SpiceJet faces contempt notice if engines not returned to lessor by July 8

The Delhi High Court has warned SpiceJet of contempt if it fails to return three engines to TWC Aviation by July 8, noting the airline's significant debt

The Delhi High Court has issued a warning to low-cost carrier SpiceJet, threatening contempt action if the airline fails to return three aircraft engines to its lessor, TWC Aviation, by July 8. This decision was rendered by a division bench on Tuesday, as SpiceJet sought an extension to the original deadline of June 16, reported Moneycontrol.

The extension request arose from SpiceJet’s inability to find alternative aircraft engines, leaving the airline in a precarious position. 

Senior advocate Amit Sibal, representing SpiceJet, informed the court that the engines in question are currently installed in operational aircraft. 

He also emphasised the significant impact on the airline’s operations, highlighting that grounding these aircraft would disrupt travel for around 1,000 passengers daily. Sibal further assured the court that the engines would be returned if replacements did not arrive in time.

 

On the other hand, senior advocate Dayan Krishnan, representing TWC Aviation, argued that SpiceJet owed over Rs 120 crore to the lessor. He contended that the airline should not continue to monetise the engines without settling part of its dues and urged the court to direct SpiceJet to make a partial payment before using the engines further.

In response, the court advised TWC Aviation to file a proper application for such an order. Meanwhile, the bench issued a contempt notice to SpiceJet, stipulating that the notice would be void if the engines were returned by the deadline. The case is now scheduled for a hearing on July 9.

This development follows a previous refusal by the Delhi High Court on May 27 to stay a single judge’s order directing SpiceJet to return two aircraft and three engines to TWC Aviation. Although SpiceJet withdrew its appeal and pursued the matter before a single judge, the court had extended the deadline to June 16 from the initially planned May 28.

Justice Rajiv Shakder, leading the bench, said that it would be unjust to grant any relief to SpiceJet when it owed such a substantial amount to the lessor. He firmly stated that the airline could not use the aircraft and engines without paying the required lease amount, adding, “They [the lessor] are not in the business of charity,” said the court.

The single judge’s interim order on May 15 had already directed SpiceJet to return the aircraft and engines due to non-compliance with earlier payment deadlines. The court was particularly concerned about the airline having ‘cannibalised’ parts of the aircraft and engines, which significantly influenced its decision.