The Madras High Court on Tuesday dismissed the appeal by SpiceJet against the single-judge order to wind up the low-cost airline on a Credit Suisse AG’s petition relating to non-payment of $24 million to SR Technics, a maintenance and repair company.A division bench of justices Paresh Upadhyay and Sathi Kumar Sukumara Kurup, extended the suspension of the order till January 28, to enable the airline to move a further appeal before the Supreme Court.“Since we have not entertained these appeals, there is nothing to be stayed so far this order is concerned.
However, to see that challenge if any to this order remains meaningful to the appellant, the stay granted by the company court which is in force till today shall stand extended till January 28,” the bench said.The Madras HC had on December 6 ordered the winding up of the airline on a petition filed by Credit Suisse-to whom SR Technics had given the right to collect all payments.
The court also directed an official liquidator to take over the assets of the airline.The order has subsequently stayed for three weeks following a plea by the airline and on the condition that it deposits $5 million with the court within two weeks.Aggrieved by the winding-up order, SpiceJet appealed against the order saying the documents relied by Credit Suisse are not stamped and therefore the courts in India will not take cognisance.
Further, S R Technics did not have a valid license from the Director-General of Civil Aviation (DGCA) and therefore it could not have legally maintained the aircraft/engines of the company and consequently, no amount could be said to be payable by SpiceJet to it and thereby there was a bonafide dispute about the said payment.SpiceJet further submitted the order on the company petition praying for the winding up of the company to be set aside and appointment of a provisional liquidator be also set aside. It was submitted that given the errors in the impugned orders, the matter may be remanded back to the company court.
The counsel for Credit Suisse AG argued that the order passed by the company court ordering admission of the winding-up petition and appointment of the official liquidator can not be said to be erroneous in any manner and no interference be made by this court.Dragging SpiceJet to court for non-payment of dues, Credit Suisse AG had prayed for winding up of the Indian firm under the provisions of the Companies Act, 1956 and appoint the official liquidator of the high court as the liquidator with all powers under Section 448 of the Companies Act to take charge of SpiceJet’s assets, properties, stock in trade and books of accounts.
The proceedings before the Madras High Court were raised out of an old agreement dated November 24, 2011, between SpiceJet and SRT Technics (SRT) for the provision of engine maintenance services.Credit Suisse AG initiated the company petition as a purported assignee of SRT claiming non-payment of amounts aggregating to $24.01 million under the agreement.SpiceJet opposed the petition because there was no legally enforceable debt.
After all, SRT did not possess the relevant DGCA approval for the provision of services under the agreement.According to SpiceJet, SRT made fraudulent misrepresentation to the company of having applicable DGCA approval for providing the services.The company raised a bona fide dispute claiming that the provision of engine maintenance without DGCA approval is contrary to Indian and other applicable laws and voids the entire agreement.