The Madras High Court has ordered the winding up of private carrier SpiceJet Limited and directed the official Liquidator attached to the High Court to take over its assets, in a plea filed by a Swiss company over unpaid dues.
The court was allowing a company petition from Credit Suisse AG, a stock corporation registered under the laws of Switzerland, which prayed for winding up of the Indian firm under the provisions of the Companies Act, 1956 and appoint the Official Liquidator of the High Court as the Liquidator with all powers under Section 448 of the Companies Act to take charge of SpiceJet’s assets, properties, stock in trade and books of accounts.
The ”respondent company (SpiceJet) has miserably failed to satisfy the three-pronged test suggested by the Supreme Court in Mathusudan Govardhandas & Co. v. Madhu Woollen Industries (P) Ltd., and hence had rendered itself liable to be wound up for its inability to pay its debts under Section 433 (e) of the Companies Act 1956,” Justice R Subramanian said in his order on Monday and directed the private carrier be wound up and the official liquidator take over its assets.
According to the petitioner, SpiceJet had availed of the services of SR Technics, Switzerland, for maintenance, repair and overhauling of aircraft engines, modules, components, assemblies and parts, which are mandatory for its operations. An agreement for the performance of such services for a period of 10 years was entered into between SpiceJet and SR Technics on November 24. 2011.
The terms of payments were also agreed upon. On August 24, 2012, a supplemental agreement was also entered into to change certain terms of the agreement. The amendments included an extension of time for payment of money due under various invoices and also a deferred payment scheme. Since there was a general increase in the cost, the 2012 supplemental agreement included adjustment of flight hour rates and provisions for escalation was also made.
Upon provision of the services under the agreement, SR Technics had raised invoices and SpiceJet had issued seven bills of exchange for the monies due under the invoices. It also acknowledged the debts from time to time by issuing certificates of acceptance in relation to the bills of exchange which would imply the respondent had not disputed the correctness of the claim made in the invoices. The petitioner, namely Credit Suisse AG, entered into a financing agreement in September 2012 with SR Technics and under a transaction agreement, the latter assigned all its present and future rights to receive payments under the agreement to the petitioner company.
The assignment included the Bills of exchange issued by SpiceJet pursuant to the 2011 agreement and the 2012 supplementary agreement. In view of the assignments made by SR Technics, the petitioner is entitled to receive payments of the monies due under the seven invoices from Spicejet, the petitioner company claimed. The petitioner has been making repeated requests to the airline to make payments under various invoices. Since it did not honour its commitment under the agreements with SR Technics and that SpiceJet is not in a position to meet its financial obligations, the petitioner issued a statutory notice. As there was no response, it preferred the present company petition before the High Court to wind up SpiceJet.
SpiceJet contended the alleged debts are not legally enforceable and as such there cannot be a winding-up order under Section 433 of the Companies Act. The petitioner is not a creditor of SpiceJet and in the absence of any contractual relationship of a debtor and creditor, a winding-up proceeding will not lie. The agreements between SpiceJet and SR Technics do not authorise assignment to the present petitioner. SR Technics had also issued a notice under Section 434 of the Companies Act in January 2015 and did not pursue the winding up, it argued and claimed that there was no liability to pay the very debt.
Rejecting the contentions, the judge said that a reading of certain Clauses in the agreement would show the parties to the contract are bound to fulfil all obligations which occurred prior to the termination and it will not prevent either party from claiming against breach of any obligations under the agreement including recovery of excess payments made by SpiceJet to SR Technics. The above clause would make it very clear that while it was open to SpiceJet to terminate the contract for the reason that SR Technics did not have a valid authorisation, the termination by itself would not relieve SpiceJet of the obligations that arose under the contract prior to such termination becoming effective. Admittedly, SpiceJet had not chosen to terminate the contract. It had continued to avail the services.
“Therefore, in my opinion, it cannot now turn around and say, there is a violation of the provisions of the Aircraft Act or the C.A.R. Rules made thereunder and therefore the liability ceased. I thus find that the respondent Company has miserably failed to satisfy the three-pronged test suggested by the Hon’ble Supreme Court in Mathusudan Govardhandas & Co. v. Madhu Woollen Industries (P) Ltd., supra, and hence had rendered itself liable to be wound up for its inability to pay its debts under Section 433 (e) of the Companies Act 1956. I am therefore of the opinion that this Company Petition should be allowed and the respondent Company directed to be wound up. The Official Liquidator is directed to take over the assets of the respondent Company,” the judge said.



Thirteen villagers and a soldier were killed at an Indo-Myanmar border district in Nagaland on Saturday as a counter-insurgency operation went horribly off-script. On Sunday, a civilian was killed in firing by the Assam Rifles when an angry mob stormed into their camp in Mon town and set a part of their camp on fire.
Dr Bhalchandra Mungekar, Former MP said, “I most strongly condemn the brutal and cold-blooded murder of 13 civilians in Nagaland making a blunder of treating them as Naxalites. The home minister, Mr Amit Shah must immediately sack the concerned officers.”
Sushmita Dev, West Bengal MP, TMC said, “What has happened in Nagaland is extremely worrying, the central forces have killed civilians. Firstly, it is a total intelligence failure. Secondly, after the incident, the local people are trying to say that they tried to cover up the whole thing. These are legitimate citizens of Nagaland, legitimate hamlets of Nagaland. This incident has disturbed the entire peace of Nagaland. In 1997, there was a peace accord signed, and there was a ceasefire. The local people of Nagaland are questioning this incident, they’re questioning the entire application of AFSPA, and the recent increase in the power of the BSF is also questioned.”
Merentoshi Jamir, spokesperson of Nationalist Democratic Progressive Party (NDPP), “The Para Commandos accidentally shot and killed 13 civilians on the fourth of December. And we have had an unfortunate loss of lives yesterday. This is something very unprecedented, especially from the unit like the para commandos making the mistake of killing unarmed civilians. The situation right now is calm. But I can’t say it is fully alright. Because there is a lot of tension around. We don’t know in the next few days what will happen. We are just observing as of now.”
The Supreme Court on Monday allowed Mumbai Police to carry on the investigation against former police commissioner Param Bir Singh but restrained it from filing charge sheets on the FIRs against him over the allegations of misconduct and corruption.
Over the controversial writing of his recent book, Sambhaji Brigade members threw black ink on senior journalist Girish Kuber. We believe that physical conflict must not be a part of any civilized battle of ideas which must find expression through persuasion, reasoned arguments, and decent debate. Afternoon Voice strongly condemns this attack.


