Air India engineers' body opposes merger, moves HC

NEW DELHI: The Air India Aircraft Engineers’ Association has moved the Delhi High Court challenging merger of the Air India and Indian Airlines with the National Aviation Company.

In its petition filed through advocate ML Lahoty, the association has said its member employees are the creditors of Air India and Indian Airlines (transferor companies). Their consent to the terms of the scheme of amalgamation is mandatory under provisions of Section 391 of the Companies Act, 1956.

As their consent has not been obtained, the scheme of amalgamation suffers from serious legal infirmity, said the petitioner association. The petitioner has said although the talk of amalgamation was going on for quite some time, but its members, despite being important stakeholders as well as creditors of the transferor companies, were kept totally ignorant till July 19 when it became known to them through the advertisement which appeared in The Times of India. Against that, it has moved the authority designated to carry on the proceedings under Sections 391 and 394 of the Companies Act, the association said.

On August 7, the association told the designated authority that their members were creditors of the transferor companies. It had said in the scheme of amalgamation/merger, the aspects of their wage settlement and productivity linked incentives (PLI) and how the overdue and unpaid amount would be dealt with must necessarily reflect.

It was also submitted that before the final decision of merger, the key issues relating to the wage settlement arising out of the charter of demand for the period January 1, 1997 to December 31, 2006 needed to be implemented by the transferor/transferee companies.

But no substantial outcome of the litigation lying before the designated authority has come. Against this background, it was left with no choice but to approach the high court, said the petitioner.

The petition said the provisions of the scheme warrant the high court’s intervention under Section 559 of the Companies Act to hold the dissolution of the transferor companies as void and ineffective.