The Protection of Interests in Aircraft Objects Bill, 2025 was introduced in the Rajya Sabha on February 10, 2025, by the Minister of Civil Aviation, Shri Ram Mohan Naidu. The bill aims to align India's domestic laws with the Cape Town Convention (CTC) and its Aircraft Protocol, to which India acceded in 2008. The CTC is an international treaty designed to standardize transactions involving movable property, such as aircraft and engines, and to provide legal protection for creditors, financiers, and lessors. legal60.com+2Ministry of Civil Aviation+2PRS Legislative Research+2azb+8UPSC Current Affairs 2025+8indiajuris+8Study IQ Education
Objectives of the Bill:
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Legal Implementation of CTC in India: The bill seeks to give legal effect to the provisions of the CTC and its Aircraft Protocol within India, ensuring that international standards for aviation financing and leasing are upheld. UPSC Current Affairs 2025
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Protection of Creditor Rights: It establishes a clear legal framework for recognizing and enforcing international interests in aircraft objects, thereby enhancing the rights and remedies available to creditors in cases of default or insolvency. ETLegalWorld.com+10legal60.com+10azb+10
Key Provisions:
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Designation of Regulatory Authority: The Directorate General of Civil Aviation (DGCA) is designated as the regulatory authority responsible for overseeing the implementation of the CTC provisions in India. azb+3UPSC Current Affairs 2025+3Study IQ Education+3
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Debtor Obligations: Debtors (typically airlines) are required to maintain accurate records of dues related to aircraft ownership or usage and submit these records for review when required, ensuring transparency and accountability. UPSC Current Affairs 2025+1Study IQ Education+1
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Creditor Remedies: In the event of a default, creditors have the right to take possession or control of the aircraft object, sell or lease the aircraft, or collect income from its use. Before exercising these remedies, creditors must notify the DGCA about the occurrence of a default. UPSC Current Affairs 2025+4ETLegalWorld.com+4azb+4
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Insolvency Proceedings: During insolvency proceedings, resolution professionals are permitted to retain aircraft assets for up to 60 days, provided the debtor continues to make payments for maintenance and usage. This provision ensures that the assets are preserved and maintained during insolvency proceedings. UPSC Current Affairs 2025+1Study IQ Education+1
Significance:
By implementing the CTC and its Aircraft Protocol, the bill aims to enhance the legal security of aircraft financing and leasing in India. This alignment with international standards is expected to boost investor confidence, attract foreign investment, and reduce borrowing costs for Indian airlines. Ultimately, it seeks to facilitate the growth of India's aviation sector by providing a robust legal framework that protects the interests of all stakeholders involved in aircraft financing and leasing.
