Bombay High Court Allows Akasa Air to Proceed Against Five Pilots in Mumbai

Bombay High Court Allows Akasa Air to Proceed Against Five Pilots in Mumbai

Posts the matter for considering grant of interim reliefs to the low-cost airline on 4 October

The Bombay High Court has allowed a leave petition filed by Akasa Air seeking permission to proceed against five pilots who resigned from the company without serving their notice period.

A bench comprising Justice SM Modak observed that a part of the cause of action arose within its own jurisdiction, as the resignations were accepted by the company in Mumbai.

The bench held, “The place where the resignation was received can be part of the cause of action. Sending a resignation through email cannot be sufficient. Ultimately, the company has to take a call on that. Either the company may refuse to accept the resignation, or accept it conditionally, or for a future date. If the options are available to the employer and can be exercised when the email is received, the part of the cause of action has arisen in Mumbai.”

The dispute arose following the resignation of five Akasa Air pilots, who left the company without serving the contractual six-month notice period.

The low-cost airline sought Rs.21 crores in damages from each pilot, and an additional Rs.18 lakhs for breach of contract. It also sought an injunction compelling the pilots to serve their notice period.

Appearing for Akasa Air, Senior Advocate Janak Dwarkadas argued that the employment agreement and the training agreement were executed in Mumbai. Also, the resignations were received in Mumbai, making it the appropriate jurisdiction for the case. He contended that the company did not choose Mumbai for lower court fees but because it was the agreed-upon jurisdiction as per the agreements between the airline and the pilots.

The advocate pointed out that as per the employment agreements, any dispute arising from the contract was to be exclusively decided in Mumbai. He also emphasized that the pilots provided four undated cheques to the company at the time of signing the agreement, which were payable in Mumbai.

On behalf of the pilots, Senior Advocate Darius Khambata argued that while the employment agreements were executed in Mumbai, they were signed by the pilots at their respective places of posting outside Mumbai. The cheques were not deposited by the company, and it couldn’t be said they were payable in Mumbai. The plaintiff could deposit those at any place in India where it had a bank account.

Khambata contended that the place of acceptance of resignation would be either New Delhi or Bengaluru, as the emails accepting the resignations were received by the pilots in those cities. Therefore, the Bombay High Court lacked the jurisdiction to hear the dispute.

On the other hand, Dwarkadas stated there was nothing to show that the pilots signed the agreements outside Mumbai.

Meanwhile, the resignation clause of the employment agreements stipulated that when a pilot resigned, he was to continue in service until the completion of the notice period. However, the company had the right to waive off the period entirely or partly. The company had the right to ask the pilot to make the payment in lieu of the notice period waiver. Further, if the pilot failed to serve the entire notice period, the company could recover the payment for the remainder of the notice period.

The judge noted that the resignation process was not complete once the pilot sent it, as the company had to take a call on it. Thus, part of the cause of action arose where Akasa Air exercised its discretion to conditionally accept the resignations, which was Mumbai.

Thus, without going into the matter of whether the resignation, without serving a notice period, constituted a repudiation of the contract, the bench held that the Bombay High Court had jurisdiction in the matter.