Willis Lease Finance Corporation requested the National Company Law Tribunal, Delhi, to issue a notice in the insolvency case filed against Spicejet on Monday.
The senior counsel for WLFC argued that the company was within its rights to file an insolvency petition Spicejet under Section 9 of the Insolvency and Bankruptcy Code, 2016.
The counsel referred to the mail correspondence between WLFC and Spicejet to establish that the servicer was handling debt negotiations in this case. The counsel also referring to the service agreement showed that the agreement allowed it on behalf of the operational creditors to collect dues.
The service agreement allows WLFC to “take reasonable efforts to enforce rights and remedies of the lessor under the lease in event of loan payment by the relevant due date,” on behalf of the engine lessors.
“Service agreement, mails and forbearance agreement have to be read in conjunction,” the counsel said, claiming that these establish the right of WLFC to file an insolvency application.
Spicejet has argued against the maintainability of WLFC’s application claiming that it is neither the operational creditor nor an assignee of debt, but a mere service provider.
The counsel for the airline claimed that there was no assignment agreement but just a service agreement.
The tribunal inquired what prevented the lessor from approaching the tribunal to file an insolvency petition against the airline.
Spicejet counsel, at an earlier date, had also raised concerns about four operational creditors filing a single insolvency application, which is not permissible under IBC, 2016.
“We had 13 lease deeds and different lessors, and we did not wish to initiate multiple proceedings,” the senior counsel for WLFC claimed.
The tribunal will hear further arguments from airline’s senior counsel on October 17.
Spicejet is also facing four other petitions from aircraft lessors for initiation of corporate insolvency proceedings. Spicejet has argued against maintainability of three of those petitions.
