Mumbai: Akasa Air can proceed in Mumbai with its suit seeking compensation and contractual damages from six pilots who exited the airline without serving the notice period, ruled the Bombay High Court on Wednesday.
Justice SM Modak said that the suit filed by SNV Aviation Pvt Ltd, which runs the airline, can be heard in Mumbai since part of the cause of action arose within the jurisdiction of Bombay High Court as the resignations were accepted by the company in Mumbai.
Next hearing on Oct 4
The court stated, "...the place where the resignation was received can be a part of the cause of action. Sending a resignation through email cannot be sufficient. Ultimately, the company has to make a decision on that. Either the company may refuse to accept the resignation or may accept it conditionally or for a future date. If these options are available to the employer, and these options can be exercised only when the email is received, part of the cause of action has arisen in Mumbai."
The HC will now hear the suit for granting interim relief to Akasa Air, which was founded by the late billionaire businessman Rakesh Jhunjhunwala, on October 4.
The airline moved the court after six pilots resigned from the company without serving the mandatory 6-month notice period. Of the six pilots, one resided in Mumbai, so he didn’t raise an objection about the jurisdiction for filing the suit in Mumbai. However, the remaining five pilots did not reside in Mumbai and hence objected to it.
Therefore, the company sought the HC’s permission to proceed with the suit against the other five pilots in Mumbai, which was granted by Justice Modak.
The resignation clause of the employment agreements stipulated that when a pilot resigns, the pilot has to serve a six-month notice period. Alternatively, the company has the right to waive off the notice period entirely or partly. The company also has the right to require the pilot to make a payment in lieu of notice period waiver. Further, if a pilot fails to serve the entire notice period, the company can recover payment for the remainder of the notice period.
The court noted that the resignation isn’t complete once the pilot sends the resignation letter, as the company has to make a decision on the resignation. Thus, part of the cause of action arose where the company exercised its discretion to conditionally accept the resignations, i.e., Mumbai.
Therefore, the Bombay High Court has jurisdiction in this matter, Justice Modak noted.
The suit is seeking compensation of Rs. 21 crore from each of the pilots who have resigned from the company.
It has sought a direction to the pilots to pay Rs. 18 lakh for breach of contract and Rs. 21 crore each for damages to the airline’s reputation due to flight cancellations, rescheduling, and grounding. It has also prayed for an interim direction to the pilots to serve their 6-month notice period.
The pilots resigned reportedly following job offers from Air India Express."
