W.P.(C)--747/2015. Case: WILMINGTON TRUST SP SERVICES (DUBLIN) LIMITED Vs. DIRECTORATE GENERAL OF CIVIL AVIATION & ANR.. High Court of Delhi (India)

* IN THE HIGH COURT OF DELHI AT NEW DELHI

Judgement reserved on: 05.03.2015 % Judgement delivered on:19.03.2015

+ WP(C) 871/2015

AWAS 39423 IRELAND LTD. & ORS. .....Petitioners

Versus

DIRECTORATE GENERAL OF CIVIL AVIATION & ANR. ..... Respondents

+ WP(C) 747/2015

WILMINGTON TRUST SP SERVICES (DUBLIN)

LIMITED .....Petitioners

Versus

DIRECTORATE GENERAL OF CIVIL AVIATION & ANR. ..... Respondents

Advocates appeared in this case:

For the petitioners: Mr Kevic Setalvad, Sr. Adv. with Ms Sneha Rao & Mr

Pai, Advs. for the petitioners in WP(C) 871/2015.

Mr Ramji Srinivasan, Sr. Adv. with Mr Ravi Nath, Mr Kumar, Mr Rohan Ghosh, Ms Neha Singh, Mr Karan Lahiri, Rajeev Kumar, Ms Radhika Mathur, Ms Sara Sundaram Rishabh Kapur, Advs. for the petitioner in WP(C) 747/2015.

For the Respondents: Mr Sanjay Jain, ASG with Ms Anjana Gosain, Mr

Desodya, Mr Arnab Naskar, Ms Saroj Bidawat & Mr Mohan, Advs. with Mr S. Dutta, Director (Airworthiness)

M. Debula, Asstt. Director, for R-1.

Mr Sandeep Sethi, Sr. Adv. with Mr Atul Sharma, Mr Srivastava, Mr Milanka Choudhury & Mr Kshitiz Khera, for R-2.

CORAM:

HON'BLE MR. JUSTICE RAJIV SHAKDHER

RAJIV SHAKDHER,J

WP(C) 871/2015

WP(C) 747/2015 & CM Nos. 2894/2015 & 2895/2015

1. The captioned petitions pertain to entities, which essentially de-registration of aircrafts (the details qua which I shall provide hereafter) upon termination of the lease agreements with respondent no.2.

   relief sought in both petitions are consequential in nature. Respondent no.2, in both petitions, is an airline, by the name of, Spicejet Limited. For the sake of convenience hereon, respondent no.2 will be referred Spicejet. Furthermore, hereon I will be making a reference to aircrafts aircraft objects.

   1.1 The other respondent in the two petitions is also common, which respondent no.1. Respondent no.1 in both petitions is the Director of Civil Aviation. Hereafter the Director General of Civil Aviation will be referred to as DGCA.

   1.2 In order to adjudicate upon the petitions before me, the facts are required to be noticed, which I would be setting out The discussion though, concerning both facts and the law, would common, as arguments have been advanced by counsels for parties on sides, based on the premise that there are no substantial differences facts in respect of the two matters.

   FACTS IN WP(C) 871/2015

2. There are three petitioners in this matter. Each of these claim to be represented by their respective power of attorney holders.

   petitioners, apparently, entered into lease agreements, on various with Spicejet. At that stage, Spicejet executed two crucial documents favour of the petitioners. First, an Irrevocable De-Registration Power Attorney (IDPOA). Second, an Irrevocable De-Registration and Request Authorization (IDERA). The details, with respect to the ai objects in respect of which the aforementioned documents have executed, are as follows:

   Petiti oners

   Aircraft Model

   Manufac turer’s Sl. No

   Indian Registrat ion Mark

   Lease agreeme nt date

   1 B 737-800

   2 B 737-800

   3 B 737-800

   2.1 As would be evident from the details given in the table above, Certificate of Registration (COR) was issued by the DGCA in respect each of the three aircraft objects. The COR, inter alia, certifies that aircraft objects, described above, have been duly entered in the Civil Aviation Register (in short ICAR), with effect from the indicated therein, in accordance with the Convention on International Civil Aviation dated 07.12.1944 and the Aircraft Act, 1934 (in short the Act), as also the Rules framed thereunder. In the three CORs issued vis the aforementioned, it is sated that they are hypothecated by an by the name of Wells Fargo Bank, Northwest National Association.

   2.2. Apparently, according to the petitioners, the defaults, in payment lease rents, by Spicejet, prompted them to issue default-cum-termination and re-delivery notices. There were three separate notices of even

   IDPOA date

   IDERA date of

   39423 VT-SGZ 30.4.12 30.4.12 30.4.12

   39424 VT-SZA 22.5.12 24.5.12 24.5.12

   39427 VT-SZB 17.10.12 23.10.12 18.10.12

   i.e., 18.12.2014, issued qua each of the aircraft objects. The said inter alia, alluded to the failure on the part of the of Spicejet to pay and supplemental rent, in accordance with the terms of the lease,

   three business days of the payments falling due; triggering an event default under Section 17(a) of the Aircraft Lease Agreement (in short Lease Agreement). The notices went on to state, that consequently, lease, was terminated with immediate effect in accordance with provisions of Section 18(a) (v) of the lease agreement. A demand was also made that Spicejet should, at the petitioners’ expense, immediately the aircraft objects, together with all documents at the location set the notices.

   2.3 Spicejet, did not comply with the directive contained in the notice, which propelled the petitioners to approach the DGCA. In connection, petitioners wrote to the DGCA, on 19.12.2014. In the communication, a request was made to the DGCA that, it should call upon Spicejet to ground the aforementioned aircraft objects and, take steps, to return the same to them to the place already indicated.

   2.4 Since, Spicejet continued to operate the aforementioned objects, even though the lease agreements vis-a-vis each one of them been terminated, the petitioners, made a request to the DGCA, vide separate communications of even date, i.e., 26.12.2014, to de-register aircraft objects from the ICAR and, to issue an “Export Certificate Airworthiness” – to enable them to ferry the aircraft objects out of country, at their costs.

   2.5 As there was no response by the DGCA to the communications of 26.12.2014, by way of follow-up, once again,

   separate communications were sent, all of which were dated 29.12.2014, respect of the aforementioned aircraft objects.

   2.6 In the interregnum, DGCA had issued a communication 26.12.2014, which the petitioners claim, they received on 29.12.2014 as an attachment to an email of the same date, whereby they were directed submit the following documents/ information:

   (i) Certificate of registration in original.

   (ii) Confirmation on de-activation of aircraft objects address for S transponder”.

   (iii) Application for issuance of Export Certificate of Airworthiness.

   2.7 The petitioners, promptly, replied to this communication letter dated 02.01.2015, whereby it informed DGCA that, in so far as was concerned, the same was available with Spicejet, as the operator of the Aircraft, and that, in any case, in terms of the relevant provisions of the original was to be retained by the operator. In so far as the of the same was concerned, the same had already been handed over to it.

   2.8 As regards confirmation of de-activation address allotted to them “Mode S” Transponder was concerned, it was indicated that the exercise was normally carried out after the aircraft objects was registered. In any event, the petitioners undertook to furnish the necessary information; and, for that purpose, requested that they be provided required format.

   2.9 As regards issuance of Export Certificate of Airworthiness concerned, the petitioners indicated that they would not be requiring same vis-a-vis aircraft objects bearing manufacturer’s serial no. 39423 and 39427. In so far as aircraft objects bearing manufacturer’s serial no. 39424

   was concerned, it was indicated that an application in the prescribed format would be submitted for the said purpose.

3. It is pertinent to point out that there were two separate letters same date, i.e., 02.01.2015, which were issued. The contents of letters were common except the last part referred to above, that requirement of Export Certificate of Airworthiness. Pertinently the request for the de-registration, was reiterated in both letters.

   3.1 However, by a subsequent letter dated 08.01.2015, it was that even for the aircraft objects bearing manufacturer’s serial no.

   the petitioners did not require the Export Certificate of Airworthiness. other words, ultimately for none of the three aircraft objects, the certificate was required. By this letter, while the petitioners’ request for de-registration remained intact, they indicated their preference for grounding the aircraft objects, as against what was indicated in their earlier communication.

   3.2 In the earlier communication, the request made was that the objects be grounded at a place in Ireland, however, in this letter, it indicated that the aircraft objects could either be grounded at the Airport, in Belagondapalli or, at the Indira Gandhi International Airport, New Delhi.

   3.3 The aforesaid communication by the petitioners was followed communication dated 09.01.2015, addressed to the DGCA. In the letter, a reference was made to the proposed amendment to be carried in Rule 30 of the Aircrafts Rules, 1937 (in short the Aircraft Rules). doing so, the petitioners sought to bring to the notice of DGCA following:

   (i) That the petitioners, i.e., the lessors, were the authorized under IDERA executed by Spicejet qua each of the aforementioned objects.

   (ii) The lessors/ owners and mortgagees were the only “ interest holders”, in respect of the said aircraft objects, and that, no other registered interest holders in existence.

   3.4 Accordingly, with this letter dated 09.01.2015, the appended the following for DGCA’s reference:

   (a) IDERAs.

   (b) Priority interest search certificates in respect of airframes and engines, as on the said date.

   (c) Consent letters of respective owners and mortgagees

   12.12.2014 and 18.12.2014 respectively, which had already submitted to the Director of Airworthiness, DGCA.

   3.5 As a result of the aforesaid communication, DGCA was propelled act and, consequently, it issued an email on the same date, i.e., 09.01.2015, to Spicejet wherein, it adverted to the fact that, since, it had failed by its commitment with regard to de-registration request of the lessors, it should surrender the COR, of the aircraft objects , and activate the “Mode S...