Fresh trouble for SpiceJet as 3 aircraft lessors, former pilot file insolvency pleas

SpiceJet is facing fresh round of troubles as three Ireland-based aircraft lessors and a former pilot have filed insolvency pleas in NCLT against the budget carrier, claiming defaults. Three lessors - NGF Alpha, NGF Genesis and NGF Charlie- have filed petitions under Section 9 of IBC, seeking initiation of insolvency proceedings against SpiceJet claiming dues totalling USD 12.68 million (about Rs 110 crore).

SpiceJet, during the proceedings of the National Company Law Tribunal, earlier this week, sought some time to resolve the matter as settlement talks were going on.

"Counsel on behalf of the Operational Creditor (SpiceJet) is present and sought time to seek instructions on the future course of action to be taken in the matter," NCLT said in an order.

The insolvency tribunal directed to list all three petitions on April 7, 2025, for the next hearing.

The lessors had earlier leased five Boeing 737 to SpiceJet. They had served legal notice to SpiceJet wherein they alleged theft of parts of the aircraft, including engines and using them in other planes.

Besides, regarding the plea filed by the pilot, the two-member NCLT bench asked whether claims by the pilot are barred under Section 10A of the Insolvency & Bankruptcy Code (IBC).

The NCLT said: "Counsel on behalf of the Operational Creditor is present and sought time to examine the issue specifically in respect of applicability of Section 10A in respect of certain claim amount and also to the limitation issue. In view of this, list the matter on April 15, 2025."

Section 10A mandates that no application for initiation of corporate insolvency resolution process (CIRP) can be filed against any debtor by any financial and operational creditor for any default arising on or after March 25, 2020, for a period of one year.

This was a special provision inserted by the government in IBC to help companies after economic activities had resumed post-lockdown in phases.

Debt-ridden SpiceJet is already facing several cases before the NCLT from lessors, vendors and other operational creditors, though no final order has been passed in any case.

SpiceJet, which has been flying for 19 years, is facing insolvency petitions from creditors, including Willis Lease, Aircastle Ireland Ltd, Wilmington and Celestial Aviation at NCLT and the appellate tribunal NCLAT.

In September 2024, SpiceJet raised Rs 3,000 crore through sale of shares to qualified institutional buyers, which it intended to use for settling liabilities of creditors, including aircraft and engine lessors, engineering vendors and financiers.