NEW DELHI: The Delhi High Court on Wednesday upheld a ruling mandating budget airline SpiceJet to ground three of its aircraft engines due to overdue payments with French engine lessors.
A Division Bench, consisting of Justices Rajiv Shakdher and Amit Bansal, decided not to overturn the previous single-judge order issued on August 14.
This earlier decision had instructed SpiceJet to cease using the engines leased from two French companies following the airline's failure to meet its rental obligations. SpiceJet had contested this order, but the Division Bench's ruling reinforced the enforcement of the initial directive. The core issue revolved around SpiceJet’s failure to adhere to agreed-upon payment schedule for leased-out aircraft engines.
While pronouncing the judgement, the bench noted that “…The record reveals 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, would ground the engines that Team France and Sunbird France could then repossess”.
This ruling delivers a significant blow to SpiceJet, which has been grappling with financial challenges, including a high-profile legal battle over aircraft leases.
“….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”, observed the bench. However, while disposing off the appeal, the bench modified the impugned judgment/order to a ‘limited extent’. “…the right of SpiceJet to take all defences in the suit actions, which would include objections concerning jurisdiction and governing law”, read the judgement.
