Mumbai The Supreme Court on Thursday directed SpiceJet Ltd to approach the Madras High Court (HC) to withdraw its $5 million bank guarantee it had submitted to the court in May.
SpiceJet had submitted the bank guarantee on the directions of the Madras HC, at which time the Supreme Court was hearing a winding up case against the company filed by Credit Suisse AG. Now the matter of closure is resolved. A bench headed by former Chief Justice NV Ramana took on record that a settlement has been reached between the two parties and the matter has been disposed of.
On May 25, the low-cost airline had informed the apex court that it has settled its litigation with Credit Suisse over the dues. The settlement was executed on 23 May, and the agreed terms were submitted to the Supreme Court.
The airline said the settlement involves advance of certain amount and payment of balance amount on a mutually agreed timeline, without sharing further details.
The matter started in November 2011 when the Ajay Singh-led airline signed a 10-year aircraft servicing and maintenance agreement with Swiss maintenance, repair and overhauling (MRO) service provider SR Technics.
The Swiss company issued the invoices, and the airline issued seven bills of exchange to cover the amount owed on the invoice. In September 2012, SR Technics entered into a finance agreement with Credit Suisse, assigning the lender all its current and future rights to receive payments under the agreement. However, after the airline failed to pay over $24 million, Credit Suisse filed a winding up petition against SpiceJet in the Madras High Court last year.
On 6 December 2021, a single-judge bench of the Madras HC allowed winding up proceedings against SpiceJet under section 433(e) of the Companies Act 1956, and directed the official liquidator to take over the airline’s assets. The airline challenged the order before the division bench.
The division bench upheld the single judge’s order. The airline then challenged the decision in the Supreme Court, which stayed the HC’s order to wind up the airline and gave the company three weeks to settle the matter. However, the final settlement took longer.
catch all corporate news And updates on Live Mint. download mint news app to receive daily market update & Live business News,