SpiceJet-Credit Suisse Case: SC Warns SpiceJet CMD On Facing Jail Over Non-Payment Of Dues

The Supreme Court has recently slammed private airliner SpiceJet Limited Chairman and Managing Director Ajay Singh warning him that he will be sent to Tihar jail for non-compliance with its order on making payment to global investment bank and financial services firm Credit Suisse AG.

A bench comprising of Justices Vikram Nath and Ahsanuddin Amanullah asked Singh to pay USD 5,00,000 towards an installment to global investment bank and financial services Credit Swiss along with a USD 1 million defaulted amount.

“We have to move to the next drastic step. We are not worried even if you shut down,” the bench said as it was disappointed over the “dilly-dally business”.

The bench on Monday stated, as it asked Singh and the company secretary of SpecieJet to be present during the hearings on September 22 and make the payment. “It is too much. We will send you to Tihar jail if you don’t pay.”

According to the Swiss firm, SpiceJet availed the services of SR Technics, Switzerland, for maintenance, repair, and overhaul of aircraft engines, modules, components, assemblies, and parts, that were mandatory for its operations.

An agreement for such services was entered into between SpiceJet and SR Technics on November 24, 2011 for 10 years. The terms of payments were also agreed upon.

SR Technics gave Credit Suisse the right to receive payments from SpiceJet for the services.

Earlier, SpiceJet and Credit Suisse told the Supreme Court that they reached a settlement of their financial dispute.

As per Switzerland-based company Credit Suisse AG, SpiceJet failed to honour its commitment to pay the bills for over USD 24 million raised by the Swiss company towards maintenance, repairing, and overhauling of the aircraft engines and components.

Credit Suisse AG, a stock corporation registered under the laws of Switzerland, stated that SpiceJet had availed services of SR Technics, Switzerland, for maintenance, repair, and overhauling of aircraft engines, modules, components, assemblies, and parts which are mandatory for its operations.

On November 24, 2011, a 10-year contract was signed between SR Technica and SpiceJet. Meanwhile, SR Technics entered into a financing agreement with Credit Suisse AG on September 26, 2012, and assigned all its present and future rights of receiving payments to Credit Swiss.

Credit Swiss stated that it made repeated requests to SpiceJet for making payments under the various invoices and since SpiceJet didn’t honour its commitment, the Swiss company issued a statutory notice under the Companies Act.