HC Allows Maintenance of Aircraft Until De-registration to Avoid Irreparable Losses Due to Lease Termination

  • Blog|News|Insolvency and Bankruptcy Code|
  • 3 Min Read
  • By Taxmann
  • |
  • Last Updated on 9 November, 2023

Recent Posts

Blog, News, International Tax

[World Tax News] UAE Releases Guide on Filing of Corporate Tax Return and More

Other Laws, Blog

Introduction to Information Security | Strategies for Data Protection and Risk Management

Latest from Taxmann

Maintenance of Aircraft

Case Details: Accipiter Investments Aircraft 2 Ltd. v. Union of India - [2023] 155 taxmann.com 455 (HC-Delhi)

Judiciary and Counsel Details

    • Ms Tara Vitasta Ganju, J.
    • Satvik Verma, Sr. Adv., Ravi Nath, Ankur Mahindru, Rohan Taneja, Aditya Kapur, Tanveer Oberoi, Tushar Mudgil, Mehul Jain, Tarun & Ankit, Advs. for the Petitioner.
    • Rajesh Gogna CGSC, Ms Anjana Gosain, SPC, Ms Avshreya Pratap Singh Rudy, Ms Nippun Sharma, Advs., Ramji Srinivasan, Sr. Adv., Anuj Berry, Siddharth Ranade, Ramakant Rai, Sourabh Rath, Ms Somesh Srivastava, Varun K. Tikmani, Aryan Agrawal, Ms Shruti Pandey, Ms Namrata Sarogi & Ms Drishti Kaushik, Advs. for the Respondent.

Facts of the Case

In the instant case, the petitioners were the lessors and the owners of aircrafts that had been leased to the respondent-corporate debtor ‘GO AIR’ and, a lease agreement was executed. Later, due to the default committed by corporate debtors in payment of lease rentals, the lease agreement was terminated by the petitioners.

Consequently, the petitioners issued a notice of default and termination to the respondent, in which it was directed to immediately cease the operation of the aircraft and demanded possession of the aircraft. The said termination notice further directed the lessee to provide necessary assistance and cooperation for the de-registration and export of aircraft.

Thereafter, an application for de-registration of aircraft under Rule 30(7) of Aircraft Rules was filed by the petitioners with the Director General of Civil Aviation (DGCA). In the meantime, the respondent initiated proceedings before NCLT under section 10 of the Insolvency and Bankruptcy Code, 2016 for initiation of voluntary CIRP against itself and the same was admitted by NCLT.

Subsequently, the moratorium was imposed. Later, the NCLT’s order was challenged in an appeal before the NCLAT. However, the NCLAT upheld NCLT’s order. The petitioners filed an instant petition for interim relief stating that DGCA failed to de-register their aircraft in contravention of sub-rule (7) of Rule 30 of Aircraft Rules, 1937.

High Court Held

The High Court held that once an event of default had occurred and petitioners had terminated the lease agreement and commenced the process of de-registration of aircraft, such aircraft could not be flown.

It was further observed that the petitioners were suffering irreparable losses as the value of aircrafts were diminishing on a daily basis and there could be no denial of the fact that aircrafts of petitioners were extremely valuable and highly sophisticated equipment and required regular maintenance for their preservation.

Therefore, HC directed the DGCA to permit RP to carry out mandatory maintenance/engine run of aircraft until its de-registration.

List of Cases Reviewed

List of Cases Referred to

Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.

Leave a Reply

Your email address will not be published. Required fields are marked *

«
»

Everything on Tax and Corporate Laws of India

To subscribe to our weekly newsletter please log in/register on Taxmann.com

Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied