In connection with the further implementation of the Cape Town Convention and Protocol in India, on January 30, 2026, the Ministry of Civil Aviation in India notified the Protection of Interests in Aircraft Objects Rules, 2026 (CTC India Rules). AZB & Partners is working on the assessment of the CTC India Rules within an AWG India Contact Group frame to ensure maximum consistency. A summary of the key provisions of the CTC India Rules is set out below.

i.    Non‑consensual rights/interests under the Convention registrable with the International registry: The following non‑consensual rights/interests are registrable in the International Registry in respect of a specific aircraft:

• liens in favour of airline employees for unpaid wages arising prior to a declared default by that airline under a contract to finance/lease aircraft,
• liens/other rights of an authority of India relating to taxes/other unpaid charges arising from/related to the use of aircraft and owed by the owner/operator of that aircraft, arising prior to the time of a declared default by that owner/operator under a contract to finance/lease aircraft, and,
• rights of a person obtaining a court order permitting attachment of aircraft in partial/full satisfaction of a legal judgment.

 The above will not limit or affect the right/interest of unpaid wages of airline employees under Article 39(1)(a) of the Convention.

ii.    DGCA has powers to issue directions: The ‘registry authority’ i.e., the Directorate General of Civil Aviation (DGCA), has the power to issue directions under the Protection of Interests in Aircraft Objects Act, 2025, after placing a draft of such directions on the DGCA website for 14 days to invite objections and suggestions from parties likely to be affected. However, the DGCA may, in public interest, dispense with this requirement or reduce the time for submitting objections and suggestions.

iii.  Functions of the DGCA: The DGCA’s role includes establishing, maintaining and updating the ‘Information System’, which is an electronic system for maintaining, updating and collating information under the CTC India Rules. The Information System will be structured on a per aircraft basis. The Information System does not affect the creation of an international interest, or its priority as recorded in the International Registry.

iv.   Information of interest on aircraft: A debtor operating an aircraft that is subject to an international interest must inform the DGCA of such interest within 30 days of the registration of aircraft in India. The DGCA will identify the aircraft by its Indian registration mark assigned in its Certificate of Registration. The information will also include the details of the creditor, debtor and mortgagee (if any).

For aircraft subject to international interests that are registered or operated in India on the date of commencement of the CTC India Rules, debtors may inform the DGCA within six months (i.e., by July 30, 2026).

v.    Maintaining and submitting records of aircraft dues: Debtors operating aircraft having an international interest must electronically maintain records of the following dues arising from, related to, or owed in regard to the ownership or use by the owner/operator of the aircraft (Appendix A Dues) and submit the same to the DGCA:

• Airport operator dues including landing, housing, and parking charges
• Route navigation and facilitation charges
• Terminal navigation landing charges
• Fuel charges as a public service in respect of the specified aircraft
• Goods and service tax payable for leasing and financing of the specified aircraft

The details of Appendix A Dues must be submitted to the DGCA no later than the fifth day of the calendar month following the end of each quarter. Details of Appendix A Dues must be maintained and submitted to the DGCA as long as the aircraft remains registered in India. Debtors are also under obligation to furnish this information as and when requested by the DGCA.

vi.   Access to the Information System: The Information System will be electronically accessible in respect of the specific aircraft to the creditor and the following ‘stakeholders’:

• Airport operators
• Air navigation service provider
• Goods and services tax authority
• Fuel providers for dues relating to the specified aircraft

vii.   Creditors to inform the DGCA prior to exercising any remedy under the Convention or Protocol: Under the CTC India Rules, before exercising any remedy under the Convention or Protocol, a creditor is required to inform the DGCA of the occurrence of default in the prescribed Form in the Information System. The Form requires details of the remedy sought by the creditor to be specified. The DGCA is obligated to acknowledge the receipt of such application on the same working day.

viii. Process to be followed by DGCA: After acknowledging a creditor’s application seeking remedies, the DGCA is required to inform stakeholders and the debtor of the occurrence of default in respect of an aircraft by publishing the same on the website of the DGCA before the end of the following working day. The debtor and stakeholders are to submit details of outstanding Appendix A Dues within three working days to the DGCA in the Information System.

ix.   Procedure during the ‘waiting period’ in an insolvency:

• In relation to a debtor subject to corporate insolvency or bankruptcy proceedings under the Indian Insolvency and Bankruptcy Code, 2016 (the Code), the moratorium under section 14 of the Code will commence on the insolvency commencement date and will expire at the end of two calendar months and will be referred to as the ‘waiting period’. No remedy under the Convention or Protocol may be prevented or restricted after the expiry of the waiting period.
• During the waiting period, the resolution professional is required to preserve the aircraft and maintain its value in accordance with the contract between the creditor and the debtor, and provide the creditor with access to the aircraft (including all technical and maintenance records) and information on the physical security of the aircraft.
• The debtor or resolution professional, as applicable, may retain possession of the aircraft if, before the expiry of the waiting period, all defaults (other than those arising from the initiation of insolvency proceedings) are cured, and the resolution professional has agreed to perform all future obligations under the lease/security agreement with the creditor.
• At the end of the waiting period, upon receipt of the application from the creditor for exercising remedies related to de-registration/export of the aircraft, the DGCA is required to take action in accordance with the provisions of the Bharatiya Vayuyan Adhiniyam, 2024 or the Rules thereunder.
• Consent of the creditor is required for any modification in an agreement between the debtor and creditor. However, this does not affect any authority of the resolution professional under the Code to terminate an agreement.

x.    Settlement of dues by IDERA Hoder prior to aircraft export: The Appendix A Dues, arising after the creditor informs the DGCA of the default, are to be paid by the IDERA Holder before the aircraft can be exported from India.

xi.   Non-judicial remedies: The DGCA is required to issue directions determining the manner in which remedies may be availed by creditors related to taking possession/control of aircraft without the involvement of courts.