Madras High Court Orders Winding Up Of Spicejet Over Outstanding Dues
In a petition submitted by a Swiss business for outstanding dues, the Madras high court announced the winding up of private carrier SpiceJet Ltd and ordered the professional liquidator assigned to the court to take over all its properties.
The airline claims that the court has granted a three-week delay of the ruling on the provision that it submit the equal amount of $5 million within two weeks. SpiceJet stated that it would take appropriate corrective action, including filing an appeal.
The court was hearing an enterprise plea from Credit Suisse AG, a Swiss stock corporate entity, which requested that the Indian firm be wound up under the Companies Act, 1956 and that the authoritative liquidator of the High Court is appointed as the Liquidator including all power and authority under Section 448 of the Companies Act to take command of SpiceJet's holdings, estates, securities in trade, and accounting records.
Credit Suisse AG, as a supposed administrator of SRT Technics, is said to have failed to pay USD 24.01 million underneath the contract, according to SpiceJet.
The respondent company had horribly struggled to meet the Supreme Court's three-part test in Mathusudan Govardhandas & Co. v. Madhu Woollen Industries Private Limited and had thus delivered itself financially responsible to be wound up for its failure to pay its liabilities under Section 433 (e) of the Companies Act 1956, Justice R Subramanian stated in his attempt on Monday, ordering the private provider to be terminated and the authoritative liquidator to take over all its property.
SpiceJet, as per the applicant, used SRT Technics in Switzerland for upkeep, replacement, and refurbishing of jet engines, subsystems, elements, kits, and parts that are required for its functions.
On the 24th of November, 2011, SpiceJet and SRT Technique signed a 10-year deal for the provision of such operations. Payment arrangements were also agreed upon. A supplementary agreement was also signed on the 24th of August, 2012, to amend certain of the conditions of the original agreement. The revisions included a delayed payment programme as well as an extension of time for payment of money due under certain invoices. Because of the general rise in costs, the 2012 supplementary agreement contained adjustments to flying hour rates as well as escalation clauses.
SRT Technique had generated bills for the activities underneath the contract, and SpiceJet had generated seven bills of exchange for the funds due underneath the bills.
It also accepted the liabilities from period to period by giving certificates of acceptance regarding bills of exchange, implying that the respondent did not contest the validity of the claim stated in the invoices.
In September 2012, the petitioner, Credit Suisse AG, engaged in a financing arrangement with SRT Technics, while the latter surrendered all of its existing and foreseeable rights to collect payments underneath the agreement to the petitioner business through a transaction agreement. SpiceJet's bills of exchange generated under the 2011 contract and the 2012 supplemental agreement were included in the assignment. The petitioner is eligible to collect payment of the sums owed underneath the seven bills from Spicejet because of the assignments completed by SRT Technics, the petitioner business asserted.