Relief for SpiceJet, as Supreme Court grants 3 weeks to resolve payment disputetext_fields
New Delhi: The Supreme Court has allowed ailing domestic carrier SpiceJet three weeks to resolve it's payment dispute with Credit Suisse after the company requested an immediate hearing on Friday amidst fears that it would "fold" if not given reprieve.
The order also stays the Madras High Court order to liquidate the company under the existing Companies Act, which directs an official liquidator to begin the procedure.
"Senior counsel Harish Salve sought three weeks' time for trying to resolve the matter and Mr K V Vishwanathan (appearing for the Swiss firm) also agreed to the adjournment. Meanwhile, the high court order is stayed for three weeks," the bench, headed by Chief Justice N V Ramana, and justices A S Bopanna and Hima Kohli, ordered.
The January 11 order was upheld by a division bench of the High Court, after SpicJet paid $3 million which the Madras High Court took cognizance of an extended the liquidation date to January 11. It owes Credit Suisse up to $24 million dollars.
The Swiss company had filed a case against the Indian domestic carrier alleging non payment of dues dating back to 2011, stating that SpiceJet had availed of the services of SR Technics for maintanence and repair of their aircraft. Special clauses were added to the agreement to account for inflation and to allow payback in increments, Credit Suisse said.
SpiceJet on the other hand fought unsuccessfully to argue that it could not owe the dues as SR Technics was not approved by the Directorate General of Civil Aviation (DGCA) in India. The appeal said adding that an 'illegal claim' for dues would not come under the definition of 'debts' as stated in the Companies Act.
SpiceJet's losses this financial year have grown to more than ₹ 561 crore from a year ago. The airline's stock is down by about 30% in the past year. The negative net worth of the airline is close to what it was in 2014, when it was about to shut operations.