Delhi High Court directs DGCA to deregister six aircraft leased to SpiceJet

New Delhi: In a blow to low-cost airline SpiceJet, Delhi High Court today directed the Directorate General of Civil Aviation (DGCA) to deregister six Boeing 737 aircraft given to the carrier on lease by some foreign firms.

An airline cannot operate an aircraft once it is deregistered by aviation regulator DGCA.

Justice Rajiv Shakdher directed DGCA to “forthwith” deregister the aircraft saying once the creditors fulfilled the conditions prescribed in Aircraft Rules, the aviation regulator was “mandatorily required to cancel registration”.

The court said the petitioner companies, AWAS Ireland Ltd and Wilmington Trust SP Services (Dublin) Ltd, had fulfilled the conditions stipulated in the rules, and therefore, DGCA had no discretion in the matter.

The court also said it “cannot interdict the process of de-registration on the nebulous ground of equity as it would be contrary to the provisions of the Cape Town Convention and Protocol, to which, India is a party”.

It also directed DGCA to decide within two weeks the companies plea for export of the aircraft out of the country and disposed of the pleas of the Irish firms.

Spicejet, which currently has 32 aircraft in its fleet, had argued that deregistration of the aircraft would impinge upon public interest.

The court rejected the contention, saying “there is as much if not more public interest in ensuring that treaty obligations are honoured, and that, the parties adhere to their respective contractual obligations”.

It also said the “argument that passages have been booked with Spicejet, does not improve the case put forth by the respondents (DGCA and airline) as this is a risk that every unsecured creditor will take vis-a-vis its transactions with the airline”.

“This interest cannot come in the way of a larger public interest, which is the obligation undertaken by the contracting State to honour its commitments under the Convention and the Protocol,” the court said.

The Irish firms had moved the court seeking directions to DGCA to deregister the aircraft given on lease to the airline as the aviation regulator had not carried out the exercise despite several representations by the firms.

The firms had said that they had sought deregistration of the aircraft as their lease with SpiceJet had been terminated due to alleged default in payment of lease rents by the airline.

The bench noted in its order that despite DGCA orders to SpiceJet to surrender the certificates of registration of the aircraft and deactivate the transponder codes of the planes, the airline “continued to disregard the directive”.

Reacting to the high court ruling, SpiceJet said it would take further course of action but only after evaluating the order. The airline also said that it was negotiating with the lessors for a mutual settlement to the case.

“We are studying the order, if so advised we will take matter to the higher judicial forum. Dialogues are on to settle the dispute amicably,” a SpiceJet spokesperson said in a statement.

Another bench of the high court has reserved its verdict on a plea of another Irish firm, B&B Air Acquisition, to ground five aircraft leased by it to SpiceJet till registration of the planes was cancelled by DGCA.

PTI