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NCLT has right to file a plea against Spicejet, ET Infra

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Willis Lease Finance Corporation Friday told the National Company Law Tribunal that it was well within its rights to file an insolvency petition against Spicejet.

WLFC said that its service agreement with four operational creditors, read along with the lease agreements and emails from Spicejet acknowledging the debt to WLFC, established its right to file a petition against the airline for failure to pay lease rent and usage charges on 11 engines.

WLFC claimed that Article 1, Section 1.01 of the service agreement allowed the servicer to collect lease rent and other charges on behalf of engine lessors and “take reasonable efforts to enforce rights and remedies of the lessor under the lease in the event of loan payment by the relevant due date.”

Senior counsel for WLFC further pointed out that the lessor “has the absolute right to transfer to any person all of the rights to any person under the General Terms Agreement”.

The tribunal has been demanding that WLFC satisfy how it could file an insolvency petition against Spicejet under Section 9 of the Insolvency and Bankruptcy Code, 2016, when it was not a lessor and when there were four different operational creditors involved in the case.

At the last hearing, the senior counsel for Spicejet questioned the maintainability of the plea filed by WLFC, pointing out that the law did not permit four operational creditors to file a single Section 9 petition and that WLFC could not, in any case, file a plea as it was just a service provider.

The tribunal has listed the matter for September 11 for WLFC to conclude its arguments on maintainability.

Spicejet is facing four other petitions from aircraft lessors to initiate corporate insolvency proceedings, three of which are listed for hearing on August 17 and another on August 18.

  • Published On Aug 11, 2023 at 06:07 PM IST

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