SpiceJet insolvency plea maintainable, engine lessor WLFC tells NCLT

Engine lessor Willis Lease Finance Corporation (WLFC) on Tuesday stated before the National Company Law Tribunal (NCLT) that the demand notice issued to SpiceJet could not be questioned and its insolvency petition against the airline was maintainable, according to a report by The Economic Times (ET).

WLFC's submission came in response to Spicejet's challenge to the maintainability of WLFC's petition to initiate insolvency proceedings against the airline. The senior counsel representing WLFC argued that a fresh demand notice, as demanded by the SpiceJet counsel, was unnecessary since the earlier notice had specifics of the 107 invoices on which SpiceJet defaulted and had no new additions to the list.

 

The NCLT enquired whether a change in invoices warranted a fresh demand notice to be issued.

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The WLFC counsel replied that the demand notice could not be questioned, saying that the new petition did not bring any new facts to light. He also contended that the language of the last order, which allowed the engine lessor to withdraw its earlier petition, granted the petitioner an implicit direction to file a fresh petition.

WLFC withdrew the earlier petition as nearly a third of the invoices fell during the Covid period. The Centre had granted immunity to corporate debtors against default under Section 10A of the Insolvency and Bankruptcy Code, 2016 during the Covid period.

The counsel for SpiceJet argued that the NCLT had given the creditor the liberty to withdraw but not file a fresh petition. Also, WLFC could not file a new application based on an earlier demand notice, he added. 

SpiceJet's position has been that WLFC was not mandated to file a petition as it was a service provider for four operational creditors and not the operational creditor (OC).