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THE AIR CORPORATIONS ACT, 1953

Title : THE AIR CORPORATIONS ACT, 1953

Year : 1953



(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.

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1. The date appointed is 15-6-1953.
2. Re-named as 'Air India' w.e.f. 8-6-1962.

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1*[(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-A)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) That 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 2*[director] of either of the Corporations, the Central Government shall satisfy itself that 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 2 [director] of the Corporation arid the Central Government shall also, satisfy itself from time to time with respect to every 2*[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 had consented to be a 2*[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 2*[director] of either of the Corporations who is in anyway 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 2*[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 2*[director] of the Corporation or not, to act as the Chairman.

(5) Save as otherwise provided in this section, nothing contained in this Act shall be deemed to disqualify the 2*[managing director] of either of the Corporations from being appointed to be a 2*[director] thereof.

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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 "General Manager" in sub-section (5), substituted, by the Air Corporations (Amdt.) Act (49 of 1971), S. 2 (1-2-1972).

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(1) The Chairman and other 1*[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 1*[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.

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1. Word "members" in sub-section (1) and word "member" in the proviso to sub-section (1) and sub¬section (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).

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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.



(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 coordinated 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 Corpo¬ration 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 Corpo¬ration 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 therefore 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 exclu¬sively 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.

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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)

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(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 Corpora¬tions 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 inter¬est 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.

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

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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.

Last updated on July, 2016

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