Payment Default
SpiceJet moves SC vs HC order to ground, return 3 engines to lessors
This story was originally published at 16:48 IST on 12 September 2024
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NEW DELHI – SpiceJet Ltd today moved the Supreme Court against the Delhi High Court's order asking the airline to ground three engines and return them to lessors, Team France 01 SAS and Sunbird France 02 SAS, for non-payment of dues. The Bench led by Chief Justice of India D.Y. Chandrachud asked the airline's counsel to circulate an email for urgent listing of the case.
"Please circulate the email," said Chief Justice Chandrachud, adding that the appeal may be listed. On Wednesday, the division bench of the high court had refused to interfere with its single-judge order of grounding the engines and returning them back. "We are not inclined to interfere with the order. The appeals are not entertained. I would urge your clients (SpiceJet) to settle this," the Delhi High Court Bench of Justices Rajiv Shakdher and Amit Bansal said.
On May 29, the single-judge bench of 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. The airline was required to pay this amount in four instalments, the court had said. The airline challenged the grounding and returning of the engines as it would impact operations.
Appearing for SpiceJet, advocate Amit Sibal had argued in the high court that the order would effectively lead to grounding of two of their planes. "We only have a fleet of 21 aircraft. The engines are to be grounded as of today. Each aircraft uses two engines so the order will effectively lead to grounding of two aircraft. It will cause public inconvenience. There are flights booked..." Sibal had said.
In December last year, the lessors had filed two suits seeking a permanent injunction against SpiceJet and its directors and employees from using the said engines any further. The lessors had also sought directions from the court to SpiceJet to hand over the engines to them and compensate them for the cost associated with their repossession as well as pay them the outstanding lease charges.
According to the single-judge order, the airline would have to make weekly payments of $160,000 to the lessors from Jun 8 to Sep 30. If the airline missed any payment, it would be liable to ground its three engines and return them to the lessors within 15 calendar days, the court had said. After making this payment, the court had directed the parties to discuss the payment plan for the outstanding $3.6 mln. The above interim arrangement will remain in place, and subject to its compliance, the airline will continue to use the engines, the single-judge bench had said.
On Jul 31, the lessors informed the court that SpiceJet had failed to comply with the order 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. Consequently, the single-judge ordered grounding of the three engines and asked SpiceJet to return them to the lessors. The airline had moved the division bench against this order.
SpiceJet shares closed 5.3% higher at 66.35 rupees on the BSE today. End
US$1 = 83.96 rupees
Reported by Surya Tripathi
Edited by Ashish Shirke
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