New Delhi: Low-cost airline Spicejet has moved the Supreme Court against the Delhi High Court order directing it to ground three aircraft engines on default of payment to the lessors.
Spicejet plea was mentioned before CJI-headed bench for urgent listing
The matter was mentioned before a bench comprising Chief Justice of India (CJI) DY Chandrachud, Justice JB Pardiwala and Jjustice Manoj Misra seeking urgent listing of the plea. The bench said it will consider listing of the plea and asked the counsel to circulate an email.
High Court’s division bench refused to interfere with single bench order directing Spicejet to ground three aircraft engines
A division bench of the High Court on September 11 refused to interfere with a single bench order directing Spicejet to ground three aircraft engines on payment default to the lessors – Team France 01 SAS and Sunbird France 02 SAS.
“The appeals are emblematic of the adage that fools create assets and wise men use them. The use of a lessor’s assets without recompense, on agreed terms, by the lessee often leads to consequences which disrupt the interests of both sides,” the division bench said while refusing to interfere with the single bench order.
SpiceJet has violated an agreed interim arrangement for payment of dues, division bench noted
A division bench comprising Justice Rajiv Shakdher and Justice Amit Bansal said that the record reveals that SpiceJet is in default, and past and current outstanding dues remain unpaid and SpiceJet has violated an agreed interim arrangement for payment of dues, which included a term that, upon breach, it would ground the engines that Team France and Sunbird France could then repossess.
“The engines being depreciable assets, they would be of little use to Team France and Sunbird France if they are used without recompense. The fact that the financial condition of SpiceJet is weak is evident from its conduct and the stand taken on its behalf in court, which is that it is attempting to infuse funds through loans and/or equity. If the position in which SpiceJet is at this juncture, Team France and Sunbird France could well end up both without its engines or the monies due under the engine lease agreements,” the division bench said and added, “Therefore, compensation in terms of money does not seem probable from the point of view of Team France and Sunbird France.”
What did the single bench say?
Spicejet had challenged before the division bench an August 14 order of a single bench directing Spicejet to ground three aircraft engines by August 16 and hand over the possession of the engines to the lessors within 15 days. The single bench also directed Spicejet to offer prior inspection of the engines to the lessors of the engines through their authorised representative at the Delhi airport within seven days.
“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 single bench said in its order.