NCLT dismisses insolvency plea against SpiceJet
What's the story
On December 4, the National Company Law Tribunal (NCLT) rejected a request to begin insolvency proceedings against budget airline SpiceJet. The petition was filed by aircraft leasing company Willis Lease Finance due to unpaid debts. SpiceJet challenged the validity of Willis's petition, as they had previously filed a similar request earlier this year but withdrew it due to technical issues.
Details
Arguments presented by both parties
SpiceJet's senior advocate, Krishnendu Dutta, argued that the petition was not valid because Willis did not have the court's permission to refile it. Dutta also claimed that Willis was not the actual creditor, as the engine leases were signed with different entities like Wills Ireland and Willis Engine Securitisation Trust 1. However, senior advocate Virender Ganda, representing Willis, countered that a new notice was only necessary when the new insolvency petition included new invoices not mentioned in the previous notice.
What Next?
Insolvency pleas and settlement efforts
In 2023, three aircraft leasing companies filed four insolvency petitions against SpiceJet for non-payment of dues. Aircastle Ireland Ltd, Wilmington, and Celestial sought NCLT's help to admit SpiceJet into the insolvency process to recover their debts. In addition to aircraft leasing companies, a tech services provider also filed an insolvency petition against the airline. In August, SpiceJet issued over 48 million shares to nine aircraft leasing companies to settle outstanding debts worth Rs. 231 crore.