SC to hear SpiceJet plea against HC order grounding engines

The Supreme Court on Thursday said that it will hear SpiceJets appeal against a recent Delhi High Court verdict that had directed the debtridden airline to ground three of its aircraft engines ldquodue to nonpayment of dues to its lessorsrdquoA bench comprising Chief Justice D Y Chandrachud and Justices J B Pardiwala and Manoj Misra suggested that SpiceJetrsquos counsel circulate an email seeking an urgent hearing on the matterThe order comes after the lowcost airline moved the apex court after the high court on Wednesday September 11 upheld its order to ground three of its engines citing missed payments as the primary reason The airline currently operates 21 aircraftDelhi HC verdictThe legal battle began after a singlejudge bench of the Delhi High Court on August 14 ordered SpiceJet to ground three of its aircraft engines by August 16 and return them to the lessorsmdashSunbird France 02 SAS and Team France 01 SAS The lessors had filed a case in December last year claiming dues of more than 20 million for the enginesSpiceJet had challenged the August 14 order of the singlebench judge However the high court division bench of Justices Rajiv Shakdher and Amit Bansal refused to interfere upholding the initial orderldquoThe airline had violated an interim payment agreement with the lessors and had failed to honor its financial commitments causing financial harm to both partiesrdquo the high court saidThe bench ruled ldquoThe record reveals SpiceJet is in default and past and current outstanding dues remain unpaid At the risk of repetition it must be stressed that SpiceJet has violated an agreed interim arrangement for payment of dues which included a term that upon breach would ground the engines that Team France and Sunbird France could then repossessrdquoldquoThe fact that the financial condition of SpiceJet is weak is evident from its conduct and the stand taken on its behalf in court that it is attempting to infuse funds through loans andor equity If the 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 engine lease agreementsrdquo the high court order addedThe high court further noted that SpiceJet continued to use the engines despite defaulting on payments raising concerns about the financial damage this could cause the lessorsThe bench remarked that allowing the airline to retain the engines without clearing its dues would result in significant losses for the lessors who would potentially lose both the engines and the compensation owed to themldquoThe right of SpiceJet to take all defences in the suit actions would include objections concerning jurisdiction and governing lawrdquo the high court saidFinancial troublesReacting to the verdict a SpiceJet spokesperson stated ldquoThe airline is currently reviewing the courtrsquos decisionrdquordquo emphasising that its flight operations remain unaffected However the ruling has brought to light SpiceJetrsquos ongoing financial struggles as the airline continues to grapple with unpaid duesThe court also recognised that SpiceJet is attempting to arrange funds through loans or equity to meet its financial obligations but warned that further delays could lead to additional losses for the lessors the spokesperson saidEarlier duesThe Directorate General of Civil Aviation the apex body of the Ministry of Civil Aviation recently placed SpiceJet under enhanced surveillance which meant that the airline was subjected to spot checks and nighttime audits by the aviation watchdogmid day had previously reported about the delays in payment of salaries of Spicejet pilots and the issues related to Provident Fund PF faced by the employees