Supreme Court of India has given comtempt notice to SpiceJet over its inability to pay dues to a Swiss firm. The airline owes $6.5 million to the Swiss firm.
SpiceJet in Supreme Court
Supreme Court has summoned the Managing Director and Chairman of SpiceJet – Ajay Singh in a case related to Swiss firm Credit Suisse. The Supreme Court has asked the MD to appear in person in the next hearing. This is not the first time that the court has asked Ajay Singh to appear in person. Recently, Delhi High Court on request of Kalanithi Maran summoned Ajay Singh. The court in 2020 asked the airline to file an affidavit which includes the airline’s assets and liabilities. The airline failed to do so and hence, the Delhi HC summoned Ajay Singh. He is expected to be present during the court hearings on August 24.
SpiceJet vs Credit Suisse
Credit Suisse in 2013 filed an insolvency plea against SpiceJet requesting liquidation of the airline’s assets. The Swiss firm filed the plea for non-payment of servicing of engines and components. At that time, the airline owed $24 million to Credit Suisse. In January 2021, Madras High Court approved the plea of Credit Suisse and directed the liquidator to seize the airline’s assets.
At that time, the airline reached Supreme Court and requested stay on the order. The Highest court put the order on hold and asked the airline to settle the dispute with Credit Suisse. The airline was given a financial plan in which payment was to be done in tranches.
What is the problem?
Credit Suisse alleged that SpiceJet has failed to pay the dues to the investing banking company. The airline as of now owes $6.5 million to Credit Suisse. Due to this, Supreme Court has issued a contempt notice to the airline. It seeked reply within next 4 weeks. The court has asked the Managing Director to appear in person.
SpiceJet earlier in a statement said that the debt is old. The promoters have changed after that. Still the airline is intending to pay the amount.
The airline today announced its quarterly financial results, where it posted a net profit of Rs 205 crore in Q1 FY24. The airline has finally recorded profit after back to back losses. In an other case, Kalanithi Maran has asked Delhi High Court permission to acquire 50% of daily revenue of SpiceJet.
Next hearing in Delhi High Court is on August 24. Ajay Singh is expected to be present.