No relief for SpiceJet, Delhi High Court upholds grounding of 3 engines

The division bench of Justices Rajiv Shakdher and Amit Bansal, while upholding the single-judge bench’s verdict, prefaced its judgement, “The above-captioned 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 reiterated that SpiceJet “is in default, and past and current outstanding dues remain unpaid”.

“At the risk of repetition, it must be stressed that 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…engines being depreciable assets, they would be of little use to Team France and Sunbird France if they are used without recompense,” it said.

“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 (their) engines or the monies due under the engine lease agreements. Therefore, compensation in terms of money does not seem probable from the point of view of Team France and Sunbird France,” the court recorded while not granting any relief for SpiceJet.