The Delhi High Court today (September 11) refused to interfere with an order directing low-cost airline SpiceJet to ground three aircraft engines for defaulting on payment to engine lessors. A division bench of Justices Rajiv Shakdher and Amit Bansal said the appeals of SpiceJet challenging a single judge's order to ground three aircraft engines and hand those over to the lessors was accordingly not entertained.
"We are not inclined to interfere with the impugned order. The impugned direction has not been interfered with by us. The appeals are accordingly not entertained," the bench said while pronouncing its verdict on the appeals.
The judge had directed the airline to offer prior inspection of the engines to the lessors- Team France 01 SAS and Sunbird France 02 SAS- through their authorised representative at the Delhi airport within seven days.
In its order, the single judge had said, "This court has no option but to direct the defendant (SpiceJet) to ground the three engines with effect from August 16, 2024. The defendant will take steps to ensure that the engines are redelivered to the plaintiff within 15 days from today (August 14)".
The court had passed the order on pleas by the lessors seeking a direction to SpiceJet to hand over the possession of three engines on termination of the lease agreements. It was stated in the pleas that following the termination, the plaintiffs had directed the airline to ground and re-deliver the engines and pay all outstanding dues, but the carrier failed to do so.
"It is however clarified that the defendant will remain liable for making payments, which it undertook in an order dated May 29, 2024, towards the admitted outstanding of USD 4.8 million and towards the weekly payments arising on account of the use of the Engines under the aegis of this court.
"The return of the engines does not absolve the defendant from its liability for the payments which have admittedly fallen due and to that extent the plaintiff is entitled to recover the said amount from the defendant through execution of the order dated May 29, 2024," the court had said.
It had added that Spicejet is a "defaulter and has no legal and contractual right to continue the use of the engines". In its response to the applications, the airline's counsel had submitted that after filing the suit, the defendant made a payment of USD 7.18 million between December 14, 2023 and May 24, 2024.
The counsel had said that after the settlement terms were recorded before the court in May, the airline made a payment of USD 1.48 million and as of August 12, there is an admitted default to the extent of USD 2.67 million towards the outstanding amount.
He had said while the defendant admits that there has been a default, it was making its best endeavour to regularise these defaults and sought an extension of time until September 30 to clear the dues.
Single-judge bench on SpiceJet Airlines to ground 3 of its engines
Earlier, a single-judge bench of Justice Manmeet Singh Arora asked the debt-ridden airline to ground three engines by February 16, apart from taking steps to ensure that the engines are re-delivered to lessors within 15 days. Challenging the single-judge bench’s order, SpiceJet moved an appeal before the division bench of the Delhi High Court and prayed for an urgent hearing.
In his judgment, Justice Arora had observed, “The defendant (SpiceJet) is a defaulter and has no legal and contractual right to continue the use of the engines. The inability of the defendant to pay the admitted outstanding dues is writ large on the face of the record and in fact permitting the defendant to continue the use of the engines without payment would only cause financial distress to the plaintiff (lessors).”
Before this, SpiceJet was permitted to continue the use of the engines after it undertook before the Delhi High Court on May 29 that it would repay the outstanding lease amounts along with the weekly payments.
It clarified that the return of the engines does not absolve the airline from its liability of payments which have admittedly fallen due.
(With agencies inputs)
