to be compensated in his earnings;

(ii) if in consequence of any direction contained in any notification issued under sub-section (1) of section 9A the market value of the land immediately after the issue of such notification is diminished, the diminution in such market value;

(iii) where any building or structure has been demolished or any tree has been cut or the height of any building, structure or tree has been reduced in pursuance of any direction, the damage sustained by the person to be compensated in consequence of such demolition, cutting or reduction and the expenses incurred by such person for such demolition, cutting or reduction;

(iv) if the person to be compensated is compelled to change his residence or place of business, the reasonable expenses, if any, that may have to be incurred by him incidental to such change;

(f) where there is any dispute as to the person or persons who are entitled to the compensation, the arbitrator shall decide such dispute and if the arbitrator finds that more persons than one are entitled to compensation, he shall apportion the amount thereof amongst such persons;

(g) nothing in the Arbitration Act, 1940 (10 of 1940.) shall apply to arbitrations under this section.

(2) Every award made by the arbitrator under clause (e) of sub-
section (1) shall also state the amount of costs incurred in the proceedings before it and by what persons and in what proportions they are to be paid.

9C.

Appeals from awards in respect of compensation.

9C. Appeals from awards in respect of compensation. Any person aggrieved by an award of the arbitrator made under section 9B may, within thirty days from the date of such award, prefer an appeal to the High Court within whose jurisdiction the aerodrome is situate:

Provided that the High Court may entertain the appeal after the expiry of the said period of thirty days if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal in time.

16.9D.

Arbitrator to have certain powers of civil courts.

9D. Arbitrator to have certain powers of civil courts. The arbitrator appointed under section 9B, while holding arbitration proceedings under this Act, shall have all 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, namely:--

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

(b) requiring the discovery and production of any document;

(d) requisitioning any public record from any court or office;

(e) issuing commissions for examination of witnesses.]

10.Penalty for act in contravention of rule made under this Act.

1*[10. Penalty for act in contravention of rule made under this
Act. (1) If any person contravenes any provision of any rule made under clause (l) of sub-section (2) of section 5 prohibiting or regulating the carriage in aircraft of arms, explosives or other dangerous goods, or when required under the rules made under that clause to give information in relation to any such goods gives information which is false and which he either knows or believes to be false or does not believe to be true he, and if he is not the owner, the owner also (unless the owner proves that the offence was committed without his knowledge, consent or connivance) shall be punishable with imprisonment which may extend to two years and shall also be liable to fine.

2*[(1A) If any person contravenes any provision of any rule made under clause (qq) of sub-section (2) of section 5 prohibiting the slaughter and flaying of animals and of depositing rubbish, filth and other polluted and obnoxious matters within a radius of ten kilometres from the aerodrome reference point, he shall be punishable with imprisonment which may extend to one year, or with fine which may extend to two thousand rupees, or with both.

(1B) Notwithstanding anything contained in the Code of Criminal
Procedure, 1973 (2 of 1974.), an offence referred to in sub-section
(1A) shall be cognizable.]

(2) In making any other rule under section 5 or in making any rule under section 7, section 8, section 8A or section 8B, the Central
Government may direct that a breach of it shall be punishable with imprisonment for a period which may extend to three months, or with fine which may extend to one thousand rupees, or with both.]

11.Penalty for flying so as to cause danger.

11. Penalty for flying so as to cause danger. Whoever wilfully flies any aircraft in such a manner as to cause danger to any person or to any property on land or water or in the air shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to one thousand rupees, or with both.

11A.

Penalty for failure to comply with directions issued under section 5A.

3*11A. Penalty for failure to comply with directions issued under section 5A. If any person wilfully fails to comply with any direction issued under section 5A, he shall be punishable with imprisonment for a term which may extend to six months or with fine which may extend to one thousand rupees, or with both.
———————————————————————-
1 Subs. by Act 44 of 1960, s. 4, for the former s. 10.2 Ins. by Act 50 of 1988, s. 2.3 Ins. by Act 12 of 1972, s. 11.17.11B.

Penalty for failure to comply with directions issued under section 9A.

11B. Penalty for failure to comply with directions issued under section 9A. (1) If any person wilfully fails to comply with any direction contained in any notification issued under section 9A, he shall be punishable with imprisonment for a term which may extend to six months or with fine which may extend to one thousand rupees, or with both.

(2) Without prejudice to the provisions of sub-section (1), if any person fails to demolish any building or structure or cut any tree or fails to reduce the height of any building, structure or tree in pursuance of any direction contained in any notification issued under sub-section (1) of section 9A within the period specified in the notification, then, subject to such rules as the Central Government may make in this behalf, it shall be competent for any officer authorised by the Central Government in this behalf to demolish such building or structure or cut such tree or reduce the height of such building, structure or tree.]

12.Penalty for abetment of offences and attempted offences.

12. Penalty for abetment of offences and attempted offences.
Whoever abets the commission of any offence under this Act or the rules, or attempts to commit such offence, and in such attempt does any act towards the commission of the offence, shall be liable to the punishment provided for the offence.

13.Power of Court to order forfoeiture.

13. Power of Court to order forfeiture. 1*[Where any person is convicted of an offence punishable under sub-section (1) of section 10.or under any rule made under clause (i) of sub-section (2) of section
5], the Court by which he is convicted may direct that the aircraft or article or substance, as the case may be, in respect of which the offence has been committed, shall be forfeited to Government.

14.Rules to be made after publication.

2*[4. Rules to be made after publication. Any power to make rules conferred by this Act is subject to the condition of the rules being made after previous publication:

Provided that the Central Government may, in the public interest, by order in writing, dispense with the condition of previous publication in any case.]

14A.

Laying of rules before Parliament.

3*[14A. Laying of rules before Parliament. Every rule made under this Act shall be laid as soon as may be after it is made before each
House of Parliament while it is in session for 4*[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 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 of no effect, as the case may be; so however, that any such modification or annulment
———————————————————————-
1 Subs. by Act 44 of 1960, s. 5, for certain words, letters, brackets and figures.
2 Subs. by Act 69 of 1985, s. 2 (w.e.f. 16-10-1985).
3 Ins. by Act 44 of 1960, s. 6.4 Subs by Act 1 of 1988, s. 3.18.shall be without prejudice to the validity of anything previously done under that rule.]

15.Use of patented invention on aircraft not registered in India.

15. Use of patented invention on aircraft not registered in
India. The provisions of section 42 of the Indian Patents and Designs
Act, 1911, (2 of 1911.) shall apply to the use of an invention on any aircraft not registered in 1*[India] in like manner as they apply to the use of an invention in a foreign vessel.

16.Power to apply customs procedure.

16. [Power to apply customs procedure.] Rep. by the Customs Act,
1962 (52 of 1962), s. 160 and Sch. (w.e.f. 1-2-1963).

17.Bar of certain suits.

17. Bar of certain suits. No suit shall be brought in any Civil
Court in respect of trespass or in respect of nuisance by reason only of the flight of aircraft over any property at a height above the ground which having regard to wind, weather and all the circumstances of the case is reasonable, or by reason only of the ordinary incidents of such flight.

18.Saving for acts done in good faith under the Act.

18. Saving for acts done in good faith under the Act. No suit, prosecution or other legal proceeding shall lie against any person for anything in good faith done or intended to be done under this Act.

19.Saving of application of Act.

19. Saving of application of Act. (1) Nothing in this Act or in any order or rule made thereunder 2*[other than a rule made under section 8A or under section 8B] shall apply to or in respect of any aircraft belonging to or exclusively employed in 3*[the naval, military or air forces of the Union], or to any person in such forces employed in connection with such aircraft.

(2) Nothing in this Act or in any order or rule made thereunder shall apply to or in respect of any lighthouse to which the Indian
Lighthouse Act, 1927, (17 of 1927.) applies or prejudice or affect any right or power exercisable by any authority under that Act.

20.Repeals.

20. [Repeals.] Rep. by the Repealing Act, 1938 (1 of 1938), s. 2.and Sch.
———————————————————————-
1 Subs. by Act 24 of 1948, s. 3, for the words “the Provinces”.
2 Ins. by Act 12 of 1972, s. 12.3 Subs. by the A. O. 1950 for “His Majestys naval, military or air forces”.

THE AIRPORTS AUTHORITY OF INDIA ACT, 1994

Legal India — Tue, 30 Jun 2009 10:59:31 +0000

An Act to provide for the Constitution of the Airports Authority of India and for the transfer and vesting of the undertakings of the International Airports Authority of India and the National Airports Authority to and in the Airports Authority of India so constituted for the better administration and cohesive management of Airports and Civil enclaves whereat air transport services are operated or are intended to be operated and of all aeronautical communication stations and for matters connected therewith or incidental thereto.

Be it enacted by Parliament in the forty-fifth year of the Republic of India as follows:-

CHAPTER I
PRELIMINARY

1.Short title commencement and application.- (1) This Act may be called the Airports Authority of India Act 1994.

(2) It shall come into force on such date {11-4-1994 : vide Notification No.S.O.285(E), dt.30-3-1995}as the Central Government may be notification in the official Gazette appoint.

(3) It applies to-

(a) all airports whereat air transport services are operated or are intended to be operated other than airports and airfields belonging to or subject to the control of any red force of the Union:

(b) all civil enlaces;

(d) all training stations establishments and worships reliant to air transport services.

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

(a) $aeronautical communication station means station n in the aeronautical communication service which includes aeronautical practising service aeronautical fixed service aeronautical mobile service and aeronautical; radio communication service:

(b) airport means a landing and taking off area for aircraft$s usually with runways and aircraft maintenance and passenger facilities and includes accordance as defined in clause 920 of section 2 of the aircraft Act 1934 (22 of 1934).

(c) airstrip means used or intended to be used for the landing and take-off of aircraft$s with short take-off and laming character and includes all buildings and structures thereon or appertaining thereto;

(d) air traffic service includes flight information service.Alerting service air traffic advisory service air traffic control serve areas control service approach control service and airport control service;

(e) air transport service means any service for any kind of remuneration whatsoever for the transport by air of person mail or any other thing animate or inanimate whether such service relates to an single flight or series of flights;

(f) :appointed day means such date as the Central Government may be notification in he official gazette appoint for the purpose of section 3.

(g) :Authority means the Airports Authority of India constituted under section 3;

(h) :Chairperson: means the Chairperson of the Authority appointed under clause (a) of sub-section (3)of section 3;

(i) civil enclave means the area if any allotted at an airport belonging to any armed force of the Union, for use by persons availing of any air transport services from such airport or for the handling of baggage or cargo by such service and includes and comprising of any building and structure on such area;

(j) heliport means an area either at ground level on elevated on a structure used or intended to be for the landing and take off of helicopter and includes any are of parking heliports and all bulldog and structure thereon or appertaining thereto;

(k) International Airports Authority means the International Airports Authority of India constituted under section 3 of the International Airports Authority Act 1971 (43 of 1971).

(1) member means a member of the Authority and includes the Chairperson but does not include for the purpose of sections 4,5,6 and 7 an ex officio member referred to in clause 9b) of sub-section (3) of section 3;

(m) National Airports Authority means the national Airports Authority constituted under section 3 of the national Airports Authority Act 1985 (64 of 1985)

(n) prescribed means prescribed by rules made under this Act;

(o) regulations means regulations made under this Act.

CHAPTER II
THE AIRPORTS AUTHORITY OF INDIA

3.Constitution and incorporation of the authority.- (1) with effect from the appointed day the Central Government shall by notification in the official gazette constitute Authority to be called the Airports Authority of India.

(2) The authority shall be a body corporate by the name aforesaid having perpetual succession and a common seal with power subject to the provision of this Act, to acquire hold and dispose of property both movable and immovable and to contract and shall by the said bane sue and be sued.

(3) The authority shall consist of-

(a) a Chairperson to be appointed by the Central Government;

(b) The Director General OF Civil Aviation or an officer not below the rank of the Deputy Director General of Civil Aviation to be appointed by the Central Government ex officio;

(4) The Chairperson shall be a whole-time member and other members referred to in clause 9c) of sub-section 93) may be appointed as whole-time of part-time members as the Central Government may think fit.

(5) the Chairperson and the members referred to in clause (c) of sub-section (3) shall be chosen from among persons who have special knowledge and experience in an transport services industry commercial or financial matters or administration and from among persons who are capable of representing organisation of workers and consumers.

4.Disqualification for office of member.- a person shall be disqualified for being appointed as a member it he-

(a) has been convicted and sentenced to imprisonment for an offence which in the opinion of the Central Government involves moral turpitude; or

(b) is an undischarged insolvent; or

(d) has been removed or dismissed from the service of the Government or a body corporate owned or controlled by the government or

(e) has in the opinion of the Central Government such financial or other interest in the Authority as is likely to affect prejudicially the discharge by him of his functions as a member.

5.Term of office and conditions of service of members.- (1) Subject to the provisions of section 6,-

(i) every whole-time member (other than the ex officio member shall hold office for a period of five years from the date on which he assumes office or till he attains he age of sixty years whichever is earlier and

(ii) every part-time member (other than the ex officio member) shall hold office for a period of three years from the date on which he assumes office:

Provided that the Central Government –

(a) terminate the appointment of any whole-time member, who is not a servant of the Government after giving him notice for a period of not less than three months or in lieu thereof, on payment of an amount equal to his salary and allowances, if any for a period of three months:

(b) terminate the appointment of any part-time member who is not a servant of the Government after giving him notice for such period as may be prescribed; and

(2) The other conditions of service of he members shall be such as may be prescribed.

(3) Any member may resign his office giving notice in writing for such period as may be prescribed to the Central Government and on such resignation being notified in the Official Gazette by that Government, such member shall be deemed to have vacated his office.

6.Vacation of office member.- The Central Government shall remove a member if he-

(a) becomes subject to any of the disqualification mentioned in section 4:

Provided that no member shall be removed on the ground that he has become subject to the disqualification mentioned in clause (e) of that section, unless he has been given a reasonable opportunity of being heard in he matter; or

(b) refuses to Act or becomes incapable of acting; or

(c) is, without obtaining leave of absence from the Authority absent from three consecutive meetings of the Authority; or

(d) in the opinion of the Central Government has so abused his position as to render his continuance in office detrimental to the public interest:

Provided that no member shall be removed under this clause unless he has been given a reasonable opportunity of being heard in the matter.

7.Eligibility of member for re-appointment.- Any person ceasing to be a member shall, unless disqualified under section 4, be eligible for re-appointment.

8.Meetings.- (1) The Authority shall meet at such times and places and shall observe such rules of procedure in regard to the transaction of he business at its meetings (including the quorum at such meetings) as may be provided by regulations.

(2) The Chairperson, or if for any reason he is unable to attend any meetings of the Authority any other member chosen by the members present at the meeting shall preside at the meeting.

(3) All questions which come up before any meeting of the Authority shall be decided by a majority of the votes of the members present and voting and in the servant of an equality of votes the Chairperson, or in his absence the person presiding, shall have and exercise a second or casting vote.

9.Vacancies, etc., not to invalidate proceeding of the Authority.- No Act or proceeding of the Authority shall be invalid merely be reason of-

(a) any vacancy in, or any defect in the constitution of the Authority; or

(b) any defect in the appointment of a person acting as a member of the Authority; or

10.Appointment of officers and other employees of the Authority.- (1) For the purpose of enabling of efficiently to discharge its function under this Act, the Authority shall subject to the provisions of section 18 and to such rules as may be made in this behalf appoint (whether on deputation or otherwise) such number of officers and together employees as it may consider necessary;

Provided that the appointment of such category of officers as may be specified after consultation with the Chairperson in such rules, shall be subject to the approval of the Central Government.

(2) Subject to the provisions of section 18 every officer or other employee appointed by the Authority shall be subject to such conditions of service and shall be entitled to such remuneration as may be determined by regulations.

11.Authority to act on business principles.- In the discharge of its functions under this Act, the Authority shall Act, so far as may be, on business principles.

CHAPTER III
FUNCTIONS OF THE AUTHORITY

12.Functions of the Authority.- (1) Subject to the rules, if any made by the Central Government in this behalf it shall be the function of the Authority to manage the airports, the civil enlaces and the aeronautical communication stations efficiently.

(2) It shall be the duty of the Authority to provide it traffic service and air transport service at any airport and civil enclaves.

(3) Without prejudice to the generality of the provisions contained in sub-section (1) and (2) the Authority may-

(a) plan develop construct and maintain runways, taxiways, aprons and terminals and ancillary buildings at the airports and civil enclaves.

(b) plan, procure install and maintain navigational aids, communication equipment beacons and ground aids at the airports and at such locations as may be considered necessary for safe navigation and operation of aircraft.

(d) establish schools or institutions or centres for the training of its officers and employees in regard to any matter connected with the purpose of this Act;

(e) construct residential buildings for its employees;

(f) establish and maintain hotels, restaurants and restrooms at or near the airport;

(g) establish warehouses and cargo complexes at the airports for the storage or processing of goods.

(h) arrange for postal, money exchange, insurance and telephone facilities for the is of passengers and other persons at the airports and civil enclaves;

(i) make appropriates arrangements for watch and ward at he airports and civil enclaves;

(j) regulate and control the playing of vehicles and the entry and exit of passengers and visitors in the airports and civil enclaves with due regard to the security and protocol functions of the Government of India;

(k) develop and provide consultancy construction or management services and undertake operations in India and abroad in relation to airports air-navigation services ground aids and safety services or any facilitates thereat;

(l) establish and manage heliports and airports;

(m) provide such transport facility as are in the opinion of the Authority necessary to the passengers travelling by air;

(n) form one or more companies under the Companies Act, 1956 (1 of 1956) or under any other law relating to companies to further the efficient discharge of the functions imposed on it by this Act;

(o) 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 conferred or imposed on it by this Act.

(p) perform any other function considered necessary or desirable by the Central Government for ensuring the safe and efficient operation of aircraft to from and across the air space of India;

(q) establish training institutes and worships;

(r) any other activity a the airports and the civil enclaves in the best commercial interest of he Authority including cargo handling setting up of joint ventures for the discharge of any function assigned to the authority.

(4) In the discharge of its functions under section the Authority shall have due regard to the development of air transport service and to the efficiency economy and safety of such service.

(5) Nothing contained in this section shall be construed as-

(a) authorising the discharged by the Authority of any law for the time being in force or

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

CHAPTER IV
PROPERTY AND CONTRACT

13.Undertakings of the International Airports Authority and the National Airports Authority to vest in the Authority.- (1) On and from the appointed day, there shall be transferred to and vest in the authority constituted under section 3 of the undertakings of the International Airports Authority and the National Airports Authority.

(2) The undertakings of the International Airports Authority or the National Airports Authority which is transferred to and which vests in the Authority under sub-section (1) shall be deemed to include all assets, rights powers authorities and privileges and all property movable and immovable real or personal corporate or incorporeal, present or contingent, of whatever nature and wheresoever situate including lands, building machinery equipment works workshops cash balances capital reserves reserve funds investments tenancies leases and book debts and all other rights and interests arising out of such properly as were immediately before the appointed day in the ownership possession or pour of the International Airports Authority or as the case may be, the National Airports Authority 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 the International Airports Authority or as the case may be the National Airports Authority in relation to its undertaking.

14.General effect of vesting of undertaking in the Authority.- (1) All contracts agreements and working arrangements subsisting immediately before the appointed day and affecting the International Airports Authority or as the case may be the National Airports Authority shall in so far as they relate to the International Airports Authority or as the case may be the National Airports Authority cease to have effect or be enforceable against the International Airports Authority or as the case may be the National Airports Authority and shall be of as full force and effect against or in favour of the Authority in which the undertakings have vested by virtue of this Act and enforceable as fully and effectual as if instead of the International Airports Authority or as the case may be the National Airports Authority or as the case may be the National airports the Authority had been named therein or had been a party thereto.

(2) Any proceeding suit or cause of action pending or exiling immediately before the appointed day by or against the International Airports Authority or the National Airports Authority in relation to its undertakings may, as from that day be continued and enforced to its undertakings may, as from that day be continued and enforced by or against the authority in which it has vested by virtue of this Act, as it might have been enforced by or against the International Airports Authority or the National Airports Authority if this Act had not been passed, and shall cease to be enforceable by or against the International Airports Authority or as the case may be the National Airports Authority.

15.Licences etc., to be deemed to have been granted to the Authority.- With effect from the appointed day, shall all licences permits quotas and exemptions granted to the International Airports Authority or the National Airports Authority in connection with the affairs and business of the International Airports Authority or as the case may be the National airports under any law for the time being in force, shall be deemed to have been granted to the authority in which the undertakings of the International Airports Authority and the National Airports Authority have vested of this Act.

16.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 y way of set off or carry forward as the case may be or any unabsorbed description or investment allowance or other allowance or loss has been extended or is available Authority, under the Income-tax Act, 1961 (43 of 1961) such exemption assessment or benefit shall continue to have effect in relation to the Authority in which the undertakings of the International Airports Authority and the National Airports Authority have vested by virtue of this Act.

(2) where any payment made by the International Airports Authority or the National Airports Authority is exempt from deduction of the tax at source under any provision of the Income-tax Act, 1961 (43 of 1961) the exemption from tax will continue to be available as if the provisions of the said Act made applicable to the International Airports Authority or the National Airports Authority were operative relation to the authority in which the undertakings of the International Airports Authority and the national Airports Authority have been vested by virtue of this Act.

(3) The transfer and vesting of the undertakings or any part thereof in terms of section 13 shall not be construed as a transfer within the meaning of the Income-tax Act, 1961 (43 of 1961) for the purposes of capital gains.

17.Guarantee to be operative.- Any guarantee given for is favour on the International Airports Authority or the National Authority with respect to any loan or lease finance shall continue to be operative in relation to the authority in which the undertakings of the International Airports Authority and the National Airports have vested by virtue of this Act.

18.Provisions in respect of officers and other employees of the International Airports Authority and the National Airports Authority.- (1) (a) Every officer or other employee of the International Airports Authority 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 the Authority by virtue of this Act, becomes as from the appointed day an officer or as the case may be other employee of the International Airports division of the Authority.

(b) Every officer or other employee of the National Airports Authority serving in its employment immediately before the appointed day shall, in so far as such officer of other employee is employee in connection with the undertaking which has vested in the Authority by virtue of this Act, becomes as from the appointed day an officer or, as the case may be other employee of the National Airports Division of the authority.

(2) Every officer or other employee of the International Airports Authority or the National Airports who becomes an officer or as the case may be other employee of the Authority as referred to in sub-section (1) 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 it leave passage insurance superannuating scheme provident fund other funds retirement pension gratuity and other benefits as he would have held under the International Airports Authority or as the case may be the National Airports Authority if its undertaking had nit vested in the Authority and shall continue to do so as an officer or other employee one year from the appointed day if such officer or other employee opt not to be the officer or other employee of the authority within such period:

Provided that if the authority thinks it expedient to extend the period so fixed it may the same up to a maximum period of one year.

(3) Where an officer or other employee if the International Airports Authority or the National Airports Authority opts under sub-section (2) not to be in the employment or service of the Authority in which the undertakings of the International Airports Authority and the National Airports Authority have vested, such officer or other employee shall be deemed to have resigned from the respective cadre.

(4) Notwithstanding anything contained in the Industrial disputes Act, 1947 or in any other law for the time being in force the transfer of the services of any officer or other employee of the International Airports Authority or the National airports to the Authority shall not Act or under any other law for the time benign in force and no such claim shall be entertained by any court tribunal or other authority.

(5)The officers and other employees who have retired before the appointed day from the services of the International Airports Authority or the National Airports Authority and are entitled to any benefits, rights or privileges shall be entitled to receive the same benefits, rights or privileges from the authority in which the undertakings of the International Airports Authority and the National Airports Authority have vested.

(6) The trusts of the Provident Fund and Group Insurance and Superannuating Scheme of the International airports or the National Airports Authority and any other bodies created for the welfare of officers or employees would continue to discharge their functions in the authority as was being done hitherto in he International Airports Authority or the National Airports Authority and tax exemption granted to Provident fund or Group Insurance and superannuating Scheme would continue to be applied to the Authority.

(7) After the expiry of the period of one year to the extended period as referred to in sub-section (2) all the officers and other employees transferred and appointed to the Authority other than those opting not to be the officers or employees of the Authority within such period, shall be governed by the rules and regulations made by the Authority in respect of the service conditions of the officers and other employees of the said Authority.

19.Compulsory acquisition of land for the Authority.- Any land required by the authority for the discharge of its functions under this Act shall be deemed to be needed for a public purpose and such land may be acquired for he Authority under the provisions of the Land Acquisition Act, 1894 (1 of 1894) or any other corresponding law for the time being in force.

20.Contracts by the Authority.- Subject to the provisions of section 21, the Authority shall be competent to enter into and perform any contract necessary for the discharge of its functions under this Act.

21.Mode of executing contracts on behalf of the authority.- (1) Every contract shall, on behalf of the Authority, be made by the Chairperson or such member or such officer of the Authority as may be generally or specially empowered in this behalf by the Authority and such contracts or class of contracts as may be specified in the regulations shall be sealed with the common seal of the Authority:

Provided that no contract exceeding such value of amount as the Central Government may, from time to time by order fix in this behalf shall be made unless it has been previously approved by the Authority.

Provided further that no contract for the acquisition or sale of immovable property or for the ;ease of any such property for a term exceeding thirty years and no other contract exceeding such value or amounts as the Central Government may, from time to time by order fix in this behalf shall be made unless it has been previously approved by the Central Government.

(2) subject to the provisions of sub-section (1) the form and manner in which any contract shall be under this Act shall be such as may be specified by regulations.

(3) No contract which is not in accordance with the provisions of this Act and the regulations shall be binding on the Authority.

CHAPTER V
FINANCE, ACCOUNTS AND AUDIT

22.Power the Authority to charge fees, rent , etc.- The Authority may-

(i) with the previous approval of the Central Government charge fees or rent-

(a) for the landing housing or parking of aircraft or for any other service or facility offered in connection with aircraft operation at any airport heliport or airstrip.

Explanation-In this sub-clause aircraft does not include an aircraft belonging to any armed force of the Union and aircraft operation does not include operations of any aircraft belonging to the said force:

(b) for providing air traffic services, ground safety services, aeronautical communications and navigational aids and meteorological services at any airport an at any aeronautical communication station;

(d) for the use and employment by persons of facilities and other services provided by the Authority at any airport civil enclave heliport or airstrip;

(ii) with due regard to the instructions that the Central Government may give to the Authority from time to time charge fees of rent from persons who are given by the Authority any facility for carrying on any trade or businesses t any airport heliport or airstrip.

23.Additional capital and grant to the Authority by the Central Government.- The Central Government may after due appropriation made by Parliament any law in this behalf-

(a) provide any capital that may be required by the authority for the discharge of its functions under this Act or any purpose connected therewith on such terms and conditions as that Government may determine;

(b) pay to the Authority on such terms and conditions as the Central Government may determine by way of loans or grants such sums of money as that Government may consisted necessary for the efficient discharge by the authority of its functions under this Act.

24.Fund of the Authority and its investment.- (1) The Authority shall have its own fund and all receipts of the Authority shall be credited thereto and all payments of the authority shall be made therefrom.

(2) The authority shall have power subject to the provisions of this Act, to spend such sums as it thinks fit to cover all administrative expenses of the authority and on objects or for purposes authorised by this Act and such sums shall be treated as expenditure out of the fund of the Authority.

(3) All moneys standing at the credit of the authority which cannot immediately be applied as provided in sub-section 92 , shall be-

(a) deposited in the State Bank of India or any such scheduled bank or banks other public financial institutions subject to such conditions as may from time to time be specified by the Central Government and

(b) invested in the securities of the Central Government or is such manner as may be prescribed.

Explanation –In this sub-section Scheduled bank has the same meaning as in clause(e) of section 2 of the Reserve Bank of India Act, 1934 (2 of 1934).

25.Allocation of surplus funds.-(1) The Authority may from time to time set apart such amounts as it thinks fit as a reserve or funds for the purpose of expanding existing facilities or services or creating new facilities or services at any airport, civil enclave heliport or airstrip of for the purpose of providing against any temporary decrease of revenue or increase of expenditure from transient causes or for purpose of replacement or for meeting expenditure arising from loss or damage from fire, cyclone, air-crash or other accident or for meeting any liability arising out of any act or commission in the discharge of its functions under this Act:

Provided that without prejudice to the right of the Authority to establish specific for one or more specific purpose, the Authority shall also have the power establish a general reserve:

Provided further that the sums set apart annually in respect of each or any of the specific and general reserves and the aggregate at any time of such sums shall not exceed such limits as may from time to time, be fixed in that behalf by the Central Government.

(2) After making provision for such reserve fund or funds and for bad and doubtful depreciation in assets and all other matters which are usually provided for by companies registered and incorporated under the companies Act, 1956, the Authority shall pay the balance of its annual net profits to the Central Government.

26.Submission of programme of activities and financial estimates.- (1) The Authority shall before the commencement of each financial year prepare a statement to the programme of its activities during the forty coming financial years as well as financial estimate in respect thereof.

(2) The statement prepared under sub-section (1) shall not less than unary months before the commencement of each financial year, be submitted for approval to the Central Government.

(3) The statement and the financial estimates of he authority may with the approval of the Central Government be revised by the Authority.

27.Borrowing powers of the Authority.- (1) The Authority may with the consent of the Central Government or in accordance with the terms of any general or special authority given to it by the Central Government borrow money from any source by the issue of bonds debentures or such other instruments as it may deem fit for discharging all or any of its functions under this Act.

(2) The Central government may guarantee in such manner as it thinks the repayment of the principal and the payment of interest thereon with respect to the loans borrowed by the Authority under sub-section (1).

(3) Subject to such limits as the Central Government may from time to lay down, the Authority may borrow temporarily by way of overdraft or otherwise such amounts as it may required for discharging its functions under this Act.

28.Accounts and audit.- (1) The Authority shall maintain proper accounts and other relevant records and prepare and annual statement of accounts including the profit and loss account and the balance-sheet in such form as may be prescribed by the Central Government in consultation with the Comptroller and Auditor-General of India.

(2) The accounts of the authority 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 authority 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 authority 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 account and in particular shall have the right to demand the production of books accounts connection vouchers, documents and papers and inspect any of the officers of the Authority.

(4) The accounts of the Authority 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 same to be laid before both Houses of Parliament.

CHAPTER VI
MISCELLANEOUS

29.Submission of annual report.- (1) The authority 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 that financial year and the report shall also give an account of the activities which are likely to be undertaken by the authority during the next financial year.

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

30.Delegation.- The Authority may, by general or special order in writing delegate to the Chairperson or any other member or to any officer of the Authority, subject to such conditions and limitations if any as may be specified in the order such of its powers and functions under this Act (expect the powers under section 42) as it may deem necessary.

31.Authentication of orders and other instruments of the authority.- All orders and decisions of the authority shall be authenticated by the signature of the Chairperson or any other member authorised by the authority in this behalf and all other instruments exceeded by the authority shall be authenticated by the signature of an officer of the authority authorised by it in this behalf.

32.Officers and employees of the authority to be public servant.- All officers and employees of the Authority shall, while acting or purporting to act in pursuance of the provisions of this Act or of any rule or regulation made thereunder be deemed to be public servants within the meaning of section 21 of the Indian Penal Code.

33.Protection of action take of good faith.- No suit, prosecution or other legal proceeding shall lie against the authority or any member or any officer or other employee of the authority for anything which is in good faith done or intended to be done in pursuance of this Act or of any rule or regulation made thereunder of for any damage sustained by any aircraft of vehicle on consequent of any defect in any of the airports civil enlaces heliports airstrips aeronautical communication stations of other things belonging to or under the control of the authority.

34.custody and disposed of lost property.- subject to such regulations as the authority may make in this behalf the authority shall provide securing the safe custody and restoration of any property which while not in proper custody is found on any premises such premises.

35.Provisions relating to income tax.- for the purposes of the Income-tax Act, 1961 (43 of 1961) or any other enactment for the time being in force relating to income-tax or any other tax in income profits of gains the authority shall be deemed to be a company within the meaning of the Income-tax Act, 1961 and shall be liable to tax accordingly on its income profits and gains.

36.Power of the authority to undertake certain works.- The authority may undertake to carry out on behalf of any person any works or services or any class of works or services on such terms and conditions as may be agreed upon between the authority and the person concerned.

37.Power to issue directions.- (1) The Authority or any officer specially authorised by it in this behalf may form time to time, by order issue directions consistent with the provisions of the aircraft Act.1934 (22 of 1934)and the rules made thereunder, with respect to any of the matters specified in clauses (f) (h) (I) (j) (k) (m) (p) (qq) and (r) of sub-section 92) of section 5 of that Act, to any person or persons engaged in aircraft operations or using any airports Heliport, or civil enclave in any case where the authority or the officer is satisfied that in the interest of the security of India of for securing the security of the air-craft it is necessary to do so.

(2) every direction issued under sub-section 910 shall be complied with by the person or persons to whom such directions is issued.

(3) if any person wilfully fails to comply with any direction issued under this section, he shall be punishable with imprisonment for a term which may extend to six months or with fine may extend to five thousand rupees or worth both.

38.Power of the Central Government to temporarily divest the Authority of the management of any airport.- (1) If, at any time, he Central Government is of opinion that in the public interest it is necessary or expedient so to do , it may by order direct the authority to entrust the administration management or similar other functions or any airport heliport airstrip civil enclave aeronautical communication station or any other agency or department of any airport heliport airstrip or any other agency or department of any airport heliport airstrip civil enclave or aeronautical communication station with effect from such date and to such person as may be specified in the order and the authority shall be bound to comply with such direction:

Provided that before an order is made under this sub-section the authority shall be given a reasonable opportunity of being heard in the matter.

(2) where the management of any airport heliport airstrip civil enclave or aeronautical communication station or any other agency or department thereof is entrusted to any person specified under sub-section 91) (hereafter referred to in this section as the authorised person) the authority shall cease to exercise and discharge all its powers and functions under this Act in relation n to exercise and discharge all its powers and function under this Act in relation to such airport heliport airstrip or aeronautical communication station of any other agency or department thereof and such powers and function shall be exercised and discharged by the authorised person in accordance with the instructions of any which the Central government my give to the authorised person from time to time:

Provided that no such power or function as may be specified by the Central Government by a general or special order shall be exercised or discharged by the authorise person except with the previous sanction of the Central Government.

(3) An order made under sub-section 91) shall unless resigned be in operation for a period of six months from the date on which the management of the airport heliport airstrip civil enclave or aeronautical communication station or any other agency or department thereof is entrusted to the authorities person.

Provided that the Central government extend such period for a further period or periods not exceeding eighteen months.

(4) During the operation of an order made under sub-section (1), it shall be competent for he Central Government to issue from to time to time, such directions to the Authority as are necessary to enable the authorised person to exercise the powers and discharge the function of the Authority under thrice Act in relation to the airport, heliport airstrip civil enclave or aeronautical communication station or any other agency or department thereof the management of which has been entrusted to him and in particular to transfer any sum of money from the fund of the Authority to the authorised person for the management of the airport heliport airstrip civil enclave or aeronautical communication station or any other agency or department thereof and every such direction shall be complied with by the Authority.
(5) On the Caesar of operation of any made under sub-section 91) in relation to any airport, heliport airstrip, civil enclave or aeronautical communication station or any other agency or department thereof the authorised person shall cease to exercise and perform the powers and functions of the Authority under this Act in relation to such airport, heliport airstrip civil enclave or aeronautical communication station or any other agency or department thereof and the Authority shall continue to exercise and perform such powers and function in accordance with the provisions of this Act.

(6) On the cesser of operation of any order made under sub-section (1) in relation to any airport, heliport airstrip civil enclave or aeronautical communication station or any other agency or department thereof the authorised person shall hand over to the Authority any property (including any sum of money or other asset) remaining with him in connection with the management of such airport, heliport airstrip civil enclave or aeronautical communication station.

(7) Anything done or any action taken lawfully by the authorised person in relation to any airport, heliport airstrip, civil enclave or aeronautical communication station or any other agency or department thereof during he period operation of an order made under sub-section (1) shall be deemed to have been done or taken by the Authority and shall be binding on the Authority.

39.Power of the Central Government to supersede the Authority.- (1) If, at any time, the Central Government is of opinion-

(a) that on account of a gave emergency, the Authority is unable to discharge the function and duties imposed on it by or under the provisions of this Act, or

(b) that the Authority has persistently made default in complying with any direction issued by the Central Government under this Act or in the discharge of the functions and duties imposed on it by or under the provisions of this Act and as a result of which default the financial position of the Authority or the administration of any airport, heliport airstrip civil enclave or aeronautical communication station has deteriorated or

(2) that circumstances exist which render it necessary in the public interest so to do ,

the Central Government may, by notification in the Official Gazette, supersede the Authority for such period not exceeding six months as may be specified in the notification:

Provided that before issuing a notification under those sub-section for the reasons mentioned in clause (b) the Central Government shall give a reasonable opportunity to the Authority to show cause why it should not be superseded and shall consider the explanations and objections if any of the Authority.

(2) Upon the publication of a notification under sub-section (1) superseding the Authority,-

(a) all the members shall, as from the date of suppression vacate their offices as such;

(b) all the powers functions and duties which may, by or under the provisions of this Act, be exercised by or on behalf of the Authority shall until the Authority is re-constituted under sub-section (30 be exercised and discharged by such person or persons as the Central Government may direct;

(c) all property owned or controlled by the Authority shall, until he Authority is re-constituted under sub-section 93) vest in the Central Government.

(3) On the expiration of the period of supersession specified in the notification issued under sub-section 91) the Central Government may-

(a) extend the period of suppression for such further term not exceeding six months, as it may consider necessary; or

(b) re-constitute the Authority by fresh appointment and in such case the members who vacated their offices under clause 9a) of sub-section (2) shall not be deemed disqualified for appointment:

Provided that the Central Government any at any time before the expiration of the period of supersession, whether as originally specified under sub-section 91) or as extended under this sub-section take action under clause 9b) of this sub-section.

(4) The Central Government shall cause a notification issued under sub-section (1) and a full report of any action taken under the section and the circumstances leading to such action to be laid before both Houses of Parliament at the earliest opportunity.

40.Power of the Central Government to issue directions.- (1) Without prejudice to the foregoing provisions of this Act, the Authority shall in the discharge or its functions and duties under this Act, be bound by such directions on questions of policy as the Central Government may give in writing to it from time to time.

Provided that the authority shall as far as practicable be given opportunity to express its views before any direction is given under this sub-section.

(2) The decision of the Central Government whether a question is one of policy or not shall be final.

(3) The Central Government may, from time to time issue directions to the Authority regarding the discharge of any functions to it under clause (e) of sub-section 93) of section 12 and the authority shall be bound o comply with such directions.

41.Power to make rules.- (1) The Central Government may by notification in the Official Gazette make rules for carrying out the provisions of this Act.

(2) In particular and without prejudice to the generally of the foregoing power, such rules may provide for

(a) the period of notice as may be given by the Central Government to terminate the appointments of any part-time member of the Authority under clause (b) of proviso to subsection (a) of sections 5

(b) the conditions of service of the members of the Authority under sub-section (2) of section 5

(d) the provisions subject to which officers and other employees may be appointed by the authority and the category of officers to be appointed after approval of the Central Government under the proviso to sub-section (1) of section 12;

(e) the provision subject to which the Authority may manage the airports civil enclaves and aeronautical communication stations under sub-section 91) of section 12.

(f) the manner in which the Authority may invest its funds under clause (b) of sub-section (3) of section 24.

(g) the form in which the annual statement of accounts shall be prepared by the Authority under sub-section 91) of section 28.

(h) the form in which a report giving an account of its activities shall be prepared and submitted by the Authority to the Central Government under sub-section 91) of section 29 and

(i) any other matter which is to be or may be prescribed

42.Power to make regulations.- (1) The Authority may make regulations not inconsistent with this Act and the rules made thereunder to provide for all mutters for which provisions is necessary or expedient for the purpose of giving of effect to the provisions of this Act.

(2) without prejudice to the generality of the forgoing power such regulations may provide for

(a) the time and placed of the meeting of the Authority and the procedure to the followed for the transaction of business including the quorum at such meetings under sub-section 91) of section 8

(b) the conditions of service and the remuneration of officers and after employees to be appointed by the authority under clause (e) of sub-section (3) of section 12

(c) the construction of residential accommodation for the officers and other employees appointed by the Authority under clause (e) of sub-section (3) of section 12;

(d) the storage or processing go goods in any warehouse established by he authority under clause (g) of sub-section (3) of section 12 and the charging of fees for such storage or processing;

(e) the contracts or class of contracts which are to be sealed with the common seal of the Authority and the form and manner in which a contract may be made by the authority under sub-section (1) of section 21;

(f) the custody and retroaction of lost property and the terms and conditions under which lost property may be restored to the persons entitled thereto under section 345;

(g) the disposal of any lost property in cases where such property is not restored.

(h) securing the safety of aircraft vehicles and persons using the airport or civil enclave and preventing danger to the public arising from the use and operation of aircraft in the airport or civil enclave;

(i) preventing obstruction within the airport or civil enclave for its normal functioning;

(j) prohibiting the parking or waiting of any vehicle of carriage within the airport of civil enclave except at places specified by the Authority;

(k) prohibiting or restricting access to any part of the airport or civil enclave;

(l) preserving order within the airport or civil enclave and preventing damage to property therein;

(m) regulating or restricting advertising within the airport or civil enclave;

(n) requiring any person if so directed by an officer appointed by the Authority in this behalf to leave the airport or civil enclave or any particular part of the airport or civil enclave and

(o) generally for the efficient and property management of the airport or civil enclave.

(3) Any regulation made under any of the clause (h) to (o) (both inclusive) of sub-section 92) may provide that a contravention thereof shall be punishable within which may extend to five hundred rupees and in the case of a continuing contravention with an additional fine which may extend to twenty rupees for every day during which such contravention continues after conviction for the first such contravention.

(4) No regulation made by the authority under this section shall have effect until it has been approved by the Ventral government and published in the Official Gazette.

(5) Notwithstanding anything contained in this section the first regulations under this Act shall be made by the Central Government and shall have effect on being published in the Official Gazette.

(6) the first regulations framed under sub-section (5) shall remain in force until such time the Authority has made regulations and they are published in the Official Gazette.

43.Rules and regulations to be laid before Parliament.- Every rule and every regulation made under this Act shall be lid as soon as may be after it is made before each House of Parliament while it is in session or in two or more successive sessions and it before the expiry of the session immediately following the session or the successive sessions aforesaid both Houses agree in mailing any modification in the rule or regulation as the case may be or both Houses agree that the rule or regulation as the case may be should not be made the rule or regulation shall thereafter have effect only ion 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 rule or regulation

44.Power to remove difficulties.- (1) If any difficulty arises in giving effect to the provisions of this Act, the Central Government may by general or special order published in the Official Gazette male such provisions not inconsistent with the provisions of this Act as appear to it to be necessary expedient for the removal of the difficulty.

Provided that no such order shall be made after the expiration of one year from the commencement of this Act.

(2) Every order made under sub-section 91) 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 immediately following the session or the successive sessions aforesaid both Houses agree in making nay modification in the order or both Houses agree that the order should not be made the order shall thereafter have effect only in such modified form or be of nom effect as the case may be so however that a by such modification or annulment shall be without prejudice to the validity of anything previously done under that order.

45.Amendment of Act 22 of 1934.- In section 5 of the Aircraft Act, 1934 in sub-section 92)

(a) in clause (b) for the words and figures the International Airports Authority Act, 1971 (43 of 1971) of the National Airports Act, 1985 (64 of 1985) , the words and figures the Airports Authority of India Act, 1994 shall be substituted;

(b) proviso to clause (b) shall be omitted.

46.Repeal and saving.- On and from the appointed date.-

(i) the International Airports Authority Act, 1971 (43 of 1971) and the national Airports Authority Act.1985 (64 of 1985) shall stand repealed;

(ii) the International airports and the National Airports Authority constituted under the aforesaid Acts shall cease to exist.

(2) Notwithstanding such repeal anything done or any action taken or purported to have been done or taken under the aforesaid Acts so repealed shall in so far as it is not inconsistent with the provisions of this Act, the deemed to have been done or taken under the corresponding provision of this Act.

THE APPROPRIATION (No. 2) ACT, 1996

Legal India — Tue, 30 Jun 2009 10:51:12 +0000

BE it enacted by Parliament in the Forty-seventh Year of the Republic of India as follows:-

AN ACT to provide for the authorisation of appropriation of moneys out of the Consolidated Fund of India to meet the amounts spent on certain services during the financial year ended on the 31st day of
March,
1994 in excess of the amounts granted for those services and for that year.

1.Short title.

1. Short title. This is Act may be called the Appropriation (No. 2) Act, 1996.

2. Issue of Rs. 23,51,86,348 out of the Consolidated Fund of India to meet certain excess expenditure for the year ended on the 31st March 1994.

2. Issue of Rs. 23,51,86,348 out of the Consolidated Fund of India to meet certain excess expenditure for the year ended on the 31st March 1994. From and out of the Consolidated Fund of India the sums specified in column 3 of the Schedule amounting in the aggregate to the sum of twenty-three crores, fifty-one lakhs eighty-six thousand, three hundred and forty-eight rupees shall be deemed to have been authorised to be paid and applied to meet the amount spent for defraying the charges in respect of the services in column 2 of the Schedule during the financial year ended on the 31st day of March, 1994, in excess of the amounts granted for those services and for that year.

3.Appropriation.

3. Appropriation. The sums deemed to have been authorised to be paid and applied from and out of the Consolidated Fund of India under this Act shall be deemed to have been appropriated for the services and purposes expressed in the Schedule in relation of the financial year ended on the 31st day of March, 1994.

THE APPROPRIATION (No. 3) ACT, 2001

Legal India — Tue, 30 Jun 2009 10:49:09 +0000

An Act to authorise payment and appropriation of certain further sums from and out of the Consolidated Fund of India for the services of the financial year 2001-2002.BE it enacted by Parliament in the Fifty-second Year of the Republic of India as follows:-

1.Short title.

1. Short title.-This Act may be called the Appropriation (No. 3) Act, 2001.

2. Issue of Rs.3709,37,00,000 out of the Consolidated Fund of India forthe year 2001-2002.

2. Issue of Rs. 3709, 37,00,000 out of the Consolidated Fund of India for the year 2001-2002.-From and out of the Consolidated Fund of India there may be paid and applied sums not exceeding those specified in column 3 of the Schedule amounting in the ag regate to the sum of three thousand seven hundred and nine crores and thirty-seven lakh rupees towards defraying the several charges which will come in course of payment during the financial year 2001-2002 in respect of the services specified in column 2 of the Schedule.

3.Appropriation.

3. Appropriation.-The sums authorised to be paid and applied from and out of the Consolidated Fund of India by this Act shall be appropriated for the services and purposes expressed in the Schedule in relation to the said year.

THE APPROPRIATION (NO. 5) ACT, 1995

Legal India — Tue, 30 Jun 2009 10:47:22 +0000

Be it enacted by Parliament in the Forty-sixth Year of the
Republic of India as follows:-

An Act to authorise payment and appropriation of certain further sums from and out of the Consolidated Fund of India for the services of the financial year 1995-96.
1.Short title.

1. Short title. This Act may be called the Appropriation (No. 5)
Act, 1995.

2. Issue of Rs. 3332,25,00,000 out of the Consolidated fund of India for the year 1995-96.

2. Issue of Rs. 3332,25,00,000 out of the Consolidated fund of India for the year 1995-96. From and out of the Consolidated Fund of India there may be paid and applied sums not exceeding those specified in column 3 of the Schedule amounting in the aggregate to the sum of three thousand three hundred and thirty-two crores and twenty-five lakh rupees towards defraying the several charges which will come in course of payment during the financial year 1995-96, in respect of the services specified in column 2 of the Schedule.

3.Appropriation.

3. Appropriation. The sums authorised to be paid and applied from and out of the Consolidated Fund of India by this Act shall be appropriated for the services and purposes expressed in the Schedule in relation to the said year.

THE APPROPRIATION (RAILWAYS) No. 3 ACT, 1996

Legal India — Tue, 30 Jun 2009 10:34:56 +0000

BE it enacted by Parliament in the Forty-seventh Year of the
Republic of India as follows:-

An Act to authorise Payment and appropriation of certain sums from and out of the Consolidated Fund of India for the services of the financial year 1996-97 for the purposes of Railways.

1. Short title.

1. Short title. This Act may be called the Appropriation (Railways) No. 3 Act, 1996.

2. Issue of Rs. 40820,49,65,000 out of the Consolidated Fund of India for the financial year 1996-97.

2. Issue of Rs. 40820,49,65,000 out of the Consolidated Fund of
India for the financial year 1996-97. From and out of the Consolidated Fund of India there may be paid and applied sums not exceeding those specified in column 3 of the Schedule amounting in the aggregate [inclusive of the sums specified in column 3 of the Schedule to the Appropriation (Railway) Vote on Account Act, 1996] (6 of 1996) to the sum of forty thousand eight hundred and twenty crores, forty- nine lakhs and sixty-five thousand rupees towards defraying the several charges which will come in course of payment during the financial year 1996-97, in respect of the service relating to Railways specified in column 2 of the Schedule.

3.Appropriation.

3. Appropriation. The sums authorised to be paid and applied from and out of the Consolidated Fund of India by this Act shall be appropriated for the services and purpose expressed in the Schedule in relation to the said year.

THE APPROPRIATION (RAILWAYS) NO. 4 ACT, 1995

Legal India — Tue, 30 Jun 2009 10:32:36 +0000

BE it enacted by Parliament in the Forty-sixth Year of the
Republic of India as follows:-

An Act to authorise payment and appropriation of certain further sums from and out of the Consolidated Fund of
India for the services of the financial year 1995-96 for the purposes of Railways.

1. Short title.

1. Short title. This Act may be called the Appropriation (Railways) No. 4 Act, 1995.

2. Issue of Rs. 60,000 out of the Consolidated Fund of India for the financial year 1995-96.

2. Issue of Rs. 60,000 out of the Consolidated Fund of India for the financial year 1995-96. From and out of the Consolidated Fund of India there may be paid and applied sums not exceeding those specified in column 3 of the Schedule amounting in the aggregate to the sum of sixty thousand rupees towards defraying the several charges which will come in course of payment during the financial year 1995-96, in respect of the services relating to Railways specified in column 2 of the Schedule.

3. Appropriation.