Winding Up Order Stayed by Madras HC, Asked To Pay $5 Mn in 2 Weeks: SpiceJet

SpiceJet Limited owes over $24 million to Switzerland-based SR Technics.

SpiceJet. Image used for representational purpose.

(Photo: Twitter/@flyspicejet)

A day after the Madras High Court ordered that SpiceJet Limited must be wound up and its assets must be taken over by the official liquidator for non-payment of over $24 million to Switzerland-based SR Technics, the airline, in a filing to the Bombay Stock Exchange, on Tuesday, 7 December, informed that the Madras High Court has stayed its earlier order on the condition that the airline deposits $5 million within a period of two weeks.

In a letter to the Department of Corporate Services, Bombay Stock Exchange, Spicejet said:

"This is to inform you that the Madras High Court through its order dated 6 December 2021 has stayed the earlier order of winding up and appointment of an official liquidator for a period of three weeks, subject to the condition that the company deposits the amount equivalent to $5 million within a period of two weeks."

"The company is examining the order and shall initiate appropriate remedial steps, including preferring an appeal before the appellate jurisdiction within the time frame allowed by the Madras High Court. The company believes it has a good case on merits and is hopeful of having a favourable outcome in the appeal," SpiceJet further said in the filing.

SR Technics, which maintains, repairs and overhauls aircraft engines, had gone into an agreement with the airlines 10 years ago.

The Swiss company had raised invoices and the airline had issued seven bills of exchange for the monies due under the invoices.

Later in September 2012, SR Technics entered into an agreement with Credit Suisse, under which it had assigned all its present and future rights to receive payments under the agreement to the lender, Economic Times reported.

After failing to pay the monies due under the invoices, Credit Suisse had approached the court under Section 433 (e) of the Companies Act 1956, under which the court can order winding up the company if it fails to repay the dues.

However, the judge stayed the operation of his verdict for a period of three weeks to enable SpiceJet to go on appeal, on condition that the SpiceJet should deposit $5 million to the credit of the SR Technics within a fortnight, LiveLaw reported.

The judge also agreed with Credit Suisse AG counsel Rahul Balaji that SpiceJet had clearly accepted its liabilities, in terms of an agreement entered between the two companies for a period of 10 years in 2011, by executing certificates of acceptance.

(With inputs from Economic Times, and LiveLaw.)