The National Company Law Tribunal on Monday dismissed the insolvency petition filed by Willis Lease Finance Corporation against budget airline SpiceJet. Willis Lease Finance Corporation had filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, against SpiceJet for default of $6.58 million or Rs 53.96 crore for 107 invoices for 11 engines leased by four separate entities in April.
SpiceJet had argued that the petition filed by Willis Lease Finance Corporation was not maintainable as it was neither the operational creditor nor an assignee of the debt from the four-engine lessors. The senior counsel had further argued that the law does not permit four operational creditors to combine claims and file a single insolvency petition. The SpiceJet counsel had also noted that WLFC had filed the application based on an earlier demand notice, whereas a fresh demand notice had to be issued for a new application.
WLFC had withdrawn the earlier application as some of the receipts fell during the Covid period, covered by Section 10A of IBC, 2016, which provides immunity to corporate debtors.
On the other hand, the WLFC counsel had argued that the service agreement with four operational creditors, lease agreements and emails by the airline acknowledging the debt established its claim to file insolvency proceedings against the company.
The senior counsel arguing WLFC’s case had relied on the service agreement to further the claim of the servicer to collect lease rent and charges on behalf of the four lessors.
The service agreement also stated that it could “take reasonable efforts to enforce rights and remedies of the lessor under the lease in the event of loan payment by the relevant due date.”
The budget airline is facing insolvency proceedings from three other aircraft lessors, Celestial Aviation Services Ltd, Aircastle (Ireland) Ltd and Wilmington Trust SP Services (Dublin) Ltd, and another from a vendor, Raymach Technologies.
SpiceJet has settled with one lessor, Carlyle Aviation Partners, where it issued 48.1 million shares on a preferential basis to nine associated entities to clear Rs 231 crore dues.
Source: Economic Times