Madras High Court dismisses appeal by SpiceJet against admission of winding up petition by Company Court

The Madras High Court on Tuesday dismissed an appeal by SpiceJet challenging the order of company court admitting a winding up petition and appointing an official liquidator [SpiceJet Ltd. v. Credit Suisse AG]..A Bench of Justices Paresh Upadhyay and Sathi Kumar Sukumara Kurup had heard the appeal at length and reserved orders on Monday..According to respondent Credit Suisse, Spicejet was indebted to it for more than $24 million. On receiving no response on sending a notice regarding the same, the creditor moved the company for winding up.The issue arose when the airlines availed an engine maintenance facility from SR Technics, whose payment it wished to defer. For this purpose, it sought the service of the respondent.The respondent made payments to SR Technics on behalf of the appellant. However, the non-payment of this amount to the respondent led to the winding up petition..The appellant submitted that there was a serious dispute as to any amount being payable to SR Technics, since they did not have a valid license from the Director General of Civil Aviation (DGCA) and therefore, could not have legally maintained aircraft. Consequently, the appellant claimed that no amount could be said to be payable.Further, it was their contention that the documents relied on by the respondent were not stamped and therefore, Indian courts would not take cognizance of the same.In light of these submissions, the appellant prayed that the order of the company court ordering admission of the winding up petition and appointing provisional liquidator be set aside..However, the High Court found no strength in the appellant’s submissions.Responding to the contention regarding stamping of documents, the Bench pointed out that at the time of admission of a winding up petition, the issue is not whether the document sought to be relied on is sufficiently stamped or stamped at all.The only point to be verified at that stage was whether the debt was bonafide disputed and whether the defence was substantial. Both the company court and the Bench answered in the negative finding that the defence could not be said to be bonafide..The Division Bench rejected outright the argument of the appellant that there was bonafide dispute regarding payment.“Record shows that the appellant Company blows hot and cold together to suit its convenience,” observed the Court while considering the contention that had the appellant known of SR Technics lack of DGCA clearance, it would not have availed their services..Accordingly, the Court found no reason to interfere with the order of the company court, except with regards to the time limit prescribed.With this, the Court extended the stay granted by the Company Court till 28 January and dismissed the appeals..Senior Advocate V Ramakrishnan assisted by advocates Ashok Menon, Varun K Chopra, Abhinav Sharma and Sathya Ganesh appeared for the appellant.The Respondent was represented by Advocates Rahul Balaji, Vishnu Mohan, Aditya Bhat, Rajendra Barot, Priyanka Shetty, Ayush Chaddha and K Janani Shankar..[Read Judgment]