Section 3 in The Air Corporations (Transfer of Undertakings and Repeal) Act, 1994

Title: Undertakings of corporations to vest in companies

Description: On such date as the Central Government may, by notification in the Official Gazette, appoint, there shall be transferred to, and vest in,-- (a) Indian Airlines Limited, the undertaking of Indian Airlines; and (b) Air India Limited, the undertaking of Air India.

Title: General effect of vesting of undertakings in the companies

Description: (1) The undertaking of a corporation which is transferred to, and which vests in, a company under section 3 shall be deemed to include all assets, rights, powers, authorities and privileges and all properties, movable and immovable, real or personal, corporeal or incorporeal, in possession or reservation, present or contingent, of whatever nature and wheresoever situate, including lands, works, workshops, aircrafts, cash balances, capital reserves, reserve funds, investments, tenancies, leases and book debts and all other rights and interests arising out of such property as were immediately before the appointed day in the ownership, possession or power of that corporation in relation to its undertaking, whether within or outside India, all books of account and documents relating thereto and shall also be deemed to include all borrowings, liabilities and obligations of whatever kind then subsisting of that corporation in relation to its undertaking. (2) All contracts and working arrangements subsisting immediately before the appointed day and affecting a corporation shall, in so far as they relate to the undertaking of that corporation, cease to have effect or to be enforceable against that corporation and shall be of as full force and effect against or in favour of the company in which the undertaking has vested by virtue of this Act and enforceable as fully and effectually as if, instead of the corporation, the company had been named therein or had been a party thereto. (3) Any proceeding or cause of action pending or existing immediately before the appointed day by or against a corporation in relation to its undertaking may, as from that day, be continued and enforced by or against the company in which it has vested by virtue of this Act, as it might have been enforced by or against that corporation if this Act had not been passed, and shall cease to be enforceable by or against that corporation.

Title: Licences, etc., to be deemed to have been granted to companies

Description: With effect from the appointed day, all licences, permits, quotas and exemptions granted to a corporation in connection with the affairs and business of that corporation under any law for the time being in force, shall be deemed to have been granted to the company in which the undertaking of that corporation has vested.

Title: Tax exemption or benefit to continue to have effect

Description: (1) Where any exemption from, or any assessment with respect to, any tax has been granted or made or any benefit by way of set off or carry forward, as the case may be, of any unabsorbed depreciation or investment allowance or other allowance or loss has been extended or is available to a corporation under the Income-tax Act, 1961 (43 of 1961), such exemption, assessment or benefit shall continue to have effect in relation to the company in which the undertaking of that corporation has vested. (2) Where any payment made by a corporation is exempt from deduction of the tax at source under any provision of the Income-tax Act, 1961 (43 of 1961), the exemption from tax will continue to be available as if the provisions of the said Act made applicable to the corporation were operative in relation to the company in which the undertaking of that corporation has been vested. (3) The transfer and vesting of the undertaking or any part thereof in terms of section 3 shall not be construed as a transfer within the meaning of the Income-tax Act, 1961 (43 of 1961) for the purposes of capital gains.

Title: Guarantee to be operative

Description: Any guarantee given for or in favour of a corporation with respect to any loan or lease finance shall continue to be operative in relation to the company in which the undertaking of that corporation has vested by virtue of this Act.

The Air Corporations (Transfer of Undertakings and Repeal) Act, 1994