SC agrees to hear SpiceJet's plea against order to wind up operations

The Supreme Court on Tuesday agreed to hear a plea filed by private airline SpiceJet Limited against the Madras High Court order of winding up of the company.

A Bench of Chief Justice of India NV Ramana, Justices AS Bopanna and Hima Kohli agreed to consider the plea of SpiceJet after senior advocate Mukul Rohatgi, appearing for the company, sought urgent listing of the plea.

"This matter is regarding the winding up of airline called SpiceJet. The protection is till Friday, please list it else, the company will fold up," Rohatgi told the Bench while saying that matter needs to be heard urgently.

According to Credit Suisse AG, a stock corporation registered under the laws of Switzerland, SpiceJet had failed to honor its commitment to pay the bills for over $24 million raised by the Swiss company towards maintenance, repairing and overhauling of the aircraft engines and components.

Recently, the division bench of the Madras High Court had upheld the December 6 verdict of a single judge ordering the winding up of SpiceJet Limited and directing the official liquidator attached to the High Court to take over the assets of the company.

The single judge had suspended the operation of his order for a limited period with a direction to the company to remit $5 million, as a condition precedent to avail the interim relief.

The division bench by its order on January 11, however, extended the operation of the interim stay granted by the single judge, till January 28 to enable the airliner to prefer an appeal before the Supreme Court. SpiceJet moved the division bench against single judge order.

The winding up petition before High Court's single judge was moved by a Switzerland-based company Credit Suisse AG, which claimed that SpiceJet was indebted to it for more than USD 24 million and alleged that private carrier is unable to pay the debts owed to the firm.

According to Credit Suisse AG, a stock corporation registered under the laws of Switzerland, SpiceJet had availed services of SR Technics, Switzerland, for maintenance, repair and overhauling of aircraft engines, modules, components, assemblies and parts which are mandatory for its operations. On November 24, 2011, 10-year contract was signed between SR Technica and SpiceJet.

"Meanwhile, SR Technics entered into a financing agreement with Credit Suisse AG on September 26, 2012 and assigned all its present and future rights to receive payments to Credit Swiss. Thereafter, Credit Swiss-made repeated requests to SpiceJet to make payments under the various invoices. Since SpiceJet did not honour its commitment, the Credit Swiss issued statutory notice under the Companies Act."

Since the notice did not evoke any response, Credit Swiss moved the plea for liquidation and winding up of SpiceJet.

The company had prayed before the single judge for winding up of SpiceJet under the provisions of the Companies Act, 1956 and appoint the Official Liquidator of the High Court as the Liquidator of SpiceJet with all powers under Section 448 of the Companies Act to take charge of its assets, properties, stock in trade and books of accounts.