Section 7 of The Protection of Interests in Aircraft Objects Act 2025 De-registration and export request authorisation

Section 7 of The Protection of Interests in Aircraft Objects Act 2025 De-registration and export request authorisation

Visual Summary

Executive Summary

This section establishes that the international rules for de-registering and exporting an aircraft, as laid out in Article XIII of the Protocol, are applicable in India. However, it places a critical condition: these international rules must not conflict with India’s own primary aviation law, the Bharatiya Vayuyan Adhiniyam, 2024, or any rules created under it. In essence, it balances India’s commitment to international standards with the supremacy of its domestic laws.

In-Depth Analysis of the Section

Introduction
Section 7 addresses a crucial step in aircraft financing and leasing: what happens when a deal goes wrong and the creditor (like a leasing company) needs to repossess an aircraft located in India. This section provides the legal pathway for taking the aircraft off India’s books and moving it out of the country.

Breakdown of the Provision
The section is short but powerful. Let’s break down its key components:

• De-registration and Export Request: These are two distinct but related actions. ‘De-registration’ means officially removing the aircraft from the Indian Civil Aircraft Register, which is managed by the Directorate General of Civil Aviation (DGCA). ‘Export’ is the physical act of flying the aircraft out of India. Both are necessary for a creditor to fully repossess their asset.
• Article XIII of the Protocol: This refers to a specific rule in the Cape Town Convention’s Aircraft Protocol. This article creates a streamlined and internationally recognized process for a creditor to de-register and export an aircraft after a debtor defaults on their agreement. By adopting this article, India signals to the global aviation finance community that it follows predictable, international standards.
• Subject to the Bharatiya Vayuyan Adhiniyam, 2024: This is the most important qualifier. It means that while the international process under Article XIII is the default, it cannot override India’s own sovereign aviation laws. Any action taken must still comply with all safety regulations, procedural requirements, and any other rules set by the DGCA under the main Indian aviation act. If there’s a conflict, the Indian law prevails.

Practical Example
Imagine an Irish leasing company leases an Airbus A320 to an Indian airline. The lease agreement includes a clause allowing for repossession upon default. The Indian airline fails to make payments for several months. The Irish company decides to take the aircraft back. Under Section 7, the Irish company can use the procedures outlined in Article XIII of the Protocol to request the DGCA to de-register the aircraft. The DGCA will process this request, but it will also ensure that all Indian safety checks are completed, airport dues are cleared (if required by law), and all procedural formalities under the Bharatiya Vayuyan Adhiniyam, 2024 are met before the aircraft is allowed to be flown out of India.

Conclusion
Section 7 is a balancing act. It provides foreign creditors with the confidence that there is a clear, internationally accepted process for repossessing aircraft in India. At the same time, it preserves India’s regulatory authority over its own airspace and aviation sector, ensuring that domestic laws and safety standards are never compromised.

Related Provisions

Understanding Section 7 is enhanced by looking at other related sections of the Act. These provisions work together to create a comprehensive legal framework.

• Section 6: Remedies on insolvency – This is highly relevant as the need to de-register and export an aircraft often arises when an airline becomes insolvent. Section 6 outlines the specific remedies available to creditors in an insolvency scenario, and de-registration is a key part of exercising those remedies.
• Section 8: Jurisdiction – If there is a dispute over the de-registration or export request, this section clarifies that the High Court is the correct judicial body to handle the matter. This provides legal certainty for all parties involved.
• Section 3: Application of Convention and Protocol in India – This is the foundational section that gives legal force to the entire Convention and Protocol (including Article XIII) in India. Section 7 is a specific application of the general principle established in Section 3.

Learning Aids

Mnemonics

• EXIT: To remember the core idea, think of the word EXIT. The section allows a creditor to **EX**port an aircraft after de-registering **I**t, following the Pro**T**ocol, but always subject to Indian law.

Process Flowchart

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