SC dismisses SpiceJet's plea against Delhi HC order grounding 3 aircraft engines

The Supreme Court on Friday approved an order of the Delhi High Court which directed the lowcost airline SpiceJet to ground three aircraft engines due to nonpayments to lessors PTI reportedAccording to PTI A bench comprising Chief Justice D Y Chandrachud and Justices J B Pardiwala and Manoj Misra dismissed the appeal filed by SpiceJet against the Delhi High Court verdict of September 11We will not interfere Its a correct order the bench saidAfter the SC order SpiceJet spokesperson said the company is currently in discussions to reach an amicable settlement with the aircraft lessorIt is important to note that two of the three engines in question are already grounded and our operations remain completely normal and unaffected We remain committed to ensuring seamless operations the SpiceJet spokesperson said to PTIA division bench of the High Court affirmed a singlejudge courts judgment directing the lowcost airline to halt the three engines owing to payment delinquency ruling that the carrier had breached an agreedupon temporary arrangement for payment of duesThe singlejudge bench of the Delhi High court on August 14 directed SpiceJet to ground three engines by August 16 and hand them over to their lessors Team France 01 SAS and Sunbird France 02 SASThe division bench of the high court had refused to interfere with an August 14 order of the singlejudge bench to ground the three aircraft engines and hand them over to the lessors and disposed of SpiceJets appeals against it PTI reportedSpiceJet challenged the August 14 order of the singlejudge benchThe appeals are emblematic of the adage that fools create assets and wise men use them The use of a lessors assets without recompense on agreed terms by the lessee often leads to consequences which disrupt the interests of both sides the high court had saidAccording to the high court SpiceJet was in default and there were still unpaid past and present outstanding debts This was evident from the recordsThe fact that the financial condition of SpiceJet is weak is evident from its conduct and the stand taken on its behalf in court which is that it is attempting to infuse funds through loans andor equityIt added the lessors might lose both their assets the engines and the money if they are stopped from using their contractual rights at this pointThe position in which SpiceJet is at this juncture Team France and Sunbird France could well end up both without its engines or the monies due under the enginelease agreements Therefore compensation in terms of money does not seem probable from the point of view of Team France and Sunbird France it had saidThe single judge had passed the order on pleas moved by the lessors asking SpiceJet to transfer ownership of the three engines upon the expiration of the lease agreementsAccording to PTI It was stated in the pleas that following the termination the plaintiffs had directed the airline to ground and redeliver the engines and pay all outstanding dues but the carrier had failed to do soIt is however clarified that the defendant will remain liable for making payments which it undertook in an order dated May 29 2024 towards the admitted outstanding of USD 48 million and towards the weekly payments arising on account of the use of the engines under the aegis of this courtThe return of the engines does not absolve the defendant from its liability for the payments which have admittedly fallen due and to that extent the plaintiff is entitled to recover the said amount from the defendant through execution of the order dated May 29 2024 the court had saidIt had said that SpiceJet is a defaulter and has no legal and contractual right to continue the use of the enginesIn its response to the applications the airlines counsel had submitted that after filing the suit the defendant made a payment of USD 718 million between December 14 2023 and May 24 2024The airlines attorney had stated in its response to the petitions that after filing the lawsuit the defendant paid USD 718 million between December 14 2023 and May 24 2024The airline paid USD 148 million after the settlement conditions were recorded in court according to the attorney and as of August 12 there was an acknowledged default to the tune of USD 267 million toward the remaining balanceHe had stated that although the defendant acknowledges that there has been a default it is attempting to make these defaults more regular and had requested an extension of time until September 30 to settle the outstanding balanceWith Inputs from PTI