Akasa Air vs. Pilots: Delhi High Court says DGCA can act if any party in breach of contract, CAR 2017

In the dispute between Akasa Air and its pilots, the Delhi High Court on Wednesday said the Directorate General of Civil Aviation (DGCA) is at liberty to act against party in breach of contract and who acted in violation of the Civil Aviation Regulations 2017 (CAR 2017) [SNV Aviation Private LImited & Anr v Directorate General of Civil Aviation & Anr].

Justice Manmeet Pritam Singh Arora said that there is no absolute restraint against DGCA and the Ministry of Civil Aviation (MCA) from acting against the parties that violate CAR 2017, and the earlier interim orders passed by the Court in 2018 in another matter would not be a bar on DGCA to take action under law.

"As regards the issue of clarification of the interim orders dated 25.07.2018 and 11.10.2019, this Court is of the opinion that the orders are clear and unequivocal inasmuch as the said orders are conditional upon the pilots and Airlines duly complying with the terms of the contract and in case of non-compliance, the CAR, 2017 becomes operative; and Respondent No1 [DGCA] is at liberty to act in accordance with the said CAR, 2017 and under the extant law against the party in breach," the Court said.

However, the Court said that at this moment, it cannot issue any express direction to the DGCA and MCA to act upon a representation that Akasa might file in the future against defaulting pilots.

Justice Arora noted that since the DGCA has said that it has no jurisdiction to enter into the contractual disputes between an airline and its pilots, therefore, the Court will have to first decide the issue of DGCA's jurisdiction.

"...in the opinion of this Court, the said issue of jurisdiction would have to be decided finally before issuing a direction to Respondent Nos. 1 and 2 (DGCA and MCA) to consider and inquire upon a complaint received from the Petitioner. In the considered opinion of this Court, a direction to Respondent Nos. 1 and 2 to decide the representation of Petitioners against (future infractions) by the defaulting pilots cannot be issued at this interim stage without first deciding the issue of jurisdiction of Respondent Nos. 1 and 2."

It added that the directions sought can await the final outcome of the petition.

The Bench, however, clarified that if, during the pendency of this petition, a pilot acts in breach of the minimum contractual notice period, then such an action will be at the pilot’s own risk and will remain subject to the outcome of the petition.

The Court then disposed of Akasa's interim relief application.

The main petition will now be heard on October 13.

SNV Aviation Private Limited, which flies under the name Akasa Air, had approached the High Court stating that 43 of its pilots have resigned without serving the mandatory notice period and this has gravely affected the airline’s operations which is now in a state of crisis.

The Court was told that due to these resignations, it has cancelled as many as 600 flights since June.

The airline company argued that it is not pressing for any action against the pilots who have already left but is only seeking a direction to the DGCA to decide their (Akasa's) representations against pilots who may leave the airline in future without serving the notice period.

The DGCA had argued that it cannot interfere in the employment agreement between pilots and Akasa Air because it does not have the power or authority to interfere is any employment contract.

The aviation regulator argued that it would be in the interest of the parties that Akasa Air complies with the mandate to maintain a limited schedule if it does not have the necessary number of pilots to maintain flight operations.

Senior Advocate Amit Sibal along with Trilegal lawyers Ashish Bhan, Aayush Mitruka and Lisa Mishra appeared for SNV Aviation Private Limited.

Advocate Anjana Gosain, Avshreya Rudy and Nippun Sharma represented the DGCA.

Senior Advocates Vivek Kohli and advocates Neetika Bajaj and Siddharth Puri appeared for the Indian Pilots Guild.

[Read Judgment]