Supreme Court heeds SpiceJet plea to hear case on Friday
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Struggling low-cost carrier SpiceJet has convinced a Supreme Court bench to grant an early hearing regarding the dues it allegedly owes Credit-Suisse, with the lawyer representing the company stating that the airline would "fold-up" of the case was not immediately heard.
Chief Justice N V Ramana agreed to hear the matter on January 28.
SpiceJet's losses this financial year have grown to more than ₹ 561 crore from a year ago. The airline's stock is down by about 30% in the past year. The negative net worth of the airline is close to what it was in 2014, when it was about to shut operations.
The company owes $24 million to Swiss stock corporation Credit-Suisse for which the corporation had approached Indian courts to pay off. Following a Madras court verdict to liquidate the airline if a portion of the dues were not paid, SpiceJet managed to submit $5 million as payment. Following this, the Madras High Court extended the stay on the order to liquidate the airline to January 11.
The judge on December 6 had held SpiceJet had miserably failed to satisfy the three pronged test suggested by the Supreme Court in a similar case and hence had rendered itself liable to be wound up for its inability to pay its debts under Section 433 (e) of the Companies Act 1956.
The dispute between Credit-Suisse and SpiceJet arose after non-payment of dues on a 10 year contract from 2012 where the Swiss company provided the airlines with the service of SR Technics, which in turn supplied parts for and repaired airlines. A new clause of payment had also mentioned a deferred payment scheme for the airline along with adjusted costs for price rise.
However SpiceJet had fulfilled none of these dues which prompted the company to go to court. SoiceJet argued that it had not been aware that the Swiss company was not approved under the Directorate General of Civil Aviation (DGCA) India. The appeal said adding that an 'illegal claim' for dues would not come under the definition of 'debts' as stated in the Companies Act.
The embattled airline carrier received a cash infusion of an undisclosed amount in November 2021 related to the grounding of Boeing 737 MAX aircraft, but a series of settlements with lessors such as CDB Aviation and Avolon has eroded that gain. In December, the airline ended a long-running dispute with De Havilland Aircraft of Canada by paying roughly ₹320 crore.