Anushka Sharma-
Published On: December 07, 2021 at 11: 40 IST
On the grounds of the Airlines’ proven incapacity to repay its obligations, the Madras High Court has ordered that SpiceJet Limited be wound up and its assets be taken over by the official liquidator.
Justice R. Subramanian was hearing a business Petition filed by Credit Suisse AG, a Swiss stock corporation and a creditor, alleging that Respondent Airlines was unable to pay obligations owed to the former.
The Single Judge Bench invoked the three-pronged test framed by the Apex Court in Mathusudan Gordhandas & Co. v. Madhu Woollen Industries (P) Ltd., (1971) 3 SCC 632 to determine the admission of winding up when the existence of debt is proven against SpiceJet Limited in the petition filed under Sections 433(e) and (f) r/w Sections 434 and 439 of the Companies Act, 1956.
While agreeing with the submissions made by Advocate Rahul Balaji appearing for the stock corporation, Justice R Subramanian recorded on the question of enforceability of debts after referring to Mathusudan and Madras HC judgment in Michael Hart v. M/s. Ninestars Information Technologies Ltd. (2013)
“The three pronged test suggested by the Hon’ble Supreme Court which I have already extracted would show that the Company Court need not render a conc conclusive finding on the enforceability of the debt, while examining the issuance of notice of winding up or while examining the admission of a winding up petition.”
The contentious subject before the High Court were the seven invoices raised by SR Technics, the seven related Bills of Exchange for the amount due under invoicing, and the acknowledgement of indebtedness through issuing of certificates of acceptance by the Airlines.
Through a financial arrangement in 2012, the stock corporation Credit Suisse AG (Third Party) was allocated all rights to receive payments owed to SR Technics. The third party was also entitled to receive payments from SpiceJet under the seven invoices produced by SR Technics as part of the assignment.
SpiceJet refused to pay the money due under the invoices despite repeated demands, even after receiving a statutory notice under Sections 433 and 434 of the Companies Act, 1956. As a result, the third party preferred to file a corporate petition for winding up under Section 433 (e), citing the first party airlines’ incapacity to repay the debts.