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Modiluft to challenge Delhi HC order to windup

The Modiluft management have announced that they are in the process of challenging the Delhi high court order directing them to wind up the company.

Yesterday, the Delhi high court ordered the winding up of the Modiluft Ltd and appointed an official liquidator to take charge of the company. The order came following a petition by Air UK Leasing Ltd which claimed that its dues had not been paid.

In a statement released in Bombay, the company said that the court order came at a time when Modiluft had finalised and signed agreements with Platinum Securities and Montreal Bonds to raise US $50 million that is required to relaunch the airline.

Moreover, the company had recently obtained the approval from the Foreign Investment and Promotion Board of India to raise the amount abroad.

The company has also prepared a business plan which not only establishes its viability but will also help recreate 2,085 job opportunities, the statement added.

The Delhi high court order came on a petition by Air UK Leasing Limited which alleged that the airlines had failed to pay US $14 million, including included aircraft lease money and Inland Air Travel Tax. Modiluft had taken three Boeing aircraft on lease from Air UK for one year, ended September 1996.

On the other hand, Modiluft also filed a suit in the Bombay high court for damages worth of Rs 1.68 billion against the Air UK Leasing Limited. The case, still pending, was filed alleging the leasing company's inability to supply aircraft and also for having supplied defective aircraft to Modiluft.

Air UK Leasing recalled the aircraft it leased to Modiluft since the latter was unable to make the necessary payments. The firm then filed a petition to recover the money, to which it later added the winding up plea.

Modiluft began operations in May 1993 in technical collaboration with the German airline Lufthansa. The two broke their links in May 1996.