Insolvency Plea over ₹68 Crore default: NCLT issues notice to SpiceJet

The National Company Law Tribunal ( NCLT ) issued notice to SpiceJet in relation to an insolvency plea filed by its aircraft lessor Falgu Aviation Leasing Limited over a default of $8.1 million or ₹68 crore. This is the fourth insolvency plea filed against SpiceJet by its aircraft lessors in the last 10 days.

In addition to Falgu, Sabarmati Aviation Leasing Limited and JetAir 17 Limited have also filed insolvency pleas before the NCLT in addition to Falgu. Advocate Kunal Tandon appearing for Falgu stated that Falgu had in 2021 filed a plea in the Delhi High Court seeking execution of a decree obtained for repayment of dues. Subsequently, Falgu and SpiceJet entered into a settlement in August 2022, under which the execution was withdrawn. SpiceJet failed to stick to the repayment plan as per the settlement agreement, as a result of which they had to terminate the lease in 2023. Since the payments have not been forthcoming even after termination of the lease, the airline had to move an insolvency plea..

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Senior Advocate Krishnendu Dutta and Advocate Sanjay Gupta, who appeared for SpiceJet, contended that Falgu could be considered an operational creditor under the Insolvency and Bankruptcy Code, 2016 as its entire case was based on a settlement agreement.

A coram comprising Judicial Member Mahendra Khandelwal and Technical Member Dr Sanjeev Ranjan viewed that the issuance of notice is necessary in the case and asked SpiceJet to raise the preliminary issues in its counter.

Recently, the Delhi High Court upheld an order directing SpiceJet to ground three of its engines for defaulting on payment to French engines lessors. The bench refused to interfere with single-judge's order directing SpiceJet to ground the engines.

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