SpiceJet on Monday withdrew its plea against an order asking it to return two leased aircraft and three engines to TWC Aviation Capital Limited by Tuesday, as the Delhi High Court granted it time till June 17 to return the same to comply with the order.
The airline had filed an appeal against a May 15 order of a single-judge bench which had said that SpiceJet’s continued use of the airframes and engines without complying with the terms of the lease agreement would cause greater harm to the TWC than the inconvenience caused to the airline.
It had also noted that if the engines were not returned and properly serviced, the TWC would suffer “irreparable harm” as this could cause “irreversible damage to the engines” and the TWC would permanently lose its ability to monetise the engines. Against this order, the airline had filed an appeal before the division bench.
On Monday, senior advocate Amit Sibal appeared for the airline and after “taking instructions” from his client submitted before a division bench of Justice Rajiv Shakdher and Justice Amit Bansal that the airline would like to withdraw its appeal.
During the hearing, the division bench had said that it was not inclined to grant an interim order in favour of the airline and that if the airline withdrew its appeal, it would grant it some time to comply with the single judge’s order.
After some hearing, Sibal sought an extension of time for “compliance” with the May 15 order for “giving physical possession of the subject aircraft frames, engines, and technical records”.
At this stage, the bench said, “We may note that Mr Sibal says that the appellant-defendant (SpiceJet) would like to advance submissions in the pending suit although that would not come in the way of handing over physical possession of the subject aircraft, engines and technical records. Mr Sibal’s statement is taken on record. Appeal is dismissed as withdrawn.”
“The appellant defendant (SpiceJet) will hand over the subject aircraft, engines, and technical record on or before June 17,” the division bench added.
“I have taken instructions from the CEO specifically. They (SpiceJet) don’t want to interrupt operations of the aircraft, therefore he would need three weeks to replace the engines with other engines. so that those aircraft can remain flying. As my lords know there are advance bookings by customers and we don’t want to inconvenience them. That’s the difficulty. Engines are being fully maintained,” Sibal said.
Meanwhile, senior advocate Dayan Krishnan, appearing for international business aviation company TWC, said that as long as physical possession was given by the airline, the court may give some leeway for handing over the aircraft frames, engines, and records.
TWC sought enforcement of UK court orders
The TWC moved the single-judge bench earlier this year in a lawsuit seeking the enforcement of two orders passed by a United Kingdom court in March directing SpiceJet to return two Boeing 737-8K9 aircraft and three engines to the company. It sought a declaration that the UK court’s orders were valid and binding.
The single-judge bench took note of the UK court’s orders and observed, “Despite the (UK court) orders, it is stated that the Defendant (SpiceJet) failed to comply with the directions and was found to have removed the engines and used them in other aircraft, without permission, leading to further legal notices from the Plaintiff (TWC).”
As per the TWC, it entered into an agreement with SpiceJet on May 27, 2019, to lease the aircraft for 12 months at a basic monthly rent of $180,000, but the airline did not pay the rentals. The company further claimed that the airline breached even the various amendment agreements signed to accommodate payment difficulties due to the Covid-19 pandemic.
SpiceJet contended before the single-judge bench that the UK court’s order was not enforceable in a lawsuit as per Section 13 of the Code of Civil Procedure. Section 13 lists instances when a foreign judgment becomes inconclusive.
‘No reason to doubt validity of UK court judgment’
Perusing through the provision, the single-judge bench said that none of the conditions under Section 13 apply as the UK court is the competent court “in terms of the agreement between the parties”.
The bench also said that SpiceJet had fully participated in these proceedings and that there was “no reason” for the high court to hold that the UK court’s order could not be enforced in India.
“Even otherwise, when there are admitted dues, the Defendant (SpiceJet) cannot continue to enjoy the aircraft and the engines without making payments. In the present scenario, prima facie there is no material on record to doubt the validity of the order or judgement passed by U.K. court. Neither can it be said that the claims of the Plaintiff (TWC) are frivolous or vexatious. Further, it is the admitted position that the aircraft and engines are owned by the Plaintiff and the Defendant have failed to make payments as also breached the lease agreement,” the high court had said.
The single-judge bench also observed that SpiceJet had been given opportunities to make substantial payments to “prove its bona fides”. However, it said this “appeared to be not possible” for the airline considering its financial position and because the total dues claimed by the TWC were now over $14 million.
“This Court is of the opinion that, as it is, sufficient damage has been caused by separating the engines from aircraft. 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 dues are not forthcoming from the Defendant (SpiceJet). Under such circumstances, this Court has no option but to direct that the aircraft along with the engines along with all relevant records relating to technical condition and usage of aircraft shall be handed over to the Plaintiff by 28th May,” the single-judge bench had said.
On August 29, the DGCA had announced that it was placing SpiceJet under enhanced surveillance after the regulator found certain deficiencies during a special audit of the no-frills carrier’s engineering facilities in August. (File Photo) 
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