Engine Lessor Willis Lease Finance Corporation (WLFC) Tuesday argued that the insolvency petition filed by the company against airline Spicejet before the National Company Law Tribunal was maintainable, and the demand notice issued by the lessor could not be questioned.
The reply came in response to the arguments made by Spicejet questioning the maintainability of WLFC’s petition to initiate insolvency proceedings against the airline for failure to pay lease rent.
The senior counsel arguing for the engine lessor claimed that a fresh demand notice, as contended by Spicejet counsel, was not needed as the earlier notice issued by the lessor contained specifics of the 107 invoices on which Spicejet defaulted and had no new additions to the list.
The tribunal asked WLFC counsel whether a change in invoices warranted a fresh demand notice to be issued.
“Demand notice cannot be questioned,” he stated, pointing out that the new petition did not bring any new facts to light, and the purpose of the notice was to bring the attention of Spicejet to default.
He further argued that the language of the last order, which allowed the engine lessor to withdraw its earlier petition, granted the petitioner an implicit direction to file a fresh petition.
Willis Lease Finance Corporation had withdrawn the earlier petition as nearly a third of the invoices fell during the Covid period, where the government had granted immunity to corporate debtors against default under Section 10A of the Insolvency and Bankruptcy Code, 2016.
Senior counsel for Spicejet reiterated that the tribunal had given the lessor the liberty to withdraw but not file a fresh petition. Moreover, WLFC could not file a fresh application based on an earlier demand notice. Spicejet’s primary contention has been that WLFC had no locus to file a petition as it was neither the operational creditor nor an assignee of debt in this case but a service provider for four operational creditors.
The senior counsel argued that four OCs could not file a combined insolvency petition, like the financial creditors, as the law does not permit such a provision.
As per the petition filed by WLFC, Spicejet owes $6.58 million or Rs 53.96 crore for 107 invoices for 11 engines leased by four separate entities.
The matter is listed for August 11, where the lessor will have to satisfy the court on maintainability regarding the matter of four OCs and WLFC’s locus in the case.
Three petitions by aircraft lessors to initiate corporate insolvency proceedings against the airline are listed on August 17 and one on August 18.
