TMI Blog2013 (5) TMI 958X X X X Extracts X X X X X X X X Extracts X X X X ..... n question. The said Respondent No. 2 entered into a lease agreement with an Indian company Golden Wings Pvt. Limited (also known as GWPL) on 20-3-2008. On 16-4-2008 Respondent No. 3 DGCA granted to the said GWPL a No Objection Certificate for import of the Aircraft into India. On 20-4-2008 the Aircraft was imported into India under the category of Non Scheduled (Passenger) Services and nil Customs duty was paid. 3. Under a financing arrangement a loan was extended by Respondent No. 1 to PAL the owner i.e. Respondent No. 2. On 20-4-2008 GWPL executed an Irrevocable De-registration Power of Attorney in favour of Respondent No. 1. To secure the repayment of the loan, Respondent No. 2 executed Aircraft Security Agreement and Chattel Mortgage on 5-5-2008. The instrument of mortgage confers on Respondent No. 1 the right to seek de-registration of the Aircraft in the jurisdiction of the concerned State Registry. On 7-5-2008, Respondent No. 1 entered into a loan agreement with the owner Respondent No. 2. Pursuant to the loan agreement credit facility in the sum of US $ 15,885,916 was agreed to be extended to Respondent No. 2-PAL. Thereafter it appears that various lease agreements ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were sought from the said Lessee GWPL. 7. In response to the above, GWPL wrote back on 21-12-2010 to Respondent No. 3 pointing out that the Aircraft had flown out of India on 25-4-2010. It is also accepted that GWPL was under the scanner since August, 2010 by competent authorities including Income Tax Department, DRI and Enforcement Directorate. GWPL stated that they have no objection to the de-registration of the Aircraft. 8. The Respondent No. 3 on 27-12-2010 replied to GWPL making following observations :- (i) As stated in your letter referred above, the aircraft has flown out of India on 25th April, 2010 and is presently positioned at Biggin Hill Airport, UK since 23rd July, 2010. However, you have not clarified about the circumstances under which this aircraft was grounded at foreign station and what is the status of the maintenance of the aircraft since then. (ii) The Mortgagee, M/s. Corporate Aircraft Funding Company, LLC, Chicago, IIIInois, is also required to submit the No Objection certificate for the De-registration of the above mentioned aircraft. (iii) It may also be noted that Directorate of Revenue Intelligence, Mumbai Zonal Unit, is investiga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the confiscation orders. It is contended that the violation of terms and conditions of the exemption of Customs duty has led to a evasion of Customs duty of approximately ₹ 19 crores. It is further claimed that it is within the powers of Respondent No. 3/DGCA to withhold de-registering of the Aircraft on the ground of pendency of investigation and proceedings under the Customs Act to safeguard the Government revenue. It is further stated that merely because the Aircraft has flown out of India would not be a ground for the appellant not being able to exercise its powers. Learned counsel for the appellant further contends that though Union of India is a signatory to the Cape Town Convention under Form No. 4 of the instrument of accession lodged by India under the Cape Town Convention, the said lodgement empowers detention or arrest of an aircraft with the object of recovering amounts owed to the Government or any internal-governmental organisation or private provider of public services. 12. Mr. Neeraj Kishan Kaul, learned senior counsel for Respondent No. 1 submits that there are no grounds to interfere in the impugned order. He submits that the decision taken by DGCA, Resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the counsel for DGCA was that it has not accorded de-registration to the Aircraft due to the communication received by them from the appellant regarding the ongoing investigation. This stand is also borne out from the letter dated 8-10-2011 sent by DGCA. Hence there is no dispute that Respondent No. 1 is entitled to request DGCA to de-register the Aircraft. 16. It is common ground that the powers of the DGCA to carry out deregistration are contained in Rule 30(6) of the Aircraft Rules, 1937. The said Rule 30(6) reads as under : - The registration of an aircraft registered in India may be cancelled at any time by the Central Government, if it is satisfied that - (i) such registration is not in conformity with the provisions of sub-rule (2); or (ii) the registration has been obtained by furnishing false information; or (iii) the aircraft could more suitably be registered in some other country; or (iv) the lease in respect of the aircraft, registered in pursuance of sub-clause (iv) of clause (a) of sub-rule (2) is not in force; or (v) the certificate of airworthiness in respect of the aircraft has expired for a period of five years or more; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est for de-registration. 20. We now come to the action of DGCA on the request for de-registration by Respondent No. 1. The stand of Respondent No. 3 DGCA is contained in its communications dated 27-12-2010 and 8-10-2011 and shows that DGCA has taken a view that the request of Respondent No. 1 for de-registration of the Aircraft cannot be acceded to without prior clearance from the investigating agency. To that extent, the DGCA has gone by the dictates of the appellant as communicated to it in its letter dated 10-12-2010, to not allow the request of Respondent No. 1 and has failed to exercise its discretion. 21. Rule 30(6) of the Aircraft Rules empowers DGCA to allow de-registration of an Aircraft in accordance with the relevant provisions. The said rule for public reasons confers an enabling power. The enabling power of this kind conferred would be coupled with a duty on DGCA to exercise its powers, when circumstances so demand. It is a duty which cannot be shirked or shelved. The communications of DGCA dated 27-12-2010 and 8-10-2011 clearly indicate that DGCA has simply refused to exercise its powers without giving any cogent or justifiable reasons. It has simply acted at th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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