SpiceJet To Deposit $5 Million In 2 Weeks Or Face Liquidation: Court
Madras High Court has ordered winding up of SpiceJet and taking over of its assets over unpaid dues
Madras High Court has ordered winding up of private carrier SpiceJet Limited and directed the official liquidator attached to the High Court to take over its assets, in a plea filed by a Swiss company over unpaid dues.
The airline had failed to make payment of over $24 million to a Swiss company SR Technics for maintenance, repair, and overhauling of aircraft engines, modules, components, assemblies, and parts. The order was passed by the high court on December 6, 2021.
However, SpiceJet in a filing to the Bombay Stock Exchange today said, “the Madras High Court through its order dated December 6, 2021, has stayed the earlier order of winding up and appointment of an official liquidator for a period of three weeks, subject to the condition that the Company deposits the amount equivalent to $5 million within a period of two weeks.”
The court was allowing a company petition from Credit Suisse AG, a stock corporation registered under the laws of Switzerland, which appealed for winding up of the Indian firm under the provisions of the Companies Act, 1956 and appointed the Official Liquidator of the high court as the Liquidator with all powers under Section 448 of the Companies Act to take charge of SpiceJet’s assets, properties, stock in trade and books of accounts.
The “respondent company (SpiceJet) has miserably failed to satisfy the three-pronged test suggested by the Supreme Court in Mathusudan Govardhandas & Co. v. Madhu Woollen Industries (P) Ltd., 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,” Justice R Subramanian said in his order on Monday and directed the private carrier be wound up and the official liquidator take over its assets.
According to the petitioner, SpiceJet had availed of the services of SR Technics, Switzerland, for maintenance, repair, and overhauling of aircraft engines, modules, components, assemblies, and parts, which are mandatory for its operations. An agreement for the performance of such services for a period of 10 years was entered into between SpiceJet and SR Technics on November 24. 2011.