The Supreme Court on September 11 asked SpiceJet's CMD Ajay Singh to furnish proof of deposit of $500,000 and $1 million by September 15, in the ongoing battle between the low-cost carrier and Credit Suisse. The case will be heard on September 22 and an affidavit to this effect is to be filed.
A two judge bench of the apex court warned Ajay Singh of ‘drastic measures’ if he does not comply with the order, and has asked the embattled CMD to be present in future hearings, along with SpiceJet’s company secretary.
As per terms of the settlement from May 2022, there is an outstanding of arrears amounting to $4 million as per SpiceJet and $4.5 million as per Credit Suisse.
At the hearing today, Singh's lawyer Shyam Divan argued that SpiceJet has paid $ 900 thousand to Credit Suisse after it issued contempt notice to Singh on August 14. However, the court was not satisfied with this response.
During the course of the hearing, the court orally observed that there is a clear contempt of court on Ajay Singh's part as he has not followed the terms of the May 2022 order.
On August 14, the SC issued a contempt notice to low-cost airline SpiceJet's chairman and managing director Ajay Singh on a plea filed by Credit Suisse, accusing the cash-strapped carrier of failing to comply with a court-approved settlement plan for payment of dues, adding to the Gurugram-based company's troubles.
Also read: SpiceJet's stock got a push last week. What’s driving it?
Casefile:
The Supreme Court had been adjourning Credit Suisse's contempt plea on SpiceJet’s undertakings to continue paying $500,000 every month. This time, the court refused to adjourn the case without issuing a notice.
In May 2022, SpiceJet and Credit Suisse entered into an agreement to resolve a payment dispute, which arose after the airline failed to clear dues to SR Technics, a Switzerland-based company that provides aircraft maintenance services. SpiceJet defaulted on dues amounting to $20 million.
The Madras High Court had ordered the winding up of SpiceJet due to the dispute. The Supreme Court stayed the order on a plea by the airline and urged both parties to settle the dispute.
An agreement was reached in May 2022, requiring SpiceJet to make an upfront payment and the remaining balance over an agreed timeline.
In 2011, SpiceJet entered into a 10-year contract with another SRT Technics for engine maintenance, which, in turn, sold its right to receive payments under seven invoices to Credit Suisse in 201
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