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2023 (7) TMI 485 - HC - Insolvency and BankruptcyCIRP - Leased Aircrafts - The notice of default and termination sent by the Petitioners to Respondent/Go Air - Failure to deregister their Aircraft(s) in contravention of Sub-Rule (7) of Rule 30 of the Aircraft Rules, 1937 - seeking also to facilitate the export and physical possession of these Aircrafts. HELD THAT - The provisions of the Aircraft Act, 1934 and the Aircraft Rules inter-alia provide that no person shall use and operate an Aircraft unless it is in accordance with the Aircraft Rules - Rule 5 of the Aircraft Rules provides for the registration etc. of an Aircraft and states that unless an Aircraft has been registered and it bears its nationality and registration marks on the Aircraft, it shall not be flown. Once an event of default has occurred and the Petitioners have terminated the Lease Agreement(s) and commenced the process of de-registration of the Aircraft, such Aircraft cannot be flown. The purport of Rule 30 (7) of the Aircraft Rules has been dealt with by a Coordinate Bench of this Court in the AWAS 39423 IRELAND LTD., WILMINGTON TRUST SP SERVICES (DUBLIN) LIMITED VERSUS DIRECTORATE GENERAL OF CIVIL AVIATION ANR. 2015 (3) TMI 1427 - DELHI HIGH COURT wherein after analysis of the provisions of the Aircraft Rules, this Court held that the Respondent/DGCA has to proceed in accordance with Rule 30 (7) of the Aircraft Rules and the Court cannot interfere even on grounds of equity; keeping in mind, the protection of private business transaction law in India, international conventions such as Cape Town Convention must be followed; the disputes qua validity of the termination of the lease are not relevant for the purposes of deregistration and the contention that public interest will be impinged if the deregistration is granted is not a valid ground for refusal. The argument which is raised by the Respondents qua adjudication of the disputes before the NCLT and that this Court under its inherent powers in Article 226 of the Constitution of India, 1950, should not interfere with the CIRP process, cannot be sustained. The Petitioners before the Court seek a writ of mandamus against the Respondent/DGCA for breaching its duty as prescribed in the Aircraft Act and are well within their rights to do so. The scope and ambit of the powers of this High Court under Article 226 has been the subject matter of a catena of judgments. The provisions qua registration/deregistration of an Aircraft are inter-alia subject matter of the Aircraft Act and Aircraft Rules framed thereunder and the Petitioners have approached this Court alleging on a failure of the Respondent/DGCA to comply with these provisions and are well within their rights to do so - The NCLT and the NCLAT are statutory bodies constituted under the provisions of Sections 408 and 410 respectively of the Companies Act, 2013 and have the powers to adjudicate upon matters which relate to the IBC - prima facie, the IRP is not required to take control of the same under the provisions of the IBC. The Petitioners have made out a strong prima facie case in view of the provisions of the Aircrafts Rules as discussed herein. The balance of convenience is also in favor of the Petitioners. The Petitioners are suffering irreparable losses as the value of these Aircrafts are diminishing on a daily basis - There can also be no denial of the fact that the Aircrafts of the Petitioners are extremely valuable and highly sophisticated equipment and require regular maintenance for their preservation. The Petitioners, their employees, agents, officers and/or representatives shall be permitted by the Respondent/DGCA and the appropriate Airport Authorities to access the Airport(s) where the 30 Aircrafts are parked details of the Aircraft(s) is reproduced in the table in paragraph 3.2 herein inter alia to inspect their respective Aircrafts, within the next 3 days - Application disposed off.
Issues Involved:
1. Deregistration of Aircrafts. 2. Application of Moratorium under IBC. 3. Jurisdiction of High Court under Article 226. 4. Maintenance of Aircrafts during litigation. Summary: Deregistration of Aircrafts: The Petitioners, lessors and owners of aircrafts leased to Go Air, sought deregistration of their aircrafts under Rule 30(7) of the Aircraft Rules, 1937. They argued that the Directorate General of Civil Aviation (DGCA) must deregister the aircrafts upon receipt of the requisite documentation, as per the Aircraft Rules and the Cape Town Convention. The Petitioners had terminated the lease agreements due to Go Air's default on rental payments and filed applications for deregistration. Application of Moratorium under IBC: The National Company Law Tribunal (NCLT) had admitted Go Air's petition for voluntary Corporate Insolvency Resolution Process (CIRP) and imposed a moratorium under Section 14 of the Insolvency and Bankruptcy Code (IBC). The DGCA cited this moratorium as the reason for not processing the deregistration applications. The Petitioners argued that the moratorium did not apply to assets owned by third parties, such as the leased aircrafts, and that the DGCA's duty to deregister the aircrafts was unaffected by the moratorium. Jurisdiction of High Court under Article 226: The Respondents contended that the High Court should not interfere with the CIRP process and that the Petitioners should seek remedies through the NCLT and National Company Law Appellate Tribunal (NCLAT). The Petitioners argued that the High Court had jurisdiction under Article 226 to issue a writ of mandamus to the DGCA for failing to perform its statutory duty. The Court agreed, noting that the NCLT did not have the power of judicial review over administrative actions and that the High Court could intervene to ensure compliance with the Aircraft Rules. Maintenance of Aircrafts during Litigation: The Petitioners expressed concern over the potential damage to the aircrafts if regular maintenance was not performed. The Court acknowledged the importance of maintaining the aircrafts and issued interim directions to allow the Petitioners to inspect and maintain the aircrafts twice a month. The Respondents were restrained from removing any parts or documentation from the aircrafts without the Petitioners' consent. Conclusion: The Court found that the Petitioners had made a strong prima facie case and that the balance of convenience was in their favor. The interim applications were disposed of with directions to ensure the maintenance and preservation of the aircrafts pending the final disposal of the writ petitions. The Court emphasized that these interim directions would not impact the merits of the petitions.
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