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Ministry of Law and Justice

Act nº 27 of 1953

  • Chapter I
  • Chapter II
  • Chapter III
  • Chapter IV
  • Chapter V
  • Chapter VI
  • Chapter VII
  • Schedules
  • Act nº 27 of 1953



[Act, No. 27 of 1953]

[28th May, 1953]


An Act to provide for the establishment or 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.

BE it enacted by Parliament as follows:--

Chapter I

Section 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 as the Central Government may, by notification" in the Official Gazette, appoint.

Section 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 (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 Inter-national Ltd., and "existing air company" means any of the existing air companies;

(vi) "prescribe" 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

Section 3. Incorporation of the Corporations

(1) With effect from such date as the Central Government may, by notification1in 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.

1. The date appointed is 15-6-1953.

2. Re-named as 'Air India' w.e.f. 8-6-1962.

Section 4. Constitution of the Corporation

1 [(1) Thegeneral superintendence, direction and management of the affairs and businessof each of theCorporations shall vest in a Board of directors which mayexercise all such powers and do all such acts and things as may be exercised ordone by theCorporationunder this Act.

(1-A)The Board of directors shall consist of a Chairman tobe appointed by the Central Government, and not less than eight and not morethan fourteenother directorsto be appointed by the Central Government and the Chairman or any other director may be required torender whole-time or part-time service as the Central Government may direct:

Provided that--

(a) that same person may be appointed to be theChairman of both the Corporationsor Chairman of one and director of the other;

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

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

(3) A2 [director]of either of theCorporationswho is in anyway directly or indirectly interested in a contract made orproposed 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 upfor consideration by the Corporation, shall, as soon as possibleafter 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 theminutes of theCorporation andthe 2 [director] shallnot take any part after the disclosure in any deliberation or decision of the Corporation with respect to thatcontract.

(4)During the temporary absence of the Chairman of either of the Corporations, the CentralGovernment may appoint anotherperson, whether a 2 [director] of the Corporation or not, to act as the Chairman.

(5) Saveas otherwise provided in thissection, nothing contained in this Act shall be deemed to disqualify the 2 [managing director] ofeither of theCorporationsfrom being appointed to be a 2 [director] thereof.

1.Original sub-section (1) substituted by the Air Corporations (Amdt.) Act (49 of 1971), S. 2 (1-2-1972).

2.Word "member" in sub-sections (2). (3), (4) and (5) and the words "GeneralManager" insub-section (5), substituted, by the Air Corporations (Amdt.) Act (49 of 1971), S. 2 (1-2-1972).

Section 5. Conditions of service of members

(1) The Chairman and other1[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 any1[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 every1[director] thereof in respect of his office as such,2[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 a1[directors] or otherwise, as it may similarly determine.

1. Word "members" in sub-section (1) and word "member" in the proviso to sub-section (1) and subsection (2), substituted by the Air Corporations (Amdt.) Act (49 of 1971). S. 3 (1-2-1972).

2. Substituted for the words "such remuneration by way of allowances", by the Air Corporations (Amdt.) Act (49 of 1971), S. 3(ii)(b) (7-2-1972).

Section 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.

Section 7. Functions of the Corporation

(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 3 commercial or other purpose, and to carry out all forms of aerial work;

(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 organisation 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 transportation 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;]

(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,2[including provision of catering, hotels, restaurants, restrooms,] goods-shed, ware-houses and transport by land or water in connection with any air transport service or any other amenity or facility;

3[(kk) to form one or more companies under the Companies Act, 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 forded 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.

1. Clause (ii) inserted by the Air Corporations (Amdt.) Act (49 of 1971), S. 4 (1-2-1972)

2. Words "including provision of catering, rest rooms" in cl. (k) substituted,' by the Air Corporations (Amdt.) Act (49 of 1971), S. 4 (1-2-1972)

3. Clause (kk) inserted, by the Air Corporations (Amdt.) Act (49 of 1971), S. 4 (1-2-1972)

Section 8. Appointment of officers and other employees of the Corporation

(1) For the purpose of enabling it efficiently to discharge its functions under this Act, each of the Corporations shall appoint a1[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 the1[managing director] and such other categories of officers as may be specified after consultation 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 the1[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.

1. Substituted for the words 'General Manager' by the Air Corporation (Amdt.) Act (49 of 1971), S. 5 (1-2-1972).

Section 9. Corporations to act on business principles

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

Chapter III

Section 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 issueof bonds, debentures, 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.

Section 11. Vesting of properties in the Corporation

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.