SC to hear SpiceJet's plea against Delhi HC order grounding three aircraft engines

Although the SC did not give any particular date to hear the case, it added that the appeal will be listed soon for a hearing.
Supreme Court
Supreme Court
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NEW DELHI: The Supreme Court on Thursday said that it will consider listing SpiceJet's plea challenging a Delhi High Court verdict grounding three aircraft engines for default on payments to lessors.

A three-judge bench of the apex court, headed by Chief Justice of India (CJI) D Y Chandrachud and Justices J B Pardiwala and Manoj Misra, asked the lawyer of the airline to send an email for an urgent hearing.

The lawyer had mentioned the matter before the bench seeking urgent hearing of its plea against the high court verdict on September 11.

"Please circulate the e-mail," the CJI said. Although the SC did not give any particular date to hear the case, it added that the appeal will be listed soon for a hearing.

On September 11, the Delhi High Court upheld a ruling mandating budget airline SpiceJet to ground three of its aircraft engines due to overdue payments to 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. The 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 reinforces 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”.

The 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 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 of the appeal, the bench modified the judgment/order to a ‘limited extent’. 

“…the right of SpiceJet to take all defences in the suit actions would include objections concerning jurisdiction and governing law”, read the judgement.

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