Changes introduced by the BVV:

The Aircraft Act, which sought to regulate the manufacture, possession, use, operation, sale, import, and export of aircraft had been amended several times. While the BVV largely retains the provisions of the Aircraft Act, it re-organizes them and attempts to modernise the legislation by consolidating such amendments. Some of the key changes introduced by the BVV include:

1. Scope of preamble widened: The preamble in the BVV broadens the scope of the Act from mere “control” to “regulation and control.” Further, while the Aircraft Act focused on aspects such as “manufacture, possession, use, operation, sale, import, and export of aircraft”‘, the BVV also includes “design”‘ and “maintenance” in the preamble. Moreover, the preamble also accounts for “matters connected therewith or incidental thereto”allowing the BVV to also address any ancillary and emerging issues.
2. New Definitions introduced and streamlined: The BVV introduces three new definitions viz:(a) ‘design’; (b) ‘maintenance’; and (c) ‘manufacture’ which were not defined in the erstwhile regime. In fact, while the Aircraft Act used the term ‘manufacture‘, it was not a defined term. By defining these terms, the BVV addresses potential ambiguities and aims at regulating all stages of an aircraft’s life cycle. Moreover, the BVV also amends the definition of ‘aircraft’ in line with concepts in aviation hubs such as Ireland and Singapore.
3. ‘State of Design’ status: A ‘State of Design’ in aviation parlance, refers to a country which is responsible for the design, approval and certification of an aircraft. A ‘State of Registry’, on the other hand, is a country in whose registry the aircraft is registered, and which ensures that the airworthiness of an aircraft is maintained. Given, that aircraft may be designed in one State and ultimately be used for operations in another, the State of Design and State of Registry are usually not the same. The International Civil Aviation Organization – of which India is also a member – outlines distinct responsibilities for a State of Design and a State of Registry. While India has traditionally functioned as a ‘State of Registry’, the BVV aims at transitioning India’s status to a ‘State of Design’ as well.The BVV defines the term ‘design’ under Section 2(6) as “the set of data and information that defines the configuration of an aeronautical product type, its associated parts, and appliances for the purpose of airworthiness determination“. Section 10 of the BVV also empowers the Central Government to make rules on the ‘design’ of aircraft.^[1]The introduction of the term ‘design’ in the BVV helps positioning India as a ‘State of Design’ in the future.
4. Increased focus on the maintenance, repair and overhaul (“MRO”) industry: The BVV has introduced the term ‘maintenance’, and defined it broadly, to include activities such as the overhaul, inspection, replacement, defect rectification, and repair of an aircraft, engine, propeller or associated part.^[2]The BVV also empowers the Central Government to make rules on the ‘maintenance’ of aircraft.^[3]The MRO industry in the aviation sector is expected to become a USD 4 billion industry by 2030.^[4] By defining the term ‘maintenance’ the BVV aims at providing regulatory certainty to this industry.
5. Revisions in the appeal mechanism: The Aircraft Act enabled any person aggrieved by an order of a ‘designated officer’^[5]imposing penalty for any contravention of the Aircraft Act or rules thereunder to prefer an appeal to an ‘appellate officer’.^[6] This mechanism now been modified by introduction of a two-tier mechanism under Section 33 of the BVV. An appeal may initially be preferred against an order before the ‘First Appellate Officer’ and subsequently before the ‘Second Appellate Officer’. Moreover, such an appeal can also be preferred against an order for suspension, cancellation or imposition of restrictions on a license, certificate or approval under the BVV’^[7]– a departure from the Aircraft Act, where an appeal was only allowed against orders for imposition of penalty.The BVV also clarifies that appeals against any order of the DGCA or the Director General of the Bureau of Civil Aviation Security (“DGBCAS”) lie directly to the Central Government and no further appeal lies against any order passed by the Central Government.^[8] Further, while the BVV retains the timeline of 30 days to file an appeal under Section 33, it also allows the 30 day period to be extended, for reasons recorded in writing, by a period not more than 30 days.^[9] Thus, any delays in filing appeals are now condonable, subject to the statutory limit of the additional 30 days.
6. License process for radio communication: The BVV lays \down that rules may be prescribed by the Central Government on the certification and licensing of personnel engaged in radio communication.^[10]The Radio Telephone Operator (Restricted) Certificate and License (“RTOC”) is a sine qua nonfor pilots and other aviation personnel handling radio communication and equipment on an aircraft. Prior to the BVV, the process of issuance of RTOCs was handled by the Department of Telecommunications. The BVV shifts this responsibility to the DGCA, with a view to ensuring a single window clearance for all aviation personnel to secure their certificates and licenses from one authority.The process of shifting the responsibility of the RTOC certification process to the DGCA is a response to the allegations of rampant corruption in the issuance of these licences.^[11] By centralizing the process under the DGCA, the government aims to ensure transparency and improve efficiency in the certification process.
7. Recognition of India’s obligations under International Conventions: One of the key features of the BVV is the recognition to India’s obligations under the International Telecommunication Convention (in relation to the issuance of RTOC). The BVV enables the Central Government to formulate rules necessary to fulfil India’s obligations under this convention.^[12]
8. Expanded powers of the Central Government: The BVV adds new provisions to the effect that the Central Government can, on any contravention of the provisions of the Act, ‘suspend’, ‘cancel’ or ‘impose restrictions’ to any license, certificate or approval granted under the Act.^[13]Further, the Central Government is empowered to additionally frame rules in relation to the following : (a) directions for carrying out security oversight functions by the DGCA^[14] and the DGBCAS^[15]; and (b) determination of monetary penalty to be levied under the BVV.^[16]

One persistent concern is that the BVV has failed to appropriately address the role of the DGCA. The DGCA still continues to operate under the powers of the Central Government and functions primarily as a government unit, unlike other independent regulators in the telecom or insurance sector. For instance, the BVV retains provisions of the Aircraft Act – which allows the Central Government to issue directions to the DGCA to rescind or modify any order passed if it considers it “necessary or expedient so to do in the public interest“,^[17] raising valid concerns about the DGCA’s neutrality and independence.

Conclusion:

India’s aviation sector has faced a series of eventful years, with the insolvency of GoAir and Jet Airways. The courts have had to step in on several occasions, to fill lacunae in the Aircraft Act, and provide relief to Indian and foreign entities involved with the aviation industry. With the airline industry reaching a near duopoly in the domestic market, the government has increased its focus on adopting a legislative framework that can support a competitive market.

With the current focus on developing domestic capabilities for manufacturing aircraft, and the initiative to develop the GIFT City as a competitive aircraft leasing hub; the BVV is a step in implementing a robust legislative framework to support a developing industry. In the medium term, it is hoped that the Protection and Enforcement of Interests in Aircraft Objects Bill, 2022 (which inter alia codifies the rights of lessors of aircrafts and equipment, in accordance with India’s international obligations), will also be enacted soon.

In the face of the rising focus on the Indian aviation sector, the changes brought about by the BVV are a step in the right direction. By simplifying and modernising India’s main aviation law, the BVV serves as a critical step to the government’s ongoing efforts to enhance India’s position as a global aviation.

Footnote

[1] Section 10(1) and Section 10(2)(g), BVV.

[2] Section 2(10), BVV.

[3] Section 10(1) BVV.

[4] India Aims to become Leading Aviation Hub with $4 Billion MRO Industry by 2030 – Union Minister Shri Rammohan Naidu, Ministry of Civil Aviation, (July 15, 2024) available at https://pib.gov.in/PressReleaseIframePage.aspx?PRID=2033474#:~:text=The%20Indian%20MRO%20industry%20is,%2C%20and%20ensuring%20sustainable%20growth.%22.

[5] As per Section 10A(2) of the Aircraft Act, the Central Government may appoint such officers not below the rank of Deputy Secretary to the Government of India or equivalent as ‘designated officers.’

[6] Section 10A(5), Aircraft Act.

[7] Section 19(2), BVV.

[8] Section 33(5) and Section 33(6), BVV.

[9] Proviso, Section 33(7), BVV.

[10] Section 10(2)(m), BVV.

[11] Rahul Gul, Ministry’s examiners harass aspiring pilots, DGCA must act to preempt mishaps: Pilots’ body, National Herald (January 13, 2023) available at https://www.nationalheraldindia.com/india/ministrys-examiners-harass-aspiring-pilots-dgca-must-act-to-preempt-mishaps-pilots-body

[12] Section 11(2), BVV.

[13] Section 19(2), BVV.

[14] Section 10(zf)), BVV.

[15] Section 10(zg), BVV.

[16] Section 10(zh), BVV.

[17] Section 9(1), BVV.

This article was originally published in Mondaq on 23 December 2024 Co-written by: Meghna Rajadhyaksha, Partner; Avantika Mehndiratta, Associate. Click here for original article

Read Less-