Delhi HC upholds order allowing grounding engines leased to SpiceJet

The Delhi High Court on Wednesday upheld the single-judge bench order directing the grounding of three engines from Team France 01 SAS and Sunbird France 02 SAS and their return to the lessors.

The division bench rejected cash-strapped airline SpiceJet's plea, saying it did not agree with the single-judge order and asked the parties to settle.

The airline now has to ground planes with the leased engines unless it approaches the Supreme Court for relief. SpiceJet had told the court it operates 21 aircraft.

The division bench of the Delhi High Court was hearing SpiceJet’s appeal against a single-bench order grounding the three leased engines from French companies Team France 01 SAS and Sunbird France 02 SAS.

 

The cash-strapped airline told the court in the last hearing that it would make an additional payment of $1.6 million along with monthly instalments of $1 million by September 30.

The airline's counsel said that as of August 12, there is an admitted default to the extent of $2.67 million towards the outstanding amount and sought an extension of time until September 30 to clear the dues. He also said that they have plans to raise $357 million.

The lessors had filed a case against SpiceJet in December, claiming dues of more than $20 million for the engines.

However, the court came down on the airline, saying that if they had the financial means to pay, the airline wouldn’t be defending itself in court.

“You are using someone else’s property, and you can’t use it without paying the rent. He’s (lessor) in the business of letting out that property, whether it’s an engine today or a house. Which court allows you to use property without paying?" the court said.

The court also highlighted the other mounting troubles for the airline, pointing out its failure to pay salaries to employees.

In the last hearing, the court had told SpiceJet to confirm if their directors would pledge personal guarantees to pay engine lessors for three engines.

"If the company alone is liable and it has no money, then perhaps your directors should provide personal guarantees. Otherwise, it seems the directors themselves have no faith in the money coming in," the court remarked.

Coming down on the cash-strapped airline, the court said, "You’ve been repeatedly giving undertakings to the court. If you’re not in a position to pay, then you should ground these engines. Why are you using them if the company is unable to pay?"

“Our operations continue as normal and remain completely unaffected. We are currently reviewing the court order," a SpiceJet Spokesperson said.