Court asks SpiceJet to pay $5 million to Swiss company in two weeks or face liquidation of assets
Financial services firm Credit Suisse had filed a petition in the Madras HC alleging that the airline had failed to pay its debts.
The Madras High Court on Monday ordered private airline SpiceJet to pay $5 million or Rs 37.71 crore within two weeks to a Swiss company. The airline would face liquidation of assets if it fails to pay, the court said, according to Live Law.
The court was deciding on a petition filed by Credit Suisse, a Switzerland-based financial services firm.
The petitioner submitted to the court that in 2011, SpiceJet had signed a 10-year agreement with Swiss company SR Technics for the repair and maintenance of engines and other parts of its planes, Bar and Bench reported.
In 2012, Credit Suisse had signed a financing agreement with SR Technics. The agreement gave Credit Suisse the rights to receive payments from SpiceJet, according to Bar and Bench.
In its petition, Credit Suisse claimed that SpiceJet owed the firm $24 million or Rs 181 crore. The company alleged that SpiceJet did not pay the debt despite being asked to do so repeatedly, Bar and Bench reported.
Credit Suisse said that it later came to know that SpiceJet was not in a position to pay off the debt, following which it issued a statutory notice to the airline. After SpiceJet did not respond to this notice either, Credit Sussie filed the petition seeking that the airline be wound up.
On Tuesday, the Madras High Court said that SpiceJet had “rendered itself liable to be wound up for its inability to pay its debts under Section 433 (e) of the Companies Act 1956”, according to PTI. The court ordered the official liquidator to take over the company’s assets.
SpiceJet argued that the petitioner was not its creditor and an order for its winding up could not be issued under Section 433 of the Companies Act.
The company also sought a two-week stay on the order so that it could file an appeal, Live Law reported. The court accepted this request.