Lufthansa Barred From Taking Out Planes Leased To Modiluft

The Supreme Court yesterday restrained Lufthansa from removing out of the country the three aircraft it had leased to ModiLuft, modifying the order of the Bombay High Court in the dispute between them.

The court had asked both the parties to come to an equitable agreement when the appeal of ModiLuft was taken up last week. They had brought to the court their terms for settlement of the dispute, but apparently there were still differences between them. Therefore the court posted the appeal for a full hearing in the first week of August.

Justice A S Anand and Justice K T Thomas clarified in their order that the high court order in other respects shall not be disturbed. It had appointed a receiver for the planes and allowed Lufthansa to take out the planes on certain conditions. The appeal was filed against this order.

The Supreme Court also issued notice to all the concerned parties and allowed them time to file their replies.

The differences between the two parties at the preliminary hearing was over the rent for the grounded aircraft, the maintenance costs, insurance payments and the cost of 'C' checks. According to ModiLuft, the lease agreement for the planes were illegally terminated on May 29 last year. It claimed that it had paid all payments due to the German company. The contract was for a period ending May next year. Therefore, ModiLuft was entitled to fly the planes till then, it argued.

Lufthansa disputed the claim and asserted that the Indian company failed to pay the lease amount. Therefore, it was legal to terminate the contract. According to it, leaving the plane here meant a loss of Rs 6.5 lakh every day on maintenance alone.