In a relief for low-cost airline SpiceJet, the National Company Law Tribunal (NCLT) on December 4 dismissed a plea to initiate insolvency against the airline filed by aircraft lessor Willis Lease Finance over unpaid dues.
SpiceJet had questioned the maintainability of Willis' plea because they had filed a similar plea earlier this year but chose to withdraw it owing to certain technical defects. They filed a plea in April 2023 over unpaid dues. The tribunal heard SpiceJet's application questioning the maintainability of the plea for over six months before dismissing it on December 4.
During the earlier hearings, 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.
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, and 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.
Insolvency pleas against SpiceJet:
Three aircraft lessors have filed four insolvency pleas against SpiceJet in 2023 for the non-payment of dues. Other than the aircraft lessors, a tech services provider has also moved an insolvency plea against SpiceJet.
Aircastle Ireland Ltd, Wilmington and Celestial filed petitions, asking NCLT to admit SpiceJet to the insolvency process to enable them to recover their dues. Willis' plea was dismissed today.
While the NCLT has issued notice only in Aircastle's first plea, it has been urging the airline to settle with the lessors. In August, SpiceJet allotted over 48 million shares to nine aircraft lessors to clear outstanding dues worth 2.31 billion rupees (nearly $28 million), as the troubled airline looks to return to full operations
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