Celestial Aviation Services moves insolvency plea against SpiceJet

A SpiceJet aircraft.

Celestial Aviation Services Limited, a lessor, has filed a plea to initiate Corporate Insolvency Resolution Process (CIRP) against low-cost airline SpiceJet at the National Company Law Tribunal (NCLT).

The plea, which has been filed under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016, is likely to come up for hearing on August 3.

Celestial is the fifth lessor to move an insolvency plea against SpiceJet. Pleas by lessors such as Willis Lease Finance, Aircastle and Wilmington are already pending at the NCLT. Willis' plea is likely to come up for hearing on August 8.

The NCLT on May 8 issued notice in Aircastle's first plea and sought the airline's response. SpiceJet had accordingly filed a response to the plea, and Aircastle sought a short adjournment on May 25 to respond to the airline's reply. Subsequently, SpiceJet had filed an application questioning the maintainability of Aircastle's insolvency plea. SpiceJet has also questioned the maintainability of Aircastle's second insolvency plea and Wilmington's plea.

Meanwhile, the Delhi High Court on July 31 upheld the arbitral award in favour of Kalanithi Maran and against low-cost airline SpiceJet, making way for Maran to press for enforcement of the award.

Spicejet and the CMD of the airline, Ajay Singh had sought for setting aside the portion of the award which directed them to refund Rs 270 crore to Kal Airways and Kalanithi Maran. Additionally, they sought to waive the 12 percent interest on warrants and set aside the 18 percent interest granted in the award.

Kal Airways and Kalanithi Maran also requested to invalidate the portion of the award that included the interest on the amount of Rs 270 crore for the non-issuance of compulsory redeemable preference shares.

Both challenges have been rejected by the Delhi High Court.