Madras HC dismisses Spicejet winding up order

The Madras High Court on Tuesday dismissed an appeal application moved by air carrier firm SpiceJet challenging a single judge’s verdict directing the company to wind up its operation for not returning the defaults to a Swiss-based company.

A Division Bench comprising Justice Paresh Upadhyay and Justice Sathi Kumar Sukumara Kurup had passed the orders on dismissing SpiceJet’s appeal. The bench has also suspended the order till January 28, 2022, easing the company to appeal against Madras HC’s order before the Supreme Court.

SpiceJet had entered into a ten-year agreement with the Swiss-based SR Technic, involved in aircraft maintenance, overhauling of aircraft engines, modules, components, and assemblies on November 24, 2011.

SR Technic raised seven invoices, which were acknowledged by SpiceJet periodically by issuing a certificate of acceptance about the transactions.

However, in 2012, SR Technic had authorised Credit Suisse AG, a Zurich-based stock corporate firm, to collect payments in present and future on behalf of SR Technics from its clients.

After that, SpiceJet stopped acknowledging the invoices raised by Credit Suisse AG. Therefore, the firm approached Madras HC seeking a direction to wind up the operation of SpiceJet for taking over the assets of the company by the official liquidator under the provisions of the Company Act.

On December 6, 2021, Justice R Subramanian on hearing the petition moved by Credit Suisse AG, passed orders to wind up the operations of SpiceJet for the non-payment of defaults.

Appealing against the single judge’s order, SpiceJet contended it has neither entered into any agreement with Credit Suisse AG nor a creditor of SpiceJet.

In the absence of contractual relation, the court could not pass an order to wind up the company.

However, the judges rejected those contentions and upheld the single judge’s order for winding up the operations.