Indian-Air India merger row reaches SC

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National Aviation Company of India Ltd, the new entity formed after the merger of Indian and Air India, today moved the Supreme Court seeking consolidation of the cases challenging the merger of the two state carriers.

A bench comprising Justice S B Sinha and Justice H S Bedi issued notice to the Ministry of Corporate Affairs, Registrar of Companies, Indian Commercial Pilots Association, Indian Airlines Officers Association, Air Corporation Employees Union, Airlines Radio Officers and Flight Operation Officers Association, Air India, Indian and others.

The bench also stayed the proceedings pending before the Bombay High Court.

National Aviation had sought transfer of the petition pending before the Bombay High Court to the Delhi High Court so as "to avoid the multiplicity of proceeding and possible conflict of decisions."

According to National Aviation, the two other petitions by Indian Aircraft Engineers Association and Air India Cabin Crew Association were filed in the Delhi High Court prior to the petition by Trade Union Joint Action Committee of Indian Airlines Employees and others in the Bombay High Court.

The petitioners before the High Courts had challenged the constitutional validity of Section 620 of the Companies Act and issuance of Notification dated February 2, 1978 that conferred powers on the Centre to usurp the judicial functions assigned to the High Court and exempted merger of government companies from judicial scrutiny.

The Notification had also taken away the right to appeal against an order allowing any such merger.

While the three wholly-owened government companies – Air India, Indian Airlines and National Aviation - had passed their board resolutions in May 2007 approving the scheme of merger, the Ministry had approved amalgamation in August 22 this year.