The National Company Law Tribunal (NCLT) has issued a showcause notice to budget carrier Spicejet in an insolvency petition filed by Ramco Systems. The IT services provider has filed the plea against the carrier for non-payment of operational debt amounting to Rs 4.87 crore. The case has come up at a time when reports about SpiceJet’s chairman Ajay Singh taking over media house NDTV have started doing rounds.
R Varadharajan, member (judicial) of NCLT, New Delhi, in his order dated August 30, has asked SpiceJet to showcause as to why the petition should not be admitted under the Insolvency and Bankruptcy Code, 2016.
Ramco Systems had entered into a software licence agreement dated May 13, 2013 with SpiceJet allowing it to use Ramco Aviation M&E Software in its existing and future fleets of aircraft. SpiceJet has an total dues of of Rs 4,87,87,200, which includes principal outstanding of Rs 2,99,32,640 and interest calculated at the rate of 18 per cent till March 31, 2017 amounting to Rs 1,88,54,560.
Ramco issued a notice for the release of outstanding payment on November 10, 2016. The company also sent a legal notice to SpiceJet on January 13, 2017 when there was no response for the carrier despite reminders. The IT services provider further sent a notice demanding compliance under the Insolvency and Bankruptcy Code on April 24, 2017.
Ramco Systems in its petition before NCLT, sought order to wind up SpiceJet and appoint an Interim Insolvency Resolution Professional as official liquidator to take charge of assets, properties, stock-in-trade, business, book of accounts etc with all the powers under the Insolvency and Bankruptcy Code, 2016.
The court had given SpiceJet one week’s time from September 11 to file a reply and has listed the case for further hearing on September 28. SpiceJet is the third-largest airline in India in terms of market share. The airline has been generating profits for the past two financial years after registering net losses of Rs 1,003.24 crore in 2013-14. For f2016-17, the airline posted a net profit of Rs 430 crore as compared to Rs 407 crore reported in the previous year and the company’s operating revenues stood at Rs 6,191.3 crore.
Chennai-headquartered Ramco Systems has 22 offices spread across India, the US, Canada, Europe, Australia, West Asia, South Africa and APAC. The company is an enterprise software player providing cloud and mobile-based solutions in the area of HCM and Global Payroll, ERP and M&E MRO for Aviation.
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