NCLT questions maintainability of Aircastle's second insolvency plea against SpiceJet

The tribunal has asked Aircastle's lawyer to explain how the plea is maintainable with some legal precedents, the case is likely to come up for hearing on July 17.

The National Company Law Tribunal (NCLT) on June 13 questioned the maintainability of aircraft lessor Aircastle (Ireland) Limited's second insolvency petition against SpiceJet.

The tribunal has asked Aircastle's lawyer to explain how the plea is maintainable with some legal precedents, the case is likely to come up for hearing on July 17.

According to the tribunal, a creditor is entitled to file one insolvency plea at a time and if the corporate debtor is admitted to insolvency, the creditor could lodge a consolidated claim with the resolution professional.

The tribunal noted that Insolvency and Bankruptcy Code, 2016 was intended to reduce the number of pleas filed and initiating a second insolvency petition may be against the rationale of the code. It also observed that a creditor cannot initiate an insolvency plea for every claim he has against a corporate debtor.

Aircastle's counsel briefly argued that the code does not prohibit the initiation of a second insolvency plea and undertook to argue the case on July 17.

Aircastles's first plea

The creditor moved NCLT claiming that SpiceJet has unpaid dues and sought initiation of insolvency proceedings under Section 9 of the Insolvency and Bankruptcy Code (IBC).

On May 8, a two-member principal bench of the NCLT headed by Ramalingam Sudhakar issued notice to SpiceJet, and listed the matter on May 17.

The tribunal had on May 17 asked the Gurugram-based airline to file a response to the lessor’s insolvency plea and explore options for settlement. 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.

Meanwhile, SpiceJet had filed a plea questioning the maintainability of Aircastle's petition on the ground that Aircastle's power of attorney granting the authority to its representative is defective and also that they had not filed a proper affidavit.

The tribunal, on June 8 directed Aircastle to file a response to the application in two weeks. The application will now come up for hearing on July 17.

SpiceJet is also facing insolvency pleas by lessor Wills Aviation and Wilmington Trust SP Services (Dublin) Ltd.