The Madras high court on Tuesday dismissed an appeal moved by SpiceJet Limited challenging an order directing winding up of the company and takeover of its assets by the official liquidator.
A single judge of the court passed the order as the airline failed to pay its debt to a Switzerland-based company.
Rejecting the appeal, a division bench of Justice Paresh Upadhyay and Justice Sathi Kumar Sukumara Kurup suspended the order till January 28 to enable the airline to move a further appeal before the Supreme Court.
The issue pertains to a plea moved by Credit Suisse AG, a stock corporation registered under the laws of Switzerland. According to the company, 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.
A 10-year contract was signed between the companies on November 24, 2011.
SR Technics had raised seven invoices and the same was acknowledged by SpiceJet from time to time by issuing certificates of acceptance in relation to the bills of exchange.
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 the petitioner. Thereafter, the petitioner made repeated requests to SpiceJet to make payments under the various invoices. Since it had not honoured its commitment, the petitioner issued statutory notice under the Companies Act.
Since the notice did not evoke any response, the petitioner moved the present plea for liquidation and winding up of SpiceJet.
Opposing the plea, SpiceJet contended that the alleged debts were not legally enforceable and as such there could not be a winding up order against the company.
It was further contended that as the petitioner was not a creditor of SpiceJet in the absence of any contractual relationship of a debtor and creditor, a winding up proceeding could not be initiated.
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