The Ministry of Civil Aviation recently invited suggestions and objections to the proposed amendments to rule 30(7) and 32A of the Aircraft Rules, 1937 (the “Rules”) which essentially provide for swift and expeditious process for de- registration and export of aircraft by overseas lessors / owners.

The proposed amendments make it mandatory for the Indian civil aviation regulator, Director General of Civil Aviation (“DGCA”) to deregister the aircraft registered in India within five (5) working days on receipt of an application from an Irrevocable De- registration and Export Request Authorisation (“IDERA”) holder. Unlike past practice, the DGCA would not seek consent or documentation from the operator of the aircraft, or any other person before de-registration. The application for de-registration should be accompanied with (i) the original or notarised copy of the IDERA; (ii) certificate from the International Registry established under Cape Town Convention (“CTC”) in respect of all registered interests ranking in priority; and (iii) consent from all  interest holders to such  deregistration and export of aircraft.

Consequent upon de-registration, the DGCA would take action to facilitate the export and physical transfer of the aircraft along with spare engines within five (5) working days on application being made, provided all dues in India are cleared. Thus, the only challenge in course of repossession of aircraft would be payment of dues in India, such as customs and airport authority’s dues.

The proposed amendments would fast track the process of de- registration and repossession of aircraft. Usually, where an application for de-registration is made by the lessors / owners of the aircraft, DGCA tends to seek consent of or documentation from the Indian airline operator before it deregisters the aircraft. If the Indian airline operator disputes de-registration, then the DGCA usually does not act in furtherance of the application of the lessors / owners. In such a scenario, lessors / owners are constrained to approach an appropriate court for relief, which entails time and cost.

Background

India ratified the CTC in 2008 but it did not pass any legislation to give effect to the same. In absence of any underlying legislation, the international treaty is honoured as long as it is not contrary or inconsistent with domestic law. Where any provision of a treaty is in conflict with the municipal laws of India, the latter will prevail. Because of the aforesaid, aircraft lessors / owners were not able to get the aircraft deregistered smoothly. Usually, they had to approach the court of law seeking relief of directing the DGCA to deregister the aircraft.

Now the proposed amendments specifically provide that DGCA shall de-register the aircraft within the prescribed timeline without seeking any consent of / documentation from the operator of the aircraft which would give the much needed comfort to the lessors / owners of the aircraft. This would however not affect the rights of any governmental entity, inter-governmental organisation or other private providers of public services in India to arrest or detain or attach or sell the aircraft for payment of their dues.