In its petition, the association alleged that the procedure followed by the Union Government for the merger was not proper and was illegal.
A new company, National Aviation Company of India Ltd was incorporated in March this year as promoter of the new brand and the merger would take two years to become effective.
A bench comprising Chief Justice M K Sharma and Justice Sanjeev Khanna, posted the case for final hearing on January 7.
Challenging the merger, advocate M L Lahoty contended that the Centre had delegated the power to decide merger to joint secretary
level officer in Ministry of Corporate Affairs, in violation of law.
Normally this power is exercised by Company Judge of the high court under section 391 and 394 of Companies Act, he submitted, adding that the right of appeal has also been taken away.
He also referred to the Supreme Court judgement in a case on HPCL and BPCL merger in which it held that companies incorporated by a statute of Parliament cannot be merged without approval of the legislative body.
Lahoty also brought to the notice of the court that Air India had backtracked from its commitment to pay arrears to the tune of Rs 350 crore (Rs 3.5 billion) due to the airline's engineers.
