NCLT Issues Notice To SpiceJet Over ₹68 Crore Insolvency Plea

The National Company Law Tribunal (NCLT) on Thursday has issued a notice to low-cost carrier SpiceJet in response to an insolvency plea filed by its aircraft lessor, Falgu Aviation Leasing Limited, over a default of $8.1 million (approximately ₹68 crore).

This marks the fourth such insolvency plea against SpiceJet by its aircraft lessors in just ten days.

In addition to Falgu, other lessors, including Sabarmati Aviation Leasing Limited and JetAir 17 Limited, have also initiated insolvency proceedings against SpiceJet.

However, the NCLT has yet to issue notices in these cases, as SpiceJet’s legal team argued they had not received the relevant case files.

During the proceedings, Advocate Kunal Tandon, representing Falgu, explained that in 2021, the company had filed a plea in the Delhi High Court to enforce a decree for the repayment of dues. In August 2022, Falgu and SpiceJet reached a settlement, which led to the withdrawal of the execution.

However, SpiceJet failed to adhere to the repayment schedule outlined in this agreement, prompting the termination of the lease in 2023. With payments still outstanding post-termination, Falgu was compelled to seek insolvency.

Senior Advocate Krishnendu Dutta, along with Advocate Sanjay Gupta, who represented SpiceJet, argued that Falgu should be classified as an operational creditor under the Insolvency and Bankruptcy Code of 2016.

They contended that the case was fundamentally based on a settlement agreement, which should render the plea non-maintainable. Dutta requested that the NCLT refrain from issuing a notice in this matter.

Despite these arguments, the NCLT’s coram, consisting of Judicial Member Mahendra Khandelwal and Technical Member Dr. Sanjeev Ranjan, determined that issuing a notice was necessary. They advised SpiceJet to address preliminary issues in its forthcoming counter.

On October 14, another lessor, Aviator ML 29641 Limited, also approached the NCLT against SpiceJet over a default involving ₹58.64 crore.

Tandon’s representation of Falgu was supported by the law firm Wadia Ghandy, with contributions from lawyers Pranaya Goyal, Marylou Bilawala, Chiranjivi Sharma, Sharleen Lobo, Apoorva Kaushik, Vasu Gupta, Saakshi Malpekar, Uday Mathur, and Nehal Gupta.

In a related development, last month, the Delhi High Court upheld an order requiring SpiceJet to ground three of its engines due to defaulted payments to French engine lessors.

A Bench comprising Justices Rajiv Shakdher and Amit Bansal refused to interfere with the single-judge order mandating that the engines be grounded, reaffirming the lessors’ rights amid ongoing payment disputes.

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