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Apex court stays Bombay HC order on detention of aircraft news
06 April 2011

New Delhi: The Supreme Court today stayed a Bombay High Court order barring the Airport Authority of India (AAI) from detaining aircraft because of pending dues of airlines.

A bench comprising justice GS Singhvi and justice AK Ganguly stayed the high court's order on waiving off the bank guarantee of Aer Lingus, which had leased two Boeing 737-200 aircraft to now defunct East West Airlines in November 1992.

In its order, earlier in March this year, the high court had held that AAI could not hold Aer Lingus responsible for various dues outstanding against the defunct East West Airlines.

Aer Lingus had leased the two Boeings in 1992 to the family-promoted East West Airlines. However, the lease agreement was terminated in 1996 and the aircraft were returned. Later, when Aer Lingus tried to take the planes out of the country, AAI restrained the operation saying the defunct airlines was yet to settle bills for services provided. It felt that since the aircraft were on wet lease to the airline it had a right to restrain their exit from the country.

Thereupon the Irish firm approached the Bombay High Court which allowed Aer Lingus to fly the aircraft out of India after furnishing a bank guarantee. In its order the high court held that the owner of the aircraft could not be compelled to pay airline dues.

In the proceedings before the apex court, attorney general Goolam E Vahanvati, appearing for AAI, argued the authority had the right to detain the aircraft for non-payment of dues.

The apex court has now issued notices to Aer Lingus, directing it to file reply.

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Apex court stays Bombay HC order on detention of aircraft