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2002 DIGILAW 1013 (DEL)

MODILUFT LIMITED v. UNION OF INDIA

2002-07-30

D.K.JAIN, SHARDA AGGARWAL

body2002
D. K. Jain ( 1 ) BY this application the petitioner seeks a direction to the respondents to issue a no Objection Certificate to them for relaunching airline operations. In the application it is stated that in order to liquidate their liability towards the customs authorities the petitioner, to be re-named as Royal Airlines Ltd. , (for short RAL) has entered into a settlement agreement with M/s. Air UK Leasing Ltd (for short AUL) and in terms of the said settlement, Air UK is prepared to do the following : (I) An application duly executed and duly supported by an Affidavit withdrawing the LPA proceedings which applications and affidavit shall be in the form satisfactory to RAL, which will confirm that aul has no pending or subsisting claims against the Customs authorities. (II) Applications duly executed and duly supported by Affidavits withdrawing the AUL Suit and the Winding up Petition which application and affidavits shall be in the form satisfactory to RAL, which will confirm that AUL has no pending or subsisting claims against RAL of any nature whatsoever. (III) A letter of confirmation to the Customs Authorities to the effect the amount of Rs. 12. 50 crores paid by AUL in April 1997 to the customs Authorities be appropriated as having been paid by RAL as on the date of payment by AUL to Customs. (IV) A letter of confirmation to RAL that they have no pending dues, claims, penalties or any other amounts due from RAL on any account whatsoever except as provided in this Agreement. ( 2 ) IT is further stated that in addition thereto, the petitioner is also prepared to pay a substantial amount to the respondents against the outstanding dues, which according to the statement of account, filed by the petitioner in Court today, are to the tune of Rs. 16,26,82,000/- as on 23rd July 1998. ( 3 ) THE application is opposed by the respondents. In the reply affidavit it is stated that the amount of Rs. 12. 50 crores deposited by AUL is in the nature of security for release of detained aircraft and could not be allowed to be appropriated towards Inland Air Travel Tax (IATT) dues. 16,26,82,000/- as on 23rd July 1998. ( 3 ) THE application is opposed by the respondents. In the reply affidavit it is stated that the amount of Rs. 12. 50 crores deposited by AUL is in the nature of security for release of detained aircraft and could not be allowed to be appropriated towards Inland Air Travel Tax (IATT) dues. It is also pointed out that even after the proposed adjustment a substantial amount would still be due from the petitioner and, therefore, it may not be possible to issue the no Objection certificate . ( 4 ) HAVING heard learned counsel for the parties, we are of the view that it would be equitable to direct the respondents to issue the "no Objection Certificate on petitioner s complying with certain conditions. We feel that the directions, we propose to issue, are not likely to cause any prejudice to the respondents rather these would be beneficial to them. We feel that under the arrangement the respondents shall be able to realise a substantial amount from the petitioner against the dues outstanding against them for quite some time without taking recourse to recovery proceedings and at the same time the petitioner would be able to restart its business activity which, in all probability, is likely to generate some revenue for the respondents. ( 5 ) ACCORDINGLY, we issue the following interim directions : 1. The petitioner shall pay to customs authorities a sum of Rs. 50 lakhs per month for an initial period of six months and thereafter a sum of Rs. 70 lakhs per month for a further period of six months. The said amount shall be deposited by way of bankers cheque on or before 7th of each calender month, commencing from 7th August 2002. 2. The petitioner shall obtain and file an undertaking by AUL in the form of an affidavit in terms of afore-extracted clause in the settlement agreement dated 17th May 2002 within three weeks from today. A copy of the said affidavit shall also be supplied to the respondents. 3. AUL will take steps to withdraw the LPA pending in this Court forthwith. They shall also take appropriate steps to inform the SHO concerned that they were not interested in pursuing the complaint lodged by them against the officials of the respondents. 4. A copy of the said affidavit shall also be supplied to the respondents. 3. AUL will take steps to withdraw the LPA pending in this Court forthwith. They shall also take appropriate steps to inform the SHO concerned that they were not interested in pursuing the complaint lodged by them against the officials of the respondents. 4. Within two weeks of petitioner s furnishing to the respondents letter of confirmation from AUL to the customs authorities to the effect that the amount of Rs. 12. 50 crores paid by them be appropriated as having been paid by the petitioner, the respondents shall issue the requisite no objection Certificate to the petitioner for restarting their airline operations. 5. In the event of two consecutive defaults by the petitioner in the payment of the afore-noted instalments this order shall stand vacated and the respondents will be free to recover the balance outstanding dues from the petitioner in accordance with law. ( 6 ) IT is submitted by Mr. Sanjay Jain, learned counsel for the respondents that some directions may be issued by this Court in respect of SLP filed by the respondents against order dated 24th May 2001, pending in the Supreme Court. However, the learned counsel is not in a position to inform the Court about the present status of the SLP. Under the circumstances, it is clarified that in case the SLP filed by the respondents is dismissed and some amount becomes refundable, the same shall be deposited in this Court, subject to further orders by this Court in that behalf. It goes without saying that the above order is purely an ad-hoc arrangement and will be without prejudice to the rights and contentions of both the parties. Copies of the order be given dasti to learned counsel for the parties. CM stands disposed of.