Madras High Court has dismissed SpiceJet's appeal against a single-judge bench order for its winding up due to non-payment of $24 million to SR Technics- a maintenance and repair company.
The winding-up process allows the liquidator to sell off stocks, pay off the creditors, and distribute the assets to partners and shareholders.
Rejecting the appeal, a division bench of Justice Paresh Upadhyay and Justice Sathi Kumar Sukumara Kurup suspended the order till January 28 to enable the airline to move a further appeal before the Supreme Court.
An airline spokesperson refused to comment on the topic, but a person aware of the matter said that the company will appeal against the order in the Supreme Court.
“The judgement goes against the basic precedent that you cannot wind up a company if it has unpaid debt. Beside SpiceJet’s other contentions have not been considered,” the source said.
The high court on December 6 ordered the winding up of the airline on a petition filed by Credit Suisse-to whom SR Technics had given the right to collect all payments. The court also directed an official liquidator to take over the assets of the airline. The order was subsequently stayed for three weeks following a plea by the airline and on the condition that it deposits $5 million with the court within two weeks.
SpiceJet appealed against the order saying that the company after entering into an agreement with the SR Technicsfor a period of 10 years in 2011, midway, it discovered that the aircraft maintenance company did not have a valid authorisation from the Director General of Civil Aviation between January 1, 2009 and May 18, 2015.
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