On Thursday(12th Sept), Chief Justice D Y Chandrachud instructed the airline’s counsel to request an urgent hearing via email concerning the high court’s September 11 decision.
Delhi: Low-cost airline SpiceJet filed an appeal with the Supreme Court against a Delhi High Court ruling that required the grounding of three of its aircraft engines due to unpaid dues to lessors.
On Thursday(12th Sept), Chief Justice D Y Chandrachud instructed the airline’s counsel to request an urgent hearing via email concerning the high court’s September 11 decision.
READ ALSO: Delhi HC Upholds Order Directing SpiceJet to Ground Three Engines Over Payment Default
The Delhi High Court’s division bench determined that SpiceJet breached a temporary payment arrangement and affirmed a single judge’s order for the grounding of the engines.
On August 14, the single judge bench of the high court ordered SpiceJet to ground three engines by August 16 and return them to their lessors, Team France 01 SAS and Sunbird France 02 SAS.
SpiceJet had recently filed an appeal to challenge the initial court order, which directed the airline to ground three engines and return them to their respective lessors.
The Division Bench, comprising Justices Rajiv Shakdher and Amit Bansal, found “no suitable reason” to interfere with the single judge’s order, thereby upholding the directive for SpiceJet to comply with the engine grounding.
“The court finds no compelling reason to interfere with or reverse the previous order.”
-stated the bench, reinforcing the judgment passed earlier in the case.
The original order, which has now been reaffirmed, was passed on August 14, 2024, by Justice Manmeet Pritam Singh Arora. The directive clearly instructed SpiceJet to ground the three engines by August 16, 2024, and to return them to their lessors, Team France 01 SAS and Sunbird France 02 SAS, within a specified period of 15 days.
In her detailed order, Justice Arora emphasized the urgency and importance of safeguarding the lessors’ interests, particularly as aircraft engines are assets that depreciate over time.
“The defendant is in default and does not have the legal or contractual right to continue using the engines.”
-stated Justice Arora in her ruling.
She further noted that allowing SpiceJet to continue using the engines without clearing its outstanding dues would exacerbate the financial strain on the plaintiffs.
Justice Arora emphasized that the continued use of the engines by SpiceJet was causing significant harm to the lessors, who had no other recourse but to seek legal intervention. The engines, being high-value assets that suffer depreciation and wear and tear, are at risk of further damage the longer they are used without adequate payment.
“The defendant’s inability to pay the admitted outstanding dues is clearly evident from the record, and allowing them to continue using the engines without payment would only worsen the financial hardship for the plaintiff.”
-said the court.
The judge further remarked that the balance of convenience clearly tipped in favor of the plaintiffs.
“The balance of convenience is against the defendant and in favor of the plaintiff,”
-said Justice Arora, justifying the court’s decision to order the immediate grounding and return of the engines.
The airline, once considered one of India’s leading low-cost carriers, has been facing severe cash flow issues, leading to a backlog of payments to various creditors, including its engine lessors.
In this particular case, the lessors, Team France 01 SAS and Sunbird France 02 SAS, had approached the Delhi High Court, claiming that SpiceJet owed them several million dollars. These payments were due under the terms of their leasing agreements for the aircraft engines, which the airline had been using for its operations.
The court was sympathetic to the plight of the lessors, acknowledging that they were suffering “irreparable loss” due to the continued use of the engines by SpiceJet.
“The engines are a depreciating asset, which suffers wear and tear over time,”
– said the bench, reinforcing the importance of the swift return of the engines.
In addition to ordering the grounding of the engines, the Delhi High Court also directed SpiceJet to ensure that the lessors had access to the engines for inspection purposes. SpiceJet was instructed to facilitate inspection of the engines by the plaintiffs’ representatives at Delhi Airport within seven days of the ruling.
The court also directed the airline to provide necessary passes to the authorized representatives of Team France 01 SAS and Sunbird France 02 SAS so that they could conduct a thorough examination of the engines and assess their condition.
“The court directs SpiceJet Ltd to permit the plaintiffs to inspect the engines at Delhi Airport within seven days.”
– the court ordered.
This inspection was deemed crucial to ensuring that the lessors were not further disadvantaged by the airline’s continued use of the engines.
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