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--------------- Print Magazine --------------
 
  May 2016
 
  April 2016
 
 
 
 
CASE STUDY - By Anoop K. Kaushal
Aircraft owner is not liable to pay the debts
arising out of services provided to
the Lessee of the Airport Authority

The owner of the aircraft can be made liable to pay charges to the Airport Authority for use of airport facility provided by the Airport Authority of India only if there is a contract between the Airport Authority of India and the owner of the aircraft. Recently on March 9, 2011 the Hon'ble Bombay High Court has pronounced a landmark judgment giving relief to a foreign aircraft owner. Aerlingus Ltd., an Irish Company owned few aircrafts and leased two of their aircrafts to East West Travels & Trade Links Ltd. East West) for operating air-taxi operation in India. Certain sums of money were payable by East West to Airport Authority of India for services provided by the Airport Authority to the aircraft owned by Aerlingus. Bills were raised by the Airport Authority on East West for payments of the dues. However, payments were not made by East West therefore Airport Authority of. India restrained the operations of the aircraft in India from July 1996. Aerlingus Ltd being the owner of the aircraft filed the Writ Petition to take aircraft out of India on termination of the lease and on the other hand Airport Authority of India filed a civil suit against Aerlingus and East West for recovery of the dues and also sought for detaining the aircraft till those charges are paid.

Venkatesh Dhond, Counsel appearing for Singhania & Co. argued in the Court that lithe charges for recovery of which Airport Authority of India wants to detain or withhold the aircraft of the Petitioner, are for the services rendered by the Airport Authority of India to the aircraft owned by the Petitioner while it was on lease with East West... provisions of the Aircraft Act and Rules framed thereunder to claim that charges. for the services rendered by the Airport Authority of India to the aircraft are recoverable from the lessee at whose instance the services' are provided". He also added "that for failure of East West to pay these dues, the Petitioner, Aerlingus who is the owner of the aircraft will not become liable."

Hon'ble Bombay HiqhCourt, accepting the argument put forward by the Counsel appearing for Singhania & Co. held that 'the owner of Aircraft can be made liable to pay these charges to the Airport Authority of India only if there is a contract between the Airport Authority of India and the owner for payment of these charges or there is any law which obliges the owner to pay these charges to the Airport Authority of India'. While concluding his judgment the Division Bench comprising of their Lordships Mr. Justice D.K. Deshmukh and Mr. Justice Anoop V. Mohta, held that 'the Airport Authority of India can legitimately recover the dues only from East West to whom the services were provided. The Petitioner was entitled to take away its aircraft as it was not Iiable to pay the dues of East West for services rendered by the Airport Authority of India'.

Anoop K. Kaushal, Advocate - kaushal@justice.com
 
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