Delhi High Court orders status quo on AI-IA merger

The Delhi High Court has put on hold all further administrative decisions on the merger of Air India and Indian Airlines. On Thursday 20 September, the court sought a response from the central government on a petition challenging the merger.

A bench headed by Chief Justice MK Sharma heard arguments from the Cabin Crew Association of Air India, which has challenged the merger. It has directed the central government, Air India and Indian Airlines to file their responses by 30 October, when it will take up the matter for further hearing.

Senior advocate Arun Jaitley, who appeared for the association, argued that the merger of Indian Airlines and Air India was on a different footing from other mergers. These companies were incorporated by statute and can''t merged without amending the law, he said.

He referred to the Supreme Court judgment in the HPCL-BPCL merger case, in which it held that companies incorporated by a statute of parliament cannot be merged without approval of the legislative body.

"How can a joint secretary be empowered to take a decision on the merger of two separate companies incorporated under the law," Jaitley asked, challenging the notification issued by the government on the merger of the two state-run carriers.

Another petition filed by the engineers'' association of these carriers, seeking payment of wage arrears, will come up before the court on Friday. The petition questions how the two carriers were merged without first settling arrears owed to their employees.

The association alleged that Air India owed more than Rs350 crore in arrears of wages and other incentives, whereas Indian Airlines owed more than Rs1,100 crore to its employees.