Madras High Court dismisses SpiceJet appeal

Madras High Court dismisses SpiceJet appeal

It reasoned no bona fide defence found on behalf of the airline

The Madras High Court has dismissed an appeal by SpiceJet airline challenging the order of a company court admitting a winding-up petition and appointing an official liquidator.

The division bench of Justices Paresh Upadhyay and Sathi Kumar Sukumara Kurup rejected the argument of the appellant that there was a bona fide dispute regarding the payment.

The court observed, "The records show that the appellant company blows hot and cold together to suit its convenience." It considered the contention that had the appellant known of SR Technics' lack of Directorate General of Civil Aviation (DGCA) clearance, it would not have availed their services.

The issue arose when SpiceJet availed an engine maintenance facility from SR Technics, whose payment it wished to defer. For this purpose, it sought the service of the respondent, Credit Suisse, a global financing firm.

According to the respondent, the airline was indebted to it for more than $24 million. It maintained that receiving no response even after sending a notice the creditor had moved the company for winding-up.

The respondent had made payments to SR Technics on behalf of the appellant. However, the non-payment of the amount to the respondent led to the winding-up petition.

The appellant submitted that there was a serious dispute on the amount payable to SR Technics since they did not have a valid license from the DGCA. Therefore, it could not have legally maintained the aircraft. Consequently, the appellant claimed that no amount was payable.

The airline contended that the documents relied on by the respondent were not stamped. Hence, the Indian courts would not take cognizance. The appellant prayed that the company court order's admission of the winding-up petition and appointing a provisional liquidator be set aside.

But the bench pointed out that at the time of the petition, the issue was not of whether the document was stamped or not. The only point to be verified was whether the debt was bona fide disputed.