Dornier Luftfahrt Gmbh vs K.C.V. Airways
1997 Latest Caselaw 516 Del

JUDGMENT

Cryiac Joseph, J.

(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 retiring the aircraft for commercial use. In Ia 8260/96 the defendant prays for direction to the plaintiff to hand over the possess 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 amounted 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 repossess 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.

(4) Along with the suit the plaintiff filed Ia 1199/96 praying among other things for an interim order directing the defendant to return the aircraft in question to the plaintiff and restraining the defendant from using, operating, flying and otherwise utilising the said aircraft.

(5) The defendant filed written statement and reply to Ia 1199/96, contesting the claims of the plaintiff.

(6) By an order dated 8.2.96 passed in Ia 1199/96 a direction was issued to the Director General Civil Aviation to nominate an officer who would act as Receiver appointed by this Court and the officer so nominated was directed to take possession of the aircraft in question which at that time was lying at Palam Airport. In compliance with the said order of this Court the Receiver took possession of the aircraft.

(7) Ia 1199/96 was disposed of by an or dated 1.7.96 holding that prima facie the defendant was in default of the fundamental terms regarding payment of rent and other chargers and that the termination of the Lease Agreement by the plaintiff was lawful. In the said order dated 1.7.96 it was also held that the plaintiff had established a strong prima facie case justifying the return of the aircraft. Accordingly, the Receiver was directed to hand over the aircraft to the plaintiff or its authorised representative. The Court also directed that the plaintiff shall not alienate or dispose of the aircraft or take it outside the country during the pendency of the suit without the leave of the Court . The plaintiff was also directed to furnish a security of Rs. 75 lakhs to the satisfaction of the Registrar to secure the restitution of the aircraft. The plaintiff was further directed to pay Court fee on the market value of the aircraft as on the date of the institution of the suit and also the file a certificate from registered valuer giving the market value of the aircraft in question on the date of institution of the suit as verified by the DGCA. The direction regarding handing over of possession of the aircraft to the plaintiff by the receiver was to come into effect only after the plaintiff furnished the security and paid the Court fee as stated above.

(8) Pursuant to the order dated 1.7.96 in Ia 1199/96 the plaintiff filed the valuation certificate in the Registry and paid Court fees as required by the Registry. The plaintiff also furnished a bank guarantee for Rs. 75 lakhs within the extended time vide order dated 12.7.96 in Ia 6433/96. When the case came, up before Court on 23.7.96 learned counsel for the defendant objected to the valuation but the Court directed that it would be open to the counsel for the defendant to file objection regarding valuation in accordance with the rules. The Court also recorded the statement of the counsel for the plaintiff that the possession of the aircraft had been taken by the plaintiff.

(9) There was some delay in completing the process of verification of the bank guarantee furnished by the plaintiff. Finally the plaintiff filed a FDR' in place of the bank guarantee and it was accepted. This fact was recorded in this Court's order dated 2.1.96 in Ia 6433/96.

(10) Though the defendant has taken serious objection to the handing over of the aircraft to the plaintiff by the Receiver before the bank guarantee was actually verified and accepted by the Registrar and has filed Civil Contempt Petition No.97/96, the said objection has lost its relevance as far as the present applications are concerned since the plaintiff has already filed an Fdr in place of the bank guarantee and it has been accepted. Learned counsel for the defendant wanted the said Civil Contempt Petition to be heard separately and hence I refrain from making any observation on the merits of the said Civil Contempt Petition. However, I do not find any valid reason to postpone the disposal of the present applications on the ground that the said Civil Contempt Petition is pending.

(11) As per the order dated 1.7.96 in Ia 1199/96 the plaintiff cannot take the aircraft outside the country during the pendency of the suit without the leave of the Court. It is for the above reason that the plaintiff has filed Ia 7224/96 seeking permission of the Court to take the aircraft out of India and back to Germany for comprehensive testing and for restoring the aircraft for commercial use. According to the averments in the said application, the plaintiff company has taken a business decision not to lease the aircraft to customers in India and the plaintiff wishes to take the aircraft back to Germany in order to put it to commercial use either in Germany or elsewhere after carrying out a comprehensive technical inspection of the aircraft. As on the date of the application i.e. 7.8.96 the aircraft had been lying parked and unused for more than six months and as such it urgently required comprehensive technical servicing before it could again be used for commercial purpose. According to the applicant no prejudice will be caused to the defendant if the aircraft is taken outside India since the defendant's interest is fully secured by the bank guarantee (now FDR) furnished by the plaintiff in terms of the order dated 1.7.96 in Ia 1199/96. The applicant his also undertaken to bring back the aircraft if the same is available, and if not available, to make all efforts to bring back another similar aircraft to India in the event of the plaintiff's ultimately failing in the suit, and, if so directed by this Court. It is further stated that if the plaintiff is not permitted to take the aircraft outside India, the plaintiff will suffer grave hardship and irreparable loss and injury and damages inasmuch as the plaintiff will not be able to put the aircraft to any commercial use and yet have to bear all the expenses of insuring and maintaining the aircraft. It is also stated that an aircraft which is not regularly used will become spoilt and damaged, thus exposing the plaintiff to enormous and irreparable loss and injury. It is further contended that the balance of convenience is entirely in favour of the plaintiff and against the defendant.

(12) In the reply filed by the defendant the prayer in the application is strongly opposed. According to the defendant, at the time of filing the application the plaintiff had not furnished the security of Rs. 75 lakhs. Though a bank guarantee was furnished, the Registrar had not verified and recorded his satisfaction. It is further stated in the reply that the valuation of the aircraft was not properly made by the valuer and that the same was not properly verified by DGCA. According to the defendant, the aircraft was handed over to the plaintiff by the Receiver before the conditions stipulated by the Court were fulfillled by the plaintiff and hence the defendant has filed Civil Contempt Petition No.97/96 and notice, of the said petition has been issued to the plaintiff. The contention is that before the plaintiff addresses his submissions he should be required to restore the aircraft to the Receiver and thereafter to comply with the conditions stipulated by the Court and then to approach this Court for any relief. According to the defendant no compulsive situation or business considerations have been stated for the decision of the plaintiff not to lease the aircraft to customers in India. No change of circumstances have been pleaded in the application for the leave of the Court to take the aircraft outside India. It is also stated that the comprehensive technical inspection of the aircraft can be done in India. The defendant has also denied the statement of the plaintiff that the defendant's interest is fully secured by the bank guarantee and that the security is sufficient. According to the defendant the undertaking given by the plaintiff regarding bringing back of the aircraft to India is not unconditional and hence it is not an undertaking at all. It is further alleged that if the aircraft leaves India, the defendant will have nothing to itself after the victory in the suit. It is also stated that the plaintiff can use the aircraft in India and hence there is no question of any wastage of insurance, maintenance etc. According to the defendant the balance of convenience is in favour of the defendant and against the plaintiff.

(13) In the rejoinder filed on behalf of the plaintiff it is stated that the plaintiff had complied with the conditions imposed by this Court in the order dated 1.7.96 i.e. the furnishing of security and the payment of Court fees. It is also stated that the plaintiff is not only losing money which it ought to have earned in terms of the contract or otherwise but is also incurring parking charges at the rate of Rs. 1000.00 per day and other day-to-day expenses which will work out to an average of Us Dollars 300 per day when the aircraft is on ground. It is further stated that Hal Kanpur does not manufacture or maintain Dornier 229-202 series aircraft. Before carrying out any inspection/major maintenance on this aircraft Hal personnel have to be given appropriate training/familiarisation. This will amount to additional cost and time. It is further stated that as per the Maintenance Manual of the aircraft, the major maintenance of the aircraft has already fallen due and it has to be carried out before the aircraft can be used for an airline operation. If the major maintenance is carried out in India it will be extremely expensive for the plaintiff and if it is carried out in Germany where the plaintiff has all the facilities of its own, it will involve negligible expense. It is further stated that for taking the aircraft to Germany, where the plaintiff has its own manufacturing and servicing plant, the plaintiff has to do only a `Technical Ferry', for which the maintenance required can be much less than the major maintenance. It is also pointed out in the rejoinder that on termination of the lease the defendant was required to return the aircraft in Oberfattenhofen in Germany or any other place as named by the plaintiff. It is also stated that the major structural inspection of the aircraft was falling due in February 1997. It is further stated that in view of the experience with the defendant, the plaintiff does not want to lease/sell off the aircraft to any body in India. According to the plaintiff the above aspects compelled the plaintiff to seek permission of the Court to take the aircraft out of the country. In paragraph 6 of the rejoinder the plaintiff has further undertaken to bring back this very aircraft or some other similar aircraft as may be directed by this Court, if the suit is ultimately decided against the plaintiff.

(14) I have carefully perused and considered the averments in the application, the reply and the rejoinder. I have also considered the submissions made by the learned counsel for the plaintiff and also the learned counsel for the defendant.

(15) Learned counsel for the defendant raised a preliminary objection that the plaintiff has no right to take the aircraft out of India since the plaintiff had not filed any appeal against the order dated 1.7.96 in Ia 1199/96. this contention is misconceived. By the order dated 1.7.96 this Court did not deny the right of the plaintiff to take the aircraft out of the country or prohibit the plaintiff from taking the aircraft out of the country under any circumstances. The said order only directed that the plaintiff shall not take the aircraft out of the country without leave of the Court. The right of the plaintiff to seek the leave of the Court was reserved. Hence the plaintiff is well within its rights to seek the leave of this Court to take the aircraft out of the country and it is open to this Court to consider the plaintiff's application on merits. The order dated 1.7.1996 need not deter this Court from considering the plaintiff's request on merits.

(16) In the order dated 1.7.96 in Ia 1199/96 this Court held that the defendant was prima facie in default of the fundamental terms regarding payment of rent and other charges and that the termination of the Lease Agreement by the plaintiff was lawful. In this connection reference may be made to paragraph 14 of the said order which is extracted below:-

"14.I have carefully considered the rival contentions as well as persued the correspondence referred to and the agreement terms. The defendant from the date of the Aircraft being leased has not made any payment towards rental as per the lease agreement i.e. Us $ 20,000. The contingency in which the rental was to be reduced to Us $ 10,000 did not come into existence. The plaintiff in an attempt to continue with the lease, had earlier given a revised schedule for payment to the defendant which was also not adhered to. The defendant as per the minutes of 25-10-1995 i.e revised schedule was to make payment of Us 48,200 by October 1995 which was not made. The plaintiff vide its letter of 1-12-1995 called upon defendant to make payment immediately of Us $ 84,990 which was also not made. Besides the plaintiff with a view to redress the defendants' grievances had given a credit for two months rental, which would more than compensate the defendant for the alleged defects in the Aircraft, which the joint technical audit found to have grounded the Aircraft for 24 days. As regards re-placement of unserviceable parts, the same is in accordance with the terms of the agreement. Regarding the plea that defendant had been induced by misrepresentation, undue influence to enter into the agreement, having unconscionable terms, the same appears to be devoid of substance and merit. The lease agreement was admittedly singed on 23-7-1994. The Aircraft was delivered in February, 1995. The defendant had more than adequate time to protest if he had any reservations with regard to any of the terms or conditions of the agreement. In fact there is an element of contradiction, in as much as the defendant submits that he is still willing to work the agreement and give it a fair trial. This is despite all the claims of the Aircraft being junk and not a reliable one. In fact, the defendant made no payment on signing of agreement. As per the defendant's own version Us $ 1,94,232 were due as on 30-1-1996 against which defendant seeks to adjust the Bank Guarantee amount of Us 10,000, which was encashed and Us 45623 in Escrow Account and lease rental for grounded days. The only payment made by the defendant is in the Escrow Account which cannot be released to plaintiff till defendant obtains permission from Central Board of Direct Taxes. The plaintiff in these circumstances, when the rentals and other charges continued to amount and remain outstanding was justified in encashment of the bank guarantee for Us $ 1,00,000. The encashment of bank guarantee was in accordance with terms and conditions of the agreement. The same cannot be regarded as a valid tender. It was rather a payment in sufferance. I, therefore, hold the defendant to be prima facie in default of the fundamental terms regarding payment of rent and other charges. Termination of the agreement would, therefore, be lawful."

(17) In the said order dated 1.7.96 it was further held by this Court that the plaintiff had established a strong prima facie case justifying the return of the aircraft to the plaintiff. It is mentioned in the order that though the Court had asked the defendant's counsel whether the defendant would clear the outstanding arrears and give a definite plan for payment, the response of the defendant was not positive. The Court also found that interim mandatory directions for the return of the aircraft were called for and that otherwise the plaintiff would suffer irreparable injury. The balance of convenience also was found to be in favour of the plaintiff and against the defendant. Accordingly, the nominee of the Dgca, who had been made the Receiver in the case, was directed to hand over the aircraft to the plaintiff. It is useful to refer to paragraphs 20, 21 and 22 of the order dated 1.7.1996 which are extracted below:-

"20.Let us consider the present case in the light of the observations made by the Apex Court. The defendant is admittedly in breach of the fundamental of terms regarding payment of rental and other applicable charges. In fact the defendant from the commencement of the lease has not paid any rental. The defendant had been given credit for two months rental for the days on which Aircraft was ground, which the plaintiff claims was a gesture of goodwill. The defendant was given revised schedule of payment, which it again failed to meet. The termination of the agreement was lawful and justified. The defendant is bound under the terms of the agreement to return the Aircraft which it has not done. The defendant cannot be permitted to use and operate the Aircraft. The defendant on the one hand assails the agreement as unconscionable and having been obtained by misrepresentation and undue influence. On the other hand it describes the Aircraft as defective and piece of junk but wants to operate the Aircraft and give it a fair trail. The plaintiff has thus established a strong prima facie case justifying the return of the aircraft.

21.Notwithstanding the protest of the plaintiff, during the course of the arguments, I had put to the defendant's counsel whether defendant would clear the outstandings and give a definite plan for payment. The defendant's response was that it would deposit around Us $ 30,000 and make efforts to clear the outstandings in future if it was allowed to operate the Aircraft without any hindrance. There was no commitment with regard to the furnishing of the bank guarantee which is required during the currency of the contract for a sum of Us $ one lac. The plaintiff on its part was clear that the business confidence has been shattered by repeated defaults and the defendant had gone to the extent of deriding the plaintiff's aircraft in press. Plaintiff only wanted repossession of the Aircraft in terms of the agreement. The Director General of Civil Aviation, whose nominee had been appointed as a Receiver has already addressed a communication to the Registrar of this Court expressing the difficulty being faced and the lack of infrastructure to look after the aircraft and seeking to be relieved of the said obligation. It is stated that they do not have the manpower to carry out the maintenance and upkeep of the Aircraft. The trial of the suit would take considerable time and in case the Aircraft is left in disuse, it would deteriorate burdening the plaintiff with extra liability.

22.Considering the above facts and circumstances, this is a fit case where interim mandatory directions for return of the Aircraft to the plaintiff are called for. The plaintiff would otherwise suffer irreparable injury. The balance of convenience is also in favour of the plaintiff. In these circumstances, I direct that the nominee of the Director General of Civil Aviation, who had been made the Receiver to hand over the Aircraft Dornier 228-202 to the plaintiff or its authorised representative."

(18) Thus, by order dated 1.7.96 this Court has already held that prima facie the defendant by its failure to pay the lease rentals violated the terms of the Lease Agreement, that the termination of the Lease Agreement by the plaintiff was lawful, that in case the aircraft was left, in disuse it would deteriorate burdening the plaintiff with extra liability, that the balance of convenience was in favour of the plaintiff and that the defendant was liable to be directed to return the aircraft to the plaintiff. The order dated 1.7.96 has not been challenged by the defendant in any appeal and hence it is binding on the defendant.

(19) As per Article 17.03 of the Lease Agreement dated 23.7.94 between the parties, should the termination of the Lease Agreement arises from the occurrence of any of the circumstances set out in Article 17.01, the lessee shall pay to lessor or its assignee an amount equal to the lease rentals amount outstanding and shall immediately return the aircraft to the lessor. One of the circumstances set out in Article 17.01 from which the termination of the Lease Agreement arises is the failure of the lessee to make any payment of rentals or any other amount payable under Lease Agreement within 5 calendar days after the same became due in accordance with the Lease Agreement. The termination of the Lease Agreement in the present case arose from the above mentioned circumstance and the said termination was prima facie found to be lawful. Hence the lessee was bound to return the aircraft to the lessor in terms of Article 17.03 mentiond above. As per Article 17.05 the lessor is entitled to repossess the aircraft by the termination of the Lease Agreement. As per Article 20.01 of the Lease Agreement, in the event of termination of the Lease Agreement, the lessee shall at its risk and cost and expenses return the aircraft fee and clear of all liens to lessor's airfield in Oberfattenhofen or any other airfield designated by lessor or its assignee. In view of the above clear provisions in the Lease Agreement, on termination of the Lease Agreement if the defendant refused to return the aircraft in terms of Article 20.01 the plaintiff is entitled to repossess the aircraft and to take it to the plaintiff's airfield, in Germany.

(20) However, it is true that while passing the order dated 1.7.96 directing the Receiver to hand over possession of the aircraft to the plaintiff, the plaintiff was directed not to take the aircraft outside the country during the pendency of the suit without leave of the Court. At that time the Court found it appropriate to prevent the aircraft being taken outside the country for the time being but the plaintiff's right to apply to the Court for permission to take the aircraft outside the country was protected.

(21) In this context it is useful to refer to paragraph 23 of the order dated 1.7.96 which reads thus:-

"23.As the plaintiff is being given possession at the interim stage, it shall not alienate or dispose of the Aircraft or take it outside the country during the currency of suit, without the leave of the Court. The plaintiff shall be free to operate or lease the Aircraft. Certain directions are also called for to provide for the eventuality of the plaintiff either not prosecuting the suit or ultimately failing in the suit. In either of the events, the defendant may be entitled to restitution for the expired portion of the lease. The plaintiff, therefore, shall furnish a security of Rs. 75 lakhs to the satisfaction of the Registrar to secure the restitution of the Aircraft within ten days for the above eventualities."

From a plain reading of the order as quoted above it is clear that this Court proceeded on the assumption that the plaintiff could operate or lease the aircraft in India. But this assumption is no more possible in the given circumstances. Admittedly the aircraft in question has been lying parked and unused for more than 15 months now. As pointed out by my learned brother Sarin, J., in paragraph 21 of the order dated 1.7.1996, if the aircraft is left in disuse it would deteriorate. Hence I am inclined to accept the contention of the plaintiff that the aircraft urgently requires comprehensive technical servicing and that the major maintenance of the aircraft as per the Maintenance Manual has already fallen due. The need for urgent servicing/repairs/maintenance is not denied by the defendant. The defendant's contention is that it can be done in India. But the plaintiff has pointed out in the rejoinder that Hal Kanpur does not manufacture or maintain Dornier 228-202 series aircraft and that if the inspection and maintenance are to be done by the personnel of Hal Kanpur, they have to be given appropriate training/familiarisation and that it will amount to additional cost and time. The defendant has also stated that if the major maintenance as per the Maintenance Manual is carried out in India it will be extremely expensive for the plaintiff and if it is carried out in Germany, where the plaintiff has all the facilities of its won, it will involve negligible expense'. It has been further clarified that for taking the aircraft from India to the plaintiff's manufacturing and servicing plant in Germany, only a `Technical Ferry' need be done, for which the maintenance required can be much less than the `major maintenance'. On the face of these averments, even assuming that Hal Kanpur has the required facilities, I do not find any valid reason to compel the plaintiff to carry out the inspection/repairs/servicing/major maintenance of the aircraft at Hal Kanpur incurring huge expenditure when the plaintiff can carry out them at its own manufacturing and servicing plant at a much lesser cost. It is to be remembered that this Court has already found that prima facie the defendant defaulted to pay the lease rentals and on that account the plaintiff has suffered huge loss. From February 1996 the aircraft has been lying parked and not used and during this period also the plaintiff has not been getting any income from the aircraft. At the same time, as stated in paragraph (5) of the rejoinder, the real owners of the aircraft are M/s. Deusche Credit Corporation and the plaintiff is stated to be under an obligation to pay a sum of Us $ 22679 per month to the owners. The defendant also failed to positively respond to the Court's enquiry whether the defendant would clear the outstandings and give a definite plan for payment. In these circumstances the defendant has no legal or moral right to insist that the plaintiff should be made to suffer further loss by carrying out the inspection/repairs/servicing/maintenance of the aircraft in India. Thus the position now is that the plaintiff cannot operate or lease the aircraft as assumed by this Court in its order dated 1.7.1996 unless necessary repairs/servicing/maintenance are carried out and for the said purpose the aircraft has to be taken to the plaintiff's manufacturing and servicing plant in Germany. This change of circumstance justifies the plaintiff's request for leave for take the aircraft outside the country.

(22) It has been clearly stated in the application that the plaintiff company has taken a business decision not to lease the aircraft to customers in India. It is further stated in the rejoinder that keeping in view the present experience with the defendant, the plaintiff does not want to lease/sell off the aircraft to anybody in India. Learned counsel for the plaintiff pointed out that in paragraph (7) of Ia 8260/96, the defendant itself has stated that apart from the defendant there is no other licensee to fly this particular aircraft in India, At any rate, I think that it is for the plaintiff to decide as to whom the aircraft should be leased or sold off. Neither the defendant nor this Court can impose its choice on the defendant. In the facts and circumstances of this case, I cannot find fault with the plaintiff for taking a business decision as stated above. This decision of the plaintiff has also changed the circumstances in which this Court assumed that the plaintiff could operate or lease the aircraft in India.

(23) There is still another change of circumstance in favour of the request in the application. During the last eleven months after the order dated 1.7.1996 was passed, the plaintiff has suffered huge loss not only on account of the loss of lease rentals and the plaintiff's obligation to pay a sum of Us $ 22679 per month to the real owners of the aircraft but also on account of the payment of parking charges to Hal Kanpur at the rate of Rs. 1000.00 per day and day-to-day maintenance expenses. I find no justification to continue to inflict such an injury on the plaintiff by the continued operation of the direction in the order dated 1.7.1996 directing the plaintiff not to take the aircraft outside the country. It was also stated by the learned counsel for the plaintiff that the authorities of Hal Kanpur are pressing the plaintiff to take away the aircraft from there due to shortage of space and convenience.

(24) To me it appears that the only thing that the defendant can insist is the protection of the defendant's interest in case the plaintiff does not prosecute the suit or fails in the suit. This has been taken care of in this Court's order dated 1.7.1996 and in compliance with the said order the defendant has furnished security of Rs. 75 lakhs. I am also of the view that the said security is adequate to protect the interest of the defendant. In addition to the said security in the form of Fdr the plaintiff has given a categorical undertaking in para (6) of the rejoinder as hereunder:-

"The plaintiff further undertakes to bring back this very aircraft or some other similar aircraft, as may be directed by this Hon'ble Court, if the suit is ultimately decided against the plaintiff."

(25) In view of the discussion above and having regard to equity and balance of convenience, I am of the view that the plaintiff is entitled to succeed in Ia 7224/96. The plaintiff is hereby permitted to take the Aircraft Dornier 228-202 out of India and back to Germany for comprehensive testing and for restoring the aircraft for commercial use in view of the undertaking given by the plaintiff. The undertaking given by the plaintiff as quoted in the earlier paragraph is accepted and the plaintiff shall remain bound by the said undertaking. Thus Ia 7224/96 stands allowed.

(26) The prayer in Ia 8260/96 filed by the defendant is for a direction to the plaintiff to hand over the possession of the aircraft to the defendant in airworthy condition. None of the contentions raised by the defendant/applicant hold good in view of the order dated 1.7.1996 in Ia 1199/96 and my findings with regard to Ia 7224/96 which stands allowed. Hence Ia 8260/96 is dismissed.