NCLT issues notice to SpiceJet in another insolvency plea over ₹68 crore default

The National Company Law Tribunal (NCLT) on Thursday issued notice to low cost carrier SpiceJet in an insolvency plea filed by its aircraft lessor Falgu Aviation Leasing Limited over a default of $8.1 million or ₹68 crore.

This is the fourth insolvency plea filed against SpiceJet by its aircraft lessors in the last 10 days.

Sabarmati Aviation Leasing Limited and JetAir 17 Limited have also filed insolvency pleas in the NCLT in addition to Falgu. However, notices were not issued in these cases as, SpiceJet's lawyers contended that they were not served the case files for these petitions.

Appearing for Falgu, Advocate Kunal Tandon that Falgu had in 2021 filed a plea in the Delhi High Court seeking execution of a decree obtained for repayment of dues. Subsequently, Falgu and SpiceJet entered into a settlement in August 2022, under which the execution was withdrawn. However, SpiceJet failed to stick to the repayment plan as per the settlement agreement, as a result of which they had to terminate the lease in 2023. Since the payments have not been forthcoming even after termination of the lease, the airline had to move an insolvency plea, he said.

Senior Advocate Krishnendu Dutta and Advocate Sanjay Gupta, who appeared for SpiceJet, contended that Falgu could be considered an operational creditor under the Insolvency and Bankruptcy Code, 2016 as its entire case was based on a settlement agreement. Dutta urged the NCLT not to issue notice in the case as it was not maintainable.

A coram comprising Judicial Member Mahendra Khandelwal and Technical Member Dr Sanjeev Ranjan, however, opined that the issuance of notice is necessary in the case. It further asked SpiceJet to raise the preliminary issues in its counter.

On October 14, Aviator ML 29641 Limited moved the NCLT against SpiceJet over a default of  ₹58.64 crore.

Tandon was briefed by law firm Wadia Ghandy through its lawyers Pranaya Goyal, Marylou Bilawala, Chiranjivi Sharma, Sharleen Lobo, Apoorva Kaushik, Vasu Gupta, Saakshi Malpekar, Uday Mathur and Nehal Gupta.

Last month, the Delhi High Court upheld an order directing SpiceJet to ground three of its engines for defaulting on payment to French engines lessors.

A Bench of Justices Rajiv Shakdher and Amit Bansal refused to interfere with single-judge's order directing SpiceJet to ground the engines.

The single-judge had passed an order on August 14, directing SpiceJet to ground three engines leased from two French lessors after the airline defaulted on rental lease payments.