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Informist, Thursday, Apr. 3, 2025

--Lok Sabha passes Protection of Interests in Aircraft Objects Bill, 2025

NEW DELHI – The Lok Sabha on Thursday passed the Protection of Interests in Aircraft Objects Bill, 2025, which seeks to give legal effect to certain international treaties for their application in India. The legislation aims to provide clarity and protection to both lessors and lessees in the aviation sector.

While responding to a discussion in the Lower House, Civil Aviation Minister Kinjarapu Rammohan Naidu said the main objective of the Bill is to give a push to the aircraft leasing industry. The ministry also said he was told by airlines that following enactment of this Bill, the leasing cost will be significantly reduced.

On Tuesday, the bill was passed by the Rajya Sabha.

The Bill will give legal effect to the Convention on International Interests in Mobile Equipment and the Protocol to the Convention on International Interests in Mobile Equipment on Matters specific to Aircraft Equipment. India had acceded to these treaties in 2008. 

"The Convention and Protocol aim to establish a uniform international legal framework for securing and enforcing rights in high-value mobile equipment, such as aircraft, airframes, engines, and helicopters, by facilitating asset-based financing, reducing creditor risk, and ensuring legal predictability in cases of default or insolvency," the bill states.

The Bill confers power upon the Directorate General of Civil Aviation to function as a registry authority for the implementation of the Convention and the Protocol. The bill makes it mandatory for debtors and creditors to notify the registry before exercising any remedy in case of default. It also provides several remedies to creditors, including the right to take back possession of the asset within a period of two calendar months or a period mutually agreed upon, whichever is earlier. End

Reported by Kuldeep Singh

Edited by Akul Nishant Akhoury

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