Court orders DGCA to reconsider aircraft de-registration decision in compliance with the law

The court upheld the decision of the learned Single Judge directing the DGCA to de-register the aircraft in question, emphasizing that while DRI's instructions are not binding, they should be considered by DGCA in its decision-making process. The court modified the order, requiring DGCA to make a reasoned decision on the de-registration request in compliance with the law, allowing the concerned parties to submit written arguments. The appellant, DRI, was granted the freedom to pursue actions related to the alleged customs duty evasion.

---

---

Issues Involved:

1. De-registration of Aircraft by DGCA.
2. Violation of Customs Duty Exemption.
3. Powers of DGCA under Rule 30(6) of the Aircraft Rules, 1937.
4. Powers of DRI under Sections 110 and 111 of the Customs Act.
5. Compliance with Cape Town Convention.

Summary:

1. De-registration of Aircraft by DGCA:

The present appeal arises out of a Writ Petition filed by Respondent No. 1 seeking a direction to Respondent No. 3 Director General Civil Aviation (DGCA) to de-register its Aircraft. The learned Single Judge allowed the Writ Petition and directed issuance of a Writ of Mandamus directing DGCA to de-register the aircraft in issue.

2. Violation of Customs Duty Exemption:

Investigations revealed that the Aircraft was being used for purposes other than for what it had been imported, specifically by Mr. Lalit K. Modi for personal travel, violating the terms of the customs duty exemption. The Directorate of Revenue Intelligence (DRI) requested DGCA not to de-register the Aircraft until the investigations were complete.

3. Powers of DGCA under Rule 30(6) of the Aircraft Rules, 1937:

Rule 30(6) of the Aircraft Rules, 1937, empowers DGCA to cancel the registration of an aircraft under specific conditions. DGCA's refusal to de-register the Aircraft was based on the communication from DRI regarding ongoing investigations.

4. Powers of DRI under Sections 110 and 111 of the Customs Act:

The appellant contended that the Aircraft was flown out of the country to deprive statutory authorities of their rights under Sections 110 or 111 of the Customs Act. However, the court found no provisions in these sections obliging DGCA to comply with DRI's instructions while dealing with a de-registration request.

5. Compliance with Cape Town Convention:

Respondent No. 1 argued that as per the Cape Town Convention, a signatory State is required to de-register an Aircraft on a request by the mortgagee or owner. The court noted that DGCA's enabling power under Rule 30(6) is coupled with a duty to exercise its powers when circumstances demand.

Conclusion:

The court agreed with the findings of the learned Single Judge that DRI's instructions are not mandatory for DGCA. However, DGCA should consider DRI's request while exercising its powers. The court modified the impugned order, directing DGCA to take a reasoned decision on the de-registration request in accordance with law, allowing Respondent Nos. 1 and 2 to make written submissions. The appellant-DRI is free to take appropriate steps regarding the alleged evasion of Customs duty.

---