Delhi HC initiates contempt against SpiceJet as it fails to return engine to lessor

More trouble for SpiceJet from Delhi HC

A division bench of the Delhi High Court on July 9 issued a show cause notice to SpiceJet as to why contempt proceedings should not be initiated against it for non-compliance of its order asking it to return engines to its lessor TWC aviation.

"We are still warning you (SpiceJet), if you comply with the order in nine days, we will not go ahead with the contempt. If you don't we will proceed with the contempt proceedings," Justice Rajiv Shakder told SpiceJet's lawyer senior advocate Amit Sibal.

The case will now come up for hearing in nine days, SpiceJet has been asked to furnish a list of its directors to the registry of the high court in order to issue summons to them.

The court refused to budge to Sibal's requests not to initiate contempt. "We are not passing these orders just for the sake of it. You cannot suo motto modify them," the court said.

Sibal told the court that of the three engines that were to be returned, two have already been give. One airframe and one engine are ready to be returned anytime, he said. However the court was not convinced with this response and proceeded to go ahead with contempt.

On July 2, the court warned SpiceJet of contempt if it does not comply with its orders and return the air frames and the engines back to the lessors.

The order was passed in an application filed by SpiceJet seeking extension of time to till July 8 return the engines to the lessor as the airline could not find alternatives. The airline was earlier directed by the court to return them by June 16.

On May 27, Delhi HC refused to stay an order of a single judge of the court asking low-cost airline SpiceJet to return two aircraft and three engines to its lessor TWC aviation.

SpiceJet chose to withdraw the appeal and pursue the case before the single judge. However, the court granted the airline till June 16 to return the aircraft and engines, instead of May 28 that was planned earlier.

A bench led by Justice Rajiv Shakder noted that it would be unfair to grant any order of this sort when the airline owes the lessor over Rs 120 crore. According to the court, SpiceJet does not have the right to use the aircraft and engine without paying the requisite lease amount. "They (the lessor) are not in the business of charity," the court said.

On May 15, a single judge of the Delhi High Court passed an interim order directing the airline to return two aircraft and three engine to the lessor after the airline did not comply with earlier payment deadlines. The fact that the airline had 'cannibalised' the parts of the aircraft and engine weighed heavily with the court.