The National Company Law Tribunal (NCLT) on August 8 orally observed that Willis Lease Finance Corporation, which has filed an insolvency plea against low-cost airline SpiceJet, should have sent a fresh notice to the airline after it withdrew its previous plea.
Willis had previously initiated an insolvency plea against SpiceJet for the same cause of action. However, it withdrew the plea owing to some technical defects in March 2023.
The tribunal questioned how a fresh insolvency plea could be filed for the same cause of action, without first sending a notice to SpiceJet under the provisions of the Insolvency and Bankruptcy Code, 2016. It also questioned how a new plea could be initiated for the same cause of action, without obtaining the court's permission to do so.
Senior Advocate Virender Ganda, who appeared for Willis, argued that a fresh notice was required to be sent only when the new insolvency pela introduces new invoices not contemplated in the previous notice. However, when the new insolvency plea is a mere re-filing, a notice need not be sent.
Ganda also took the tribunal through various judgments and argued that the court's permission to withdraw a plea should be construed as permission to refile it as well.
Earlier, senior advocate Krishnendu Dutta, who appeared for SpiceJet, argued that the plea was not maintainable as Willis did not have the court's permission to refile it. He argued that Willis was not the actual creditor as the engine leases had been entered into with different entities such as Wills Ireland, Willis Engine Securitisation Trust 1, among others.
According to Dutta, these companies should have assigned their rights to Wills Lease Finance Corporation to enable Willis to pursue this litigation, however, they have not done so. According to Dutta, there are nine lease agreements with four lessors and Willis Lease Finance is not a part of any of the agreements.
The tribunal will continue hearing the case on August 11.
On July 21, SpiceJet argued that Will Lease Finance Corporation is not an operational creditor, as SpiceJet's lease agreements were with companies such as Wills Ireland and Willis Engine Securitisation Trust 1 among others.
On July 4, NCLT asked Willis to convince them on how a second plea of insolvency based on the same transaction is maintainable.
Other insolvency pleas against SpiceJet
There are a total of five insolvency pleas filed by lessors against SpiceJet. Two pleas by aircraft lessor Aircastle and one plea by lessor Wilmington, one plea by Celestial aviation services.
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 filed an application questioning the maintainability of Aircastle's insolvency plea. The airline also questioned the maintainability of Aircastle's second insolvency plea and Wilmington's plea.
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