Amid the ongoing crisis in the aircraft industry where GO First, a low-fare carrier, is already under Corporate Insolvency Resolution Process (CIRP), the dispute between Spicejet and its lessors’ is heating up. Multiple petitions by the lessors seeking insolvency is a reason to be concerned for the low-fare aircraft carrier and the industry as whole.
Credit – Business Today
Aircastle, one of the Spicejet lessors, approached the Delhi Bench of National Company Law Tribunal (NCLT), this year in May seeking initiation of Insolvency proceedings under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) over unpaid dues. Aircastle made this move following the deregistration of Spicejet aircrafts after lessors of the airline submitted requests to the civil aviation regulator Directorate General of Civil Aviation (DGCA).
The Gurugram-based airline operates a fleet of Boeing 737s and Q-400s and is one of the country’s largest regional players operating multiple daily flights under the Centre’s UDAN or the Regional Connectivity Scheme. In May this year three of its leased aircrafts were deregistered on request of the respective lessors.
Although the hearing of the plea was postponed but it seems like the plea opened the flood doors. Soon after this one of its other lessors, Wilmington Trust services filed a separate petition seeking the same plea following another petition by Aircastle.
In response to such multiple petitions against the same corporate debtor the NCLT questioned the maintainability of the petition in response to which the counsel appearing for Wilmington Trust said that multiple pleas were filed just for the sake of clarity and further argued that there is no prohibition on filing multiple petitions, given that each default in payment requires a separate plea. Senior Counsel Shri Krishnendu Datta appearing for Spicejet has sought time to file rejoinder.
Contact us at contactus@hariharalaw.com for any queries regarding insolvency and its procedure.
