A court order to wind up SpiceJet was paused for three weeks by the Supreme Court today as the private airline said it is trying to resolve issues with Credit Suisse AG. The case relates to the non-payment of $24 million (Rs 180 crore) to the Switzerland-based stock corporation.
“We are asking for three weeks. We are trying to work out something,” said senior lawyer Mukul Rohtagi, appearing for SpiceJet.
“Senior counsel Harish Salve sought three weeks for trying to resolve the matter and Mr KV Vishwanathan (appearing for the Swiss firm) also agreed to the adjournment. Meanwhile, the high court order stays for three weeks,” the Supreme Court bench said.
The Madras High Court had in December last year ordered SpiceJet to wind up and start liquidation for defaulting on payment of dues to Credit Suisse. The airline approached the Supreme Court against the order in January this year.
The bench headed by Chief Justice of India NV Ramana pulled up the airline after Mr Vishwanathan (appearing for Credit Suisse) cited SpiceJet’s offer as not “worth mentioning”.
“What is this? Do you want to run or close the shop … you better produce your financial status. It is not the way to run your airlines. You cannot say that you are a busy airline and I do not want to pay anybody. You see this a serious matter. If you do not want to run the airline then we will declare that you are insolvent and go for the liquidation,” the Supreme Court said.
SpiceJet later said in a statement that “both parties are already in advanced discussions to settle the matter.”
The airline used the services of SR Technics for maintenance, repair and overhaul of aircraft but defaulted in paying them.
SR Technics assigned all present and future rights to receive payments to Credit Suisse.
SpiceJet argues that it owes dues to SR Technics and not Credit Suisse, so it cannot start the process of winding up under the Company Act.
The airline also says SR Technics did not have a valid license to carry out aircraft maintenance, so it could not enforce its claim.
The Madras High Court, however, rejecting the airline’s arguments and ordered winding up.
Today, that order was put on hold by the Supreme Court.
SpiceJet’s losses in the second quarter of the current financial year grew to more than ₹ 561 crore from a year-ago period.
The airline’s stock has declined by about 30 per cent in the past year. The negative net worth of the airline is close to what it was in 2014 when it was about to shut operations.
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