Madras High Court orders winding up of SpiceJet over unpaid dues

Madras – The Madras High Court has issued the winding-up order to the private carrier SpiceJet over unpaid dues. The HC further directed the official liquidator to take over the assets of the airline. SpiceJet is set to be liquidated to pay more than $21 million owed in debt to Swiss-based company Credit Suisse AG.

SpiceJet had to make payment to the company for maintenance, repair, and overhauling of aircraft engines,  assemblies, components, and parts. SpiceJet had entered into a contract in 2011. After the failure of payments, the banking institution had issued multiple notices over time to SpiceJet asking for payment. Credit Suisse AG wanted an automatic winding-up order against SpiceJet.

Justice R Subramanian on SpiceJet

A single-judge bench of Justice R Subramanian passed the order on Monday. He also said in the order, “I am therefore of the opinion that this Company Petition should be allowed and the respondent Company directed to be wound up.” However, the airline had sought time to file an appeal against the winding-up order before the division bench.

Credit Suisse AG

Credit Suisse AG holds a right to receive payments on behalf of SR Technics. In 2012, the company Credit Suisse AG had signed a financing agreement with SR Technics. Under the agreement, Credit Suisse AG was assigned the rights to receive payments.

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Credit Suisse AG wanted a winding-up order against SpiceJet because the company assumed that the airline cannot pay debts as per Section 434 of the Companies Act. Subsequently, the petition was filed by Credit Suisse AG to receive pending dues, on behalf of SR Technics. The Swiss-based company then said that the winding-up can only be stopped only if the airline can show that the debt is not enforceable.