Unpaid Dues
HC orders grounding of SpiceJet's engines by Fri on lessors' plea
This story was originally published at 18:59 IST on 14 August 2024
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--HC orders grounding of SpiceJet's engines by Fri on lessors' plea
--HC asks SpiceJet to return 3 engines to its lessors in 15 days
NEW DELHI – The Delhi High Court today ordered low-cost airline SpiceJet Ltd to ground by Friday its three engines on non-payment of dues to lessors, Team France 01 SAS and Sunbird France 02 SAS. The court said that SpiceJet should return the engines in 15 days to the lessors and necessary arrangements should be made for inspection of these engines.
This was after lessors on Monday rejected an offer by the airline's Chairman and Managing Director Ajay Singh to pledge to them his personal shares, equivalent to the airline's outstanding amount, to discharge the liability. The lessors said that they don't want "pledge of shares of a company whose existence is shaky" and hence the offer is not acceptable.
The counsel for the lessors had said that it would give 15 days to the airline to ground the three engines. On Aug 8, the court had asked SpiceJet if it was willing to submit a personal undertaking from the directors that if the airline was unable to pay the remaining amount to the lessors, they would pay the money from their pockets. The court had also asked the lessors to reply if they would accept the directors' undertaking or continue to seek grounding of engines for non-payment of dues.
On May 29, the high court had asked SpiceJet to pay $4.8 mln to the lessors as an interim arrangement to continue using their three leased engines. SpiceJet would pay the amount in four instalments to the lessors, the court had said.
In addition, the airline would make weekly payments of $160,000 to the lessors from Jun 8 to Sep 30. If the airline misses any payment, it will be liable to ground its three engines and return these within 15 calendar days, the court had said. After this payment, the parties will discuss the remaining plan of payment related to the outstanding $3.6 mln, it had said. The above interim arrangement will remain in place, and subject to its compliance, the airline will continue to use the engines, said the court.
In December, the lessors had filed two suits seeking a decree of permanent injunction restraining SpiceJet and its directors and employees from utilising the said engines any further. The lessors had also sought directions from the court to SpiceJet to hand over these engines to them and compensate them for the cost associated with their repossession and also pay them the outstanding lease charges.
On Jul 31, the lessors said SpiceJet had failed to comply with the statements given to the court and sought an injunction against the airline from operating the engines. SpiceJet accepted the default and said that the payment would be made till Aug 8. However, the airline did not make the payment.
Today, shares of SpiceJet closed 2.5% lower at 55.03 rupees on the BSE. End
US$1 = 83.95 rupees
Reported by Surya Tripathi
Edited by Ashish Shirke
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