DONIER LIFTFAHRT GMBH Vs. K C V AIRWAYS

JUDGEMENT

(1.) By this common order both the applications i.e. IA 7224/96 filed by the plaintiff and IA 8260/96 filed by the defendant are being disposed of.

(2.) In IA 7224/96 the plaintiff seeks permission of the Court to take the aircraft Dornier 228-220 out of India and back to Germany for comprehensive testing and for retoring the aircraft for commercial use. In IA 8260/96 the defendant prays for direction to the plaintiff to hand over the possessn of the aircraft Dornier 228-220 to the defendant in airworthy condition. In both the applications replies have been filed. In IA 7224/96 rejoinder also has been filed.

(3.) According to the averments in the plaint, the plaintiff is a company incorporated under the laws of Germany and carries on business of manufacturing, selling and leasing of aircraft. The plaintiff's principal place of business is at Wessling, Germany and the plaintiff has also a project office at New Delhi. The defendant is a company registered under the Companies Act, 1956 having its registered office at New Delhi. On 23.7.1994 the defendant entered into a Lease Agreement with the plaintiff company for the lease of one used aircraft Dornier 228-202. The lease was for a period of 60 months from the date of acceptance of the aircraft. In terms of the Lease Agreement the defendant was required to pay to the plaintiff 60 monthly lease rentals payable in Dollars. Each monthly lease rental amoun ted to US Dollars 20,000.00 and the same was payable on the 1st of each month. In addition to lease rentals other fees and charges also were payable by the defendant to the plaintiff. The Reserve Bank of India by their letter dated 10.2.95 granted permission to the defendant to pay the plaintiff the lease rentals and oth fees and charges payable under the lease agreement. In accordance with the provisions of the Lease Agreement the aircraft was delivered to the defendant on 25.2.95. Article 17 of the Lease Agreement provides that in case the defendant defaults in paying the lease rentals on any other amount payable under the Lease Agreement within 5 calendar days after the same becomes due, the plaintiff is entitled, if the default is existing and continuing, to declare the Agreement to be in default and to terminate the Lease Agreement. Upon such termination the defendant is required to pay the plaintiff the lease rentals due and outstanding and is further required under Articles 17 and 20 to immediately return to aircraft to the plaintiff. The plaintiff is also entitled to repossess the aircraft upon such termination. It is alleged in the plaint that the defendant defaulted in paying lease rentals to the plaintiff. The plaintiff had worked out a payment schedule mutually agreeable to both the parties. Despite agreeing to pay in accordance with the mutually agreed time schedule, the defendant neglected to pay the amount admittedly due to the plaintiff. On the other hand the defendant continued to use and operate the aircraft for its commercial purposes to its exclusive gain and advantage. It is further stated that in view of the continuing default by the defendant the plaintiff by its letter dated 18.1.96 declared the defendant to be in default of the agreement and terminated the Lease Agreement pursuant to Article 17.01(a) of the Lease Agreement. In the said letter the defendant was also asked to pay the amount of lease rentals due and outstanding and also to forthwith return the aircraft, failing which the plaintiff would re-possess the aircraft as provided for in the Lease Agreement. According to the plaintiff the defendant owed plaintiff a sum of US Dollars 291792.33 as the principal amount along with interest thereon. Despite the plaintiff's demand to return the aircraft as provided for in the Lease Agreement the defendant refused to do so. Attempts by the plaintiff to reposses the aircraft with the aid of the airport security and the police also did not succeed due to the defendant's resistance, obstructions and obstacles. On the above averments the plaintiff has filed the above suit praying for a decree directing the defendant to return the aircraft Dornier 228-202 to the plaintiff in terms of Articles 17 and 20 of the Lease Agreement dated 23.7.94, a decree for mandatory and permanent injunction commanding the defendant to discharge its obligation to return the aircraft to the plaintiff and also a decree of permanent injunction restraining the defendant from using, operating, flying or otherwise utilising the aircraft in any manner whatsoever and from damaging the said aircraft or from pilfering, removing or replacing any part or component of the said aircraft.