The airline company is challenging the Madras High Court division bench order that had on December 7 upheld its single judge’s decision to wind up the company.
Madras High Court
The Supreme Court on Tuesday decided to hear on Friday the Ajay Singh-owned SpiceJet’s plea against a Madras High Court order to wind up the company for non-payment of unpaid dues to the tune of $24.01 million to Swiss stock corporation Credit Suisse AG.
A bench headed by Chief Justice N V Ramana told it will hear the case on Friday after senior counsel Mukul Rohatgi, appearing for SpiceJet, sought an urgent hearing because any further hold will guide to the carrier’s shutting down. “The protection is till Friday, please list on Friday or Monday,” Rohatgi told.
- The airline company is challenging the Madras High Court division bench (DB) ruling that had on December 7 kept its single judge’s judgment to wind up the company. However, the DB had expanded the interim visit till Friday as the carrier had already deposited $5 million in the court. The single judge had ordered the winding up of SpiceJet and requested the official liquidator to take over the airline’s assets.
The Division Bench had led in favor of Credit Suisse AG, a Zurich-based company, which was given the right to welcome the payments due to SR Technics. Credit Suisse had moved the winding-up petition according to failure on parts of SpiceJet to honor some invoices the former had increased in 2013.
SpiceJet in its appeal told
The HC had rejected the airline’s stand that SR Technics did not have a valid license to carry out aircraft maintenance services from the Director-General of Civil Aviation as required under the Aircraft Act and, therefore, the enforcement of the claim would be against public policy.
SpiceJet in its appeal told that the DB erred in holding that a purported debt arising out of services rendered in violation of the Aircraft Act can be a basis for admission of a winding-up order of a company.
It expressed that the likely debts are not legally enforceable under Section 433 of the Companies Act and there cannot be a winding-up order as the Credit Suisse is not a creditor of the
carrier and that the enforcement of such claims is contrary to public policy and amounts to putting a premium on illegality. Besides, the deals between SpiceJet and SR Technics do not authorize assignments to Credit Suisse.
Despite including reported the undisputed finding that SRT was an unapproved maintenance organization not authorized to maintain aircraft engines under the Aircraft Act and was acting in breach of the Engine Maintenance Agreement, the DB ought to have set aside the winding-up order by holding that SRT or the Respondent as its assignee is not entitled to need payment from the petitioner, it told.
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The airline had in November 2011 entered a 10-year contract for servicing of aircraft with another Swiss engine maintenance services firm SRT Technics, which, in turn, sold its right to acquire payments based on the contract to Credit Suisse in September 2012.
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