Delhi HC Sets Final Deadline for SpiceJet to Return Engines, Warns Contempt Action

In a significant ruling, the Delhi High Court has issued a stern warning to SpiceJet, cautioning the low-cost carrier of possible contempt proceedings if it fails to return three aircraft engines to TWC Aviation by July 8. This decision escalates an ongoing legal tussle over aircraft lease obligations and unpaid dues amounting to over Rs. 120 crore.

The division bench, led by Justice Rajiv Shakder, expressed dissatisfaction with the airline’s request for an extension of the deadline, originally set for June 16. SpiceJet’s plea, which sought additional time until July 8 citing challenges in sourcing alternative engines, was met with a critical response from the court.

During the proceedings, Senior Advocate Amit Sibal, representing SpiceJet, highlighted the operational impact of the immediate engine return. “Grounding the aircraft abruptly would disrupt the travel plans of around 1,000 passengers daily,” Sibal explained. He reassured the court that the airline is prepared to comply by grounding the planes and returning the engines should the replacements not arrive in time.

Conversely, Senior Advocate Dayan Krishnan, appearing for TWC Aviation, underscored the financial strain faced by the lessor due to SpiceJet’s delayed payments. Krishnan urged the court to mandate a partial payment of the overdue amount before further use of the engines, a request the court decided requires a formal application.

The court’s decision to push the final hearing to July 9, pending the return of the engines, intensifies the pressure on SpiceJet to resolve the issue promptly. This legal standoff began when a single judge of the Delhi High Court, on May 15, directed the return of two aircraft and three engines following the airline’s failure to meet payment deadlines and the unauthorized use of parts from the leased equipment.

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This ruling reiterates the court’s earlier stance from May 27, when it declined to stay a previous order, emphasizing that SpiceJet must fulfill its financial obligations to retain the use of the leased assets. “They (the lessor) are not in the business of charity,” remarked the bench, reflecting the court’s firm approach towards ensuring compliance with leasing agreements.

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