CHENNAI: A division bench of the Madras High Court on Tuesday dismissed the appeal by SpiceJet against an order winding up the firm and having its assets taken over by an official liquidator on the grounds of inability to pay dues owed to a Swiss aircraft maintenance company.
The bench consisting of justices Paresh Upadhyay and Sathi Kumar Sukumara Kurup pronounced the orders a day after the arguments were completed on Monday.
Dismissing the appeal against the single judge’s order winding up the firm, on a petition filed by Swiss-based stock corporation Credit Suisse AG, the bench extended the stay on the operation of the winding up order till January 28 so that the airline can approach the Supreme Court.
After a marathon argument on Monday, the bench reserved the orders for Tuesday. Subsequently, the orders were pronounced upholding the single judge’s verdict.
The counsel for SpiceJet cited several grounds, including lack of due approval of the civil aviation authorities for SR Technics which was engaged for maintenance of its aircraft, for setting aside the single judge’s order.
He also claimed the Swiss-based assignee firm Credit Suisse AG cannot claim rights for receiving the payments due for SR Technics.
The single judge bench of justice R Subramanian passed orders on December 6 on a company petition filed by Credit Suisse AG for the winding up of SpiceJet and takeover of its assets by the official liquidator.
The company petition was filed under section 433 (e) and (f) r/w section 434 (1) and 439 (1) (b) of the Companies Act, 1956, praying for an order to wind up Spicejet Limited and appoint an official liquidator with powers under section 448 of the Companies Act to take charge of the assets.
The petitioner stated that SpiceJet had entered into an agreement with another Swiss based company SR Technics for maintenance, repair and overhauling of the aircraft engines. The agreement, entered into on November 24, 2011, was for a period of ten years. Supplemental agreements and amendments were also made subsequently.
The SR Technics had raised invoices and SpiceJet had issued seven bills of exchange for the money due under the invoices and also acknowledged the debts from time to time by issuing certificates of acceptance.
Meanwhile, Credit Suisse AG entered into a financing agreement with SR Technics on September 26, 2012 under a transaction agreement. SR Technics assigned all its present and future rights to receive the payments of the money due under the seven invoices.
Credit Suisse AG sought winding up of SpiceJet under section 433 (e) of the Companies Act as the failure to meet its obligations was tantamount to inability to pay the debts.
The operation of the winding up was put on hold upon SpiceJet fulfilling the condition of depositing five million US dollars. Now, the stay on the order has been extended till January 28.