Supreme Court pulls up SpiceJet in dispute with Credit Suisse; 'Not a way to run airlines'

In relation to the monetary dispute between SpiceJet and the Swiss firm, Credit Suisse AG, the Supreme Court, on Friday, reproved the former against deficits in the airlines' operations and its businesses. Staying the Madras HC's order for three weeks, the Supreme Court warned the Ajay Singh-led airline that it would declare SpiceJet insolvent if they "do not want to run the airlines." SpiceJet owes Credit Suisse over $24 million (over Rs 179 crore)

"If you do not want to run the airlines, we will declare you insolvent. This is not the way to run an airlines," Chief Justice of India (CJI) NV Ramana said.

"What is this? Do you want to run or close the shop... you better produce your financial status. It is not the way to run your airlines. You cannot say that you are a busy airline and I do not want to pay anybody. You see this a serious matter. If you do not want to run the airline then we will declare that you are insolvent and go for the liquidation," the Supreme Court said.

SpiceJet vs. Credit Suisse AG

In the case at hand, Credit Suisse AG had moved a winding-up petition before a company's court which the court had admitted. Subsequently, SpiceJet appealed the order before a single-judge bench of the Madras High Court which was rejected and an official liquidator was directed to take over the assets of the low-cost airline.

Credit Suisse AG has alleged that SpiceJet failed to honour its commitment to pay an invoice of over $24 million (Rs 1,79,84,30,400) raised by it towards maintenance, repairing, and overhauling of the aircraft engines and components. On the other hand, the airline company has alleged that the Swiss company had produced 'fraudulent misrepresentation' of receiving Directorate General of Civil Aviation's (DGCA) approval. Therefore, the entire contract and transaction is void and not applicable under any statute of the country, SpiceJet added. 

Before the Madras HC, the Indian airline company argued that DGCA's approval to SR Technics was missing for a period from 2009 to 2015, however, the Court dismissed the contention. It stated that the reasoning was not applicable as the airline entity continued to avail services of Credit Suisse AG. 

Following senior advocate Harish Salve - who is appearing for the airlines - arguing and admitting that SpiceJet is working out the matter, the Supreme Court adjourned the case for a period of three weeks.