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Business News/ Companies / News/  Delhi HC orders SpiceJet to return leased engine to Brussels by 10 March
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Delhi HC orders SpiceJet to return leased engine to Brussels by 10 March

The HC ordered the airline's MD and chairman Ajay Singh to file an affidavit within a week guaranteeing the engine's delivery by the specified date

SpiceJet, grappling with legal battles over unpaid dues in various courts, was on Monday ordered by the Supreme Court to pay $15 million to Credit Suisse by 15 March (REUTERS)Premium
SpiceJet, grappling with legal battles over unpaid dues in various courts, was on Monday ordered by the Supreme Court to pay $15 million to Credit Suisse by 15 March (REUTERS)

New Delhi: The Delhi high court on Thursday ordered low-cost airline SpiceJet to return a leased engine to Engine Lease Finance BV, in Brussels, Belgium, at its own expense by 10 March, following unsuccessful settlement talks between the two parties.

The court noted that SpiceJet must adhere to this deadline without any extension and ordered the airline's MD and chairman, Ajay Singh, to file an affidavit within a week guaranteeing the engine's delivery by the specified date.

While the engine lessor sought contempt proceedings against Ajay Singh if the engine was not returned on time, the court did not mention ‘contempt’ in its order but cautioned SpiceJet to take the deadline seriously.

The troubled airline said it was ready to return the engine at its expense through transport cargo before the deadline ends, but it has yet to obtain customs clearance for the delivery.

Both the engine lessor and the airline have agreed to conclude the inspection of the engine's condition by 26 February. Earlier, the court had instructed both of them to nominate a third-party agency to inspect the engine before its return, ensuring it remains in its current condition as per the aircraft engine general agreement.

The lessor had approached the high court to hold SpiceJet responsible for covering the costs of returning the engine and restoring it to a usable state. The lessor claims the engine is currently unfit for service and cannot be returned to Europe, alleging SpiceJet’s negligence in maintaining it.

SpiceJet denied these accusations, citing normal wear and tear as the cause of the engine’s current condition.

Engine Lease Finance had moved to court in December after unsuccessful settlement talks with SpiceJet, alleging partial payments and failure to meet the terms of their agreement.

In October, SpiceJet had agreed to pay over $2 million by 25 January and return the leased engine by that date.

Engine Lease Finance had initially approached the court in September, stating that it had terminated its lease with SpiceJet and received back eight of nine engines. The lessor sought a court order to restrain SpiceJet from using the one engine that had not been returned after the termination of the lease.

According to the agreement, SpiceJet cannot use the engine once the lease ends.

SpiceJet, grappling with legal battles over unpaid dues in various courts, was on Monday ordered by the Supreme Court to pay $1.25 million to Credit Suisse by 15 March and its chairman Ajay Singh asked to appear before it a week after making the payment.

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ABOUT THE AUTHOR
Krishna Yadav
Krishna, a lawyer turned journalist, is a key member of Mint's corporate team. He covers major legal battles in Delhi's courtrooms, with a focus on finance, markets, and policy. Additionally, he crafts easy-to-understand explainers for complex stories and holds a PG Diploma from the renowned Asian College of Journalism.
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Published: 22 Feb 2024, 01:37 PM IST
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