HC refuses urgent listing of Spicejet's plea challenging grounding of three engines

New Delhi: The Delhi High Court on Friday refused to grant an urgent listing of low-cost airline Spicejet's plea challenging an order to ground three aircraft engines by today and hand those over to the lessors within 15 days.

The plea was mentioned for urgent hearing before a bench of Acting Chief Justice Manmohan and Justice Manmeet P S Arora. The bench said listing the plea during the day was not possible and it will be heard on August 20.

"It is very difficult to list it today. Several judges are on leave today. Let the learned judges read the papers (case documents). We will have it on Tuesday," the bench said.

Spicejet has challenged a single judge's August 14 order directing it to ground three engines by Friday and hand them over to their lessors within 15 days.

The judge had directed the airline to offer prior inspection of the engines to the lessors -- Team France 01 SAS and Sunbird France 02 SAS -- through their authorised representative at the Delhi airport within seven days.

Senior advocate Amit Sibal, representing Spicejet, insisted that the plea be heard in the post-lunch session of the court as there is grave urgency and the grounding of three engines would lead to the grounding of two aircraft.

This would cause grave inconvenience to passengers as flights would have to be cancelled and tickets are already booked, the counsel submitted, adding there are 21 aircraft with the airline.

To this, the bench said it is absolutely impossible to read the papers during the day and added, "Let the airline manage with 19 aircraft and we will have the matter on Tuesday".

In its order, the single judge said, "This court has no option but to direct the defendant (Spicejet) to ground the three engines with effect from August 16, 2024. The defendant will take steps to ensure that the engines are redelivered to the plaintiff within 15 days from today (August 14)".

The court had passed the order on pleas by the lessors seeking a direction to Spicejet to hand over the possession of three engines on termination of the lease agreements.

It was stated in the pleas that following the termination, the plaintiffs had directed the airline to ground and re-deliver the engines and pay all outstanding dues, but the carrier failed to do so.

"It 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 4.8 million and towards the weekly payments arising on account of the use of the Engines under the aegis of this court.

"The 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 said.

The single judge said that in view of the airline's unequivocal admissions qua its liability towards the lessors, the plaintiffs have made out more than a prima facie case for grant of reliefs sought in the interim applications for restraining the defendant from operating the three engines and issuing direction to it to ground the same for it to be redelivered to the plaintiff.

"This court also finds favour in the submission of the plaintiff that it is suffering irreparable loss due to continuing use of engines by the defendant as engines are depreciating assets which suffer wear and tear," the court had said.

It had added that Spicejet is a "defaulter and has no legal and contractual right to continue the use of the engines".

"The inability of the defendant to pay the admitted outstanding dues is writ large on the face of the record and in fact permitting the defendant to continue the use of the engines without payment would only cause financial distress to the plaintiff and therefore, the balance of convenience is against the defendant and in favour of the plaintiff,” the court had said.

It had directed the airline to take all precautions and compliances to ensure that the engines are redelivered to the plaintiffs in accordance with terms of lease agreements executed between the parties.

In its response to the applications, the airline's counsel had submitted that after filing the suit, the defendant made a payment of USD 7.18 million between December 14, 2023 and May 24, 2024.

The counsel had said that after the settlement terms were recorded before the court in May, the airline made a payment of USD 1.48 million and as of August 12, there is an admitted default to the extent of USD 2.67 million towards the outstanding amount.

He had said while the defendant admits that there has been a default, it was making its best endeavour to regularise these defaults and sought an extension of time until September 30 to clear the dues.