Credit Suisse case: Pay up or face jail, SC warns SpiceJet boss Ajay Singh

The Supreme Court on Monday told SpiceJet Chairman and Managing Director (CMD) Ajay Singh that it (the court) was “not worried” even if the low-cost airline “shuts down” and it would take “drastic measures” if Singh did not give proof of payment of $500,000 as its monthly instalment and $1 million as the defaulted amount to Swiss firm Credit Suisse by September 15.

The Division Bench of Justice Vikram Nath and Justice Ahsanuddin Amanullah came down heavily on Singh, saying he would be sent to Tihar jail if he kept on “dilly-dallying (on) the payment”.

“We are not worried if you shut down. We are not bothered even if you die. It is too much,” the Bench observed orally.

The court also told Singh and SpiceJet’s company secretary to be present for all court hearings from now on.

Singh’s Counsel Shyam Divan told the court that after the August 14 hearing they paid $900,000 to Credit Suisse but the court was not satisfied.

The next hearing is likely on September 22.

“SpiceJet acknowledges the legal process and is committed to complying with all court directives and obligations in the Credit Suisse case and will make the payment of $1.5 million (in accordance with) the court directive. (To) date, SpiceJet has already paid a total of $8 million to Credit Suisse,” SpiceJet said in a press release.

The Supreme Court had on August 14 issued a contempt notice against Singh for failing to honour the court-approved payment of dues in the $24 million dispute with Credit Suisse.

Singh was asked to respond to the notice in four weeks (till September 15).

The court on July 25 had given additional time to the airline to pay its dues to Credit Suisse as part of the court-agreed settlement between both parties.

The net profit of SpiceJet for the first quarter this financial year (Q1FY24) stood at Rs 205 crore, the company said in a BSE filing.

Senior Advocate Niranjan Reddy, appearing for Credit Suisse, had told the court in the earlier hearing that when it had filed the contempt plea, the amount outstanding was $3.9 million. However, it had increased to $4 million after SpiceJet skipped an instalment.

Divan had told the court earlier the airline would continue paying $500,000 on the 15th of every month. He had informed the court SpiceJet had paid more than $160 million to Credit Suisse so far. He also told the court he would speak to his clients to see if they could increase the monthly instalment to more than $500,000.

In 2011, the airline entered into a 10-year contract with Swiss maintenance firm SRT Technics for servicing its aircraft. SRT then turned over its right to recover the payment for the maintenance to Credit Suisse in 2012. Credit Suisse had the right to recover the dues for SRT. The payment was against seven invoices raised by SRT. After SpiceJet failed to pay some of its dues, Credit Suisse filed a plea to recover the amount in the Madras High Court.

The Swiss firm had filed a plea in the high court against the airline in 2013 for not paying over $24 million on maintenance, repairing, and overhauling the aircraft engines and components. The apex court had then stayed the high court’s order to wind up the airline and told both the parties to settle the matter.

The Supreme Court on August 18 last year was informed by Spicejet and Swiss firm Credit Suisse AG that they had settled their financial dispute. The court had then allowed the airline to withdraw its appeal against the high court’s order to wind up the airline after it allegedly failed to repay its dues to the Swiss firm.