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Issue No.1

15. Issue No.1 was whether there was a diversion of an aircraft by the Air India as claimed by GATI in para 18 of the statement of claim („SOC‟). The case of GATI was that Air India delivered the first two of the five proposed aircrafts beyond the stipulated date. While the first two aircrafts, were as per Clause 5.6 of the WLA, to be delivered on 15th July and 1st September 2007 respectively, they were in fact delivered only on 17 th October and 27th October 2007 respectively.

16. According to GATI, it learnt much later that in breach of the WLA, Air India had in fact delivered the first aircraft, after it was converted for use, to a competitor of GATI, viz., INDIAPOST. Further, the third aircraft which was to be delivered on 15th October 2007 was in fact delivered only on 7th May 2008. Moreover, within twenty four days of delivery, Air India informed GATI that the said aircraft would have to undergo engineering checks and would have to be withdrawn. Despite the protest of GATI, the third aircraft was withdrawn on 31st May 2008. GATI claimed that the withdrawal of the third aircraft was made on a false pretext, that it was withdrawn for being provided as a standby aircraft to INDIAPOST and that it came to its knowledge when by inadvertence a bill raised by Air India for operation of the third aircraft which was meant for INDIAPOST was delivered to GATI. The third aircraft was again offered by email dated 11 th July 2008 and fourth by email dated 22nd July 2008. GATI‟s case was that on account of the non-adherence to the delivery schedule, it could not plan its business in advance, nor it could enter into contracts with customers, thereby incurring heavy business losses. The case of GATI was that Air India‟s non-adherence to the delivery schedule and the diversion of the freighter aircrafts to other parties in violation of the WLA amounted to a „repudiatory‟ breach by Air India.

17. The AT found that as far as the statement of defence („SOD‟) of Air India was concerned, it did not deal with para 18 of the SOC where GATI had pleaded about the diversion of the aircraft. The case of Air India emerged in para 17 of the affidavit of Mr. S.K. Sharma (RW-8)where it was stated that the operations under the WLA were „charter operations‟ and no aircrafts was to be delivered to GATI. In para 18 of its affidavit, RW-8 stated that no freighter was deployed in the services of INDIAPOST in contravention of the WLA.

20. The Board also noted that the first converted aircraft was to be operated in the north-east sector and therefore "the operations of Nagpur Hub pattern would be delayed". The agreement between Air India and INDIAPOST was dated 23rd August 2007, which was more than three months after the date of the WLA entered into between GATI and Air India. The registration number of the aircraft was also mentioned in the agreement with the INDIAPOST as VT-EHH.

25. The Court is unable to agree with the submissions of Mr. Suri that the AT has misread and misinterpreted the WLA. The correspondence between the parties shows that there was no agreement between the parties to re- phrase the WLA as a charter agreement. The conclusion of the AT that the aircraft VT-EHH was definitely the subject matter of WLA and that its allotment to INDIAPOST was in breach of theWLA appear to be a perfectly possible conclusion on the reading of the entire evidence. Clearly the minutes of the BOD meeting of 11th July 2007 reveals that IAL was fully aware of the consequences of the breach it was committing of the WLA in diverting the first freighter aircraft to INDIAPOST. The Court therefore finds no error having been committed by the AT in deciding the Issue No.1 in favour of GATI.