Madras HC’s order to wind up SpiceJet stayed for 3 weeks by SC
The Supreme Court on Friday granted three weeks to SpiceJet to resolve the financial dispute with Swiss firm Credit Suisse AG and stayed the Madras High Court order on its winding up, saying that it was a “serious matter” and the airlines cannot say it is a busy organization and would not pay. A bench headed by Chief Justice N V Ramana, while staying the publication of winding up notice and the order directing the official liquidator attached to the Madras High Court to take over the assets of the low-cost airline, questioned the approach of SpiceJet.
The bench, also comprising Justices A S Bopanna and Hima Kohli, took note of the submissions of senior advocate Harish Salve that SpiceJet would try to resolve the issue with the Swiss firm. “Senior counsel Harish Salve sought three weeks’ time for trying to resolve the matter and 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 said in its order.
At the outset, Salve sought three weeks’ time to sort out the dispute with the Swiss firm whose counsel did not oppose the plea for adjournment, but raised questions over the offer being made by the low-cost airlines. “They are saying they want to make a serious offer. They can have three weeks. What is being offered now is not even worth mentioning,” Vishwanathan said.
“What is this? Do you want to run or close the shop…You better produce your financial status. It is not the way to run your airlines. You cannot say that you are a busy airline and I do not want to pay anybody….You see this is a serious matter. If you do not want to run the airline then we will declare that you are insolvent and go for the liquidation,” the bench observed.
Salve said SpiceJet would try to “sort” it out in three weeks with the Swiss firm leading the bench to grant the time and stayed the operation on the order of the single-judge bench of the high court. SpiceJet moved the apex court against the January 11 order of a division bench of the high court upholding a recent verdict of the single judge ordering it’s winding up and directing the official liquidator attached to the high court to take over the assets.
Credit Suisse AG had moved the single-judge bench of the high court alleging that SpiceJet failed to honour its commitment to pay the bills for over USD 24 million (around Rs.180 crore) raised by it towards maintenance, repairing, and overhauling of the aircraft engines and components.
Spice Jet is considered a politically exposed firm, founded in 2002 by Ajay Singh who was a close confidant of former Union Minister and BJP leader Pramod Mahajan. When Congress came to power in 2004, soon SpiceJet’s ownership was handed over to coalition partner DMK family members Maran family. When BJP came back to power in mid-2014, dubiously again ownership came back to Ajay Singh.
Interestingly, Ajay Singh headed SpiceJet which is facing a default of Rs.180 crore was even considered as a potential bidder for Air India. This was a clever ploy to avoid the single bidding of Tata Group and it is widely known that Ajay Singh was fielded as a dummy bidder to facilitate Tat Group’s acquisition of Air India.
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