NCLT Demands Explanation From Spicejet On Lessor's Petitions

In a latest development, National Company Law Tribunal on August 17 asked Spicejet to explain why a notice in a petition submitted by aircraft lessor Aircastle (Ireland) Limited should not be served to the airline.

The counsel from Aircastle (Ireland) Ltd placed three judgments on record pointing that the same operational creditor could file separate petitions if the invoices were over Rs 1 crore threshold prescribed for insolvency cases, according to a report published in Economic Times.

In the previous hearing, the tribunal asked the lessor to satisfy if the similar operation creditor could file multiple petitions. The lessor's counsel stated that "nothing in the Code stops an operational creditor from filing separate petitions" as long as invoices were above the threshold, added the Economic Times report.

While the tribunal noted that a notice could be issued in the matter, the senior counsel for the airline asked for a day's time to study the judgments. The matter is listed for August 18, along with a petition filed by yet another lessor Wilmington Trust SP Services (Dublin) Ltd. Spicejet has been arguing against the maintainability of Wilmington's petition claiming that it is a subsidiary of Aircastle (Ireland) Ltd.

Meanwhile, Spicejet had also submitted a petition questioning the maintainability of the first application filed by Aircastle (Ireland) Ltd.

Spicejet had specified two defaults pertaining to the validity of the power of attorney and affidavit, further stating that the airline was protected as the default occurred during the Covid time, where the law offers protection under Section 10A of the Insolvency and Bankruptcy Code, 2016.

In the matter of maintainability, the NCLT granted the budget carrier one week time to file a rejoinder and listed the matter for September 15.

In another petition filed by a new aircraft lessor Celestial Aviation Services Ltd, for default of $29.9 million for nine aircraft, the tribunal granted two weeks to the lessor to confirm if Spicejet had sent a reply to the demand notice, as per the Economic Times report.

Now Celestial Aviation Services Ltd is the fourth lessor that has filed an insolvency petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, against the budget carrier. The Celestial Aviation matter is also listed for September 15.