 "SpiceJet CMD Ajay Singh")
Delhi High Court on Tuesday directed the low-cost carrier SpiceJet to make a payment of $450,000 to two engine lessors by January 3 to settle its outstanding dues.
“You can cancel your flights; I can’t help. People should know that the carrier can’t pay. You can take some other person for a ride for the time being,” Justice Rekha Palli told the airline during the hearing.
The airline was also asked to submit an affidavit outlining a plan for the return of the engines to two engine lessors, Team France 01 SAS and Sunbird France 02 SAS.
The lessors, represented by senior advocate Rajshekhar Rao and lawyer Anand Venkatramani, informed the court that the airline had not paid them $12.9 million in over two years. They also observed that the airline was using its three engines even after the termination of the lease.
When Justice Palli remarked that she was inclined to restrain SpiceJet from using the engines, the airline, represented by senior advocate Sandeep Sethi, informed the court that they were expecting an infusion of funds by mid-January and were ready to pay $250,000 by the end of December.
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In reply, the lessors’ counsel said that this amount did not even account for 10 per cent of what was owed to them and that the airline had chosen to retain the three engines when they had returned the rest.
“My indulgence has limits. Make a commitment today. Someone’s engines you are enjoying for years and you are not paying them. If you are unable to pay, return their engines,” Justice Palli said. The judge also noted that SpiceJet was not disputing the amount it owed to the lessors.
SpiceJet, during the hearing, offered to pay $50,000 by December 23, another $200,000 by December 29, and $400,000 by January 3. The court directed the airline to adhere to this payment schedule.
When the airline told the court that the amount payable should be reconsidered, the lessors said that the low-cost carrier had made similar statements in the past and that its claims were not bona fide. The lessors also mentioned that some of the engines they had received were damaged.
The court has warned the airline of the consequences if it does not pay up. The next date of hearing is January 4, a day after the said payment is to be made by the airline.
Currently, insolvency applications of four aircraft lessors, namely Aircastle (Ireland), Willis Lease Finance Corporation, Wilmington Trust SP Services, and Celestial Aviation, are being heard before the National Company Law Tribunal against SpiceJet over non-payment of their dues in 2023.
In the Supreme Court (SC), SpiceJet is in a battle with Credit Suisse over non-payment of dues. In September, the SC permitted SpiceJet to pay the Swiss firm $1 million per month for six months to settle its $3 million arrears.
