HC pulls up SpiceJet, seeks fresh affidavit on payments to engine leasing firm

Spicejet warned by Delhi HC

The Delhi High Court on December 19 asked a senior SpiceJet official, “who could be held accountable”, to give an undertaking, promising to stick to the schedule of payments to Engine Lease Finance BV.

Rejecting an affidavit filed by the airline’s general manager (legal), the court said that the document should be filed through a person who could be held accountable if the company fails to meet its payment obligations.

The case will now come up for hearing on December 21.

Engine Lease Finance BV moved the court last week, alleging that the low-cost airline had failed to make payments as agreed.

The lessor had alleged that SpiceJet only paid a part of the money and was yet to make complete payments as was agreed in October. The court said the airline couldn’t  go back on its words  and asked SpiceJet to file an undertaking to pay.

In October, the lessor and SpiceJet arrived at an interim settlement. The engine lessor agreed not to pursue the stay application against SpiceJet.

According to the terms of the settlement, SpiceJet must pay over $2 million to Engine Lease finance by January. SpiceJet also agreed to return an engine, which is the bone of contention, by January 25. The engine lessor is at liberty to approach the court if SpiceJet does not comply with these undertakings.

On September 27, Engine Lease Finance approached court that the firm terminated its lease with SpiceJet and the airline had returned eight of its nine engines. As per the agreement, the airline cannot continue using the engine once the lease is terminated. The lessor sought the court's order to restrain SpiceJet from using its engine.