Delhi HC Directs Spicejet To Handover Aircrafts, Engines With Relevant Records To TWC Aviation Over Its Inability To Pay Dues

The Court stated that Spicejet can't clear its dues considering its financial position as the total dues now claimed by TWC Aviation Capital Ltd. is over 14 million USD.

The bench of Justice Pratibha M. Singh observed, “…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 aircrafts shall be handed over to the Plaintiff by 28th May, 2024.”

Senior Advocate Ashish Dholakia appeared for the Appellant and Senior Advocate Sandeep Sethi appeared for the Respondent.

Brief Facts-

The Plaintiff TWC Aviation Capital is the owner of two Boeing aircraft as well as three Aircraft Engines. Plaintiff vide Aircraft Lease Agreement leased out the said aircraft with the engines for a term of 12 months with a basic rent of USD 180,000 per month. It is the case of the Plaintiff that the Defendant did not make the payment of the lease rentals and various amendment agreements were entered into to accommodate payment difficulties due to the COVID-19 pandemic. However, these amendments agreements were also breached by the Defendant.

When the notices to give undertaking which were issued to the defendant were not complied with, the plaintiff in terms of the jurisdiction clause in the Agreement, approached the High Court of Justice in England Wales, Court and instituted a suit against the Defendant.

Earlier the Court while seeking instructions as to how and in what manner Defendant intended to compensate/ return the engines to Plaintiff allowed TWC Aviation to take charge of the aircraft/frames even if without an engine.

To read earlier order click here….

The Court perused Section 13 CPC and observed that only if any of the conditions under Section 13 are satisfied that a foreign order or judgement is not enforceable. According to the Court, Defendant has fully participated in the said proceedings and there is no reason for this Court to hold that the said order cannot be enforced in India. Even otherwise, when there are admitted dues the Defendant cannot continue to enjoy the aircraft and the engines without making payments.

The Court further noted that Defendant’s continued use of airframes and engines without complying with the terms of the lease agreement would cause greater harm to Plaintiff than the inconvenience caused to Defendant.

As per the Court if the engines are not returned and properly serviced, the Plaintiff would suffer irreparable harm, as this could cause irreversible damage to the engines.

The Court stated that Defendant has had sufficient opportunity to clear the dues of Plaintiff.

The Court further stated that it had only, bearing in mind the fact that Defendant is running an airline that is operating several aircraft daily, given opportunities to the Defendants to make substantial payments to prove its bonafide. However, according to the Court, it appeared to be not possible for the Defendant.

“…the separation of engines from the aircrafts in this manner may not even be permissible in the opinion of this Court. The aircrafts frames and aircraft engines now being used separately would cause considerable reduction in the value of these aircrafts for the Plaintiff.”, the Court added.

The Court listed the matter for further hearing.

Cause Title: TWC Aviation Capital Ltd. v. Spicejet Limited (Neutral Citation: 2024: DHC: 4015)

Appearance:

Appellant: Sr. Adv. Ashish Dholakia, Adv. Ravi Nath, Adv. Ankur Mahindro, Adv. Rohan Taneja, Adv. Aditya Kapur, Adv. Vishali, Adv. Ankesh Tripathi, Adv. Yashika Arora, Adv. Abhijeet Mittal, Adv. Siddhant Vyas, Adv. Ankush Satija, Adv. Mohit Dagar, Adv. Rohit Bishnoi and Adv. Shubhangi Jain,

Respondent: Sr. Adv. Sandeep Sethi, Adv. K. R Sasiprabhu, Adv. Kartikeya Asthana and Adv. Shreya Sethi

Click here to read/download Judgment