Engine lessor moves insolvency plea against SpiceJet over $12 million dues

New insolvency plea filed against SpiceJet in NCLT

Engine Lease Finance BV, an engine lessor to SpiceJet, on May 29 moved an insolvency plea against the low-cost airline for non-payment of over $ 12 million for the eight engines it had leased.

The case was heard briefly by the NCLT on May 29 and then adjourned to May 30 as SpiceJet sought time to respond to the plea.

During the course of the hearing, senior advocate Ramji Srinivasan and lawyer Anandh Venkatramani, who appeared for the lessor took the court through the documents pertaining to the case and the nature of the lease between the parties and urged it to issue a notice to SpiceJet.

Srinivasan and Venkatramani were instructed by Saket Satapathy, partner of the law firm Tuli & Co.

Senior advocate Krishnendu Dutta, who appeared for the airline, told the court that they received the papers of the plea just this morning and asked the court to adjourn it by a day. The tribunal thus adjourned the case.

In 2023, Engine Lease Finance had moved the Delhi High Court stating that they had terminated its lease with SpiceJet with respect to two engines but  the airline continued to use it. As per the agreement, the airline cannot continue using the engine once the lease is terminated. The lessor sought the court's order to restrain SpiceJet from using its engine.

In October 2023, the lessor and SpiceJet arrived at an interim settlement. The engine lessor agreed not to pursue the stay application against the airline.

Engine Lease Finance BV moved the court in December, alleging that the budget carrier had failed to make payments as agreed. The case is still pending in the high court even though the engines have been grounded and returned to the lessor.

This lessor had also leased engines to the now grounded airline Go First and is fighting a litigation against it in the NCLT.