SpiceJet has has now last option of appearing before Supreme Court for a relief as the Madras High court on Tuesday dismissed the appeal by SpiceJet against a single-judge order to wind up the low-cost airline on a Credit Suisse AG’s petition relating to non-payment of $24 million to SR Technics, a maintenance and repair company.
The matter was being heard by the division bench of Justice Paresh Upadhyay and Justice Sathi Kumar Sukumara Kurup had extended the suspension of the order till January 28, to enable the airline to move a further appeal before the Supreme Court.
“Since we have not entertained these appeals, there is nothing to be stayed so far this order is concerned. However, with a view to see that challenge if any to this order remains meaningful to the appellant, the stay granted by the company court which is in force till today shall stand extended till January 28,” the bench said.
About SpiceJet: It is an Indian low-cost airline headquartered in Gurgaon, Haryana. It is the second largest airline in the country by number of domestic passengers carried, with a market share of 13.6% as of March 2019. Established as air taxi provider ModiLuft in 1994, the company was acquired by Indian entrepreneur Ajay Singh in 2004 and re-christened as SpiceJet. The airline operated its first flight in May 2005. Indian media baron Kalanidhi Maran acquired a controlling stake in SpiceJet in June 2010 through Sun Group which was sold back to Ajay Singh in January 2015. The airline operates a fleet of Boeing 737 and Bombardier Dash 8 aircraft.
The matter pertains to a debt of more than $24 million that SpiceJet owes Swiss financial services company, Credit Suisse, with respect to engine maintenance services provided to the airline by a firm called SR Technics for over a decade.
Single Judge Order: The High Court had on December 6 ordered the winding up of SpiceJet on a petition filed by Credit Suisse, to whom SR Technics had given the right to collect all payments. The order was subsequently stayed for three weeks. The single-judge bench of Justice R. Subramanian, which had last month directed the official liquidator to take over assets of SpiceJet, had then conditionally stayed the order for a period of three weeks, giving the airline time to lodge an appeal.
Division Bench Order: Thereafter the airline got no relief from appeal in Madras high court as they turned down an appeal by the Company against a December order by a single-judge bench to wind up its operations after the airline failed to make payment of over $24 million to Swiss maintenance, repair and overhauling (MRO) service provider SR Technics. A division bench comprising judges Sathi Kumar Sukumara Kurup and Paresh Upadhyay, however, extended a stay order on the judgement till 28 January, allowing SpiceJet to approach the Supreme Court.
The petition (against SpiceJet) was filed by Credit Suisse AG, which is mandated to receive pending dues on behalf of SR Technics. According to the petitioner, SpiceJet had reached an agreement with SR Technics for MRO services for 10 years in November 2011.
Other litigation: The Ajay Singh-led airline also faces a lawsuit at the Delhi High Court from aircraft lessor Goshawk and its trustee Wilmington Trust SP Services Dublin Ltd. regarding unpaid dues. The Court is set to hear the case again in February.
This development comes when Indian airlines have been reeling from the covid-19 pandemic, which has eroded air passenger traffic and impacted revenues.
Hon’ble Mr. Justice Sathi Kumar Sukumara Kurup
Madras High Court
Hon’ble Mr Justice Paresh Upadhaya
Madras High Court
Image: Skytrax
