Delhi HC refuses stay on order to SpiceJet for return of leased aircraft, engines

Set back for SpiceJet as Delhi HC asks it to return aircraft and engine

A two-judge bench of the Delhi High Court on May 27 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 17 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.

When SpiceJet asked for a week's extension to return the aircraft and engine, the court asked it to withdraw the appeal if they wish for this order, thus the airline chose to withdraw it.

During the course of the hearing, senior advocate Amit Sibal argued that SpiceJet was ready to pay $500,000 every week for the next five weeks. He contended that returning the aircraft and the engines will cause losses to the airline as it amounts to nearly 10 percent of its fleet. Sibal further argued that SpiceJet has thus far settled its dispute with 15 lessors/stakeholders so far and they will settle it with TWC as well.

Senior advocate Dayan Krishnan, who appeared for the lessor, argued that SpiceJet has not only paid the lease dues but has also removed parts from their aircraft, engine and used it in other aircraft they own. According to Krishnan, such an act is not permitted under the contract. He further argued that TWC has an order of an English court in their favour, which SpiceJet is yet to comply with.

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.

"This court is of the opinion that, as it is, sufficient damage has been

caused by separating the engines from aircrafts. The engines are being

separately used... The separation of engines from the aircraft in this

manner may not even be permissible in the opinion of this Court. The

aircraft frames and aircraft engines now being used separately would

cause considerable reduction in the value of these aircraft for the Plaintiff.

The dues are not forthcoming from the defendant," the court had said.

TWC had moved a plea earlier this year to execute an order of a UK court to return the aircraft and pay its earlier dues.