SpiceJet Ltd.

NCLT rejects Insolvency petition filed by Wilmington Trust against SpiceJet Ltd. | For the purposes of IBC, a clear distinction is required between Owner, Lessor, Assignee, Trustee, with respect to being recognized as Operational Creditor in terms of provision of IBC – Wilmington Trust SP Services (Dublin) Ltd. Vs. SpiceJet Ltd. – NCLT New Delhi Bench

In this case, an application is filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 by Wilmington Trust SP Services (Dublin) Ltd. (Operational Creditor) for initiation of CIRP against SpiceJet Ltd. (Corporate Debtor). In the present case, Section 9 Petition has been filed on the basis of alleged default of payment due as per Aircraft Lease Agreement signed by the Willington Trust SP Services (Dublin Limited) as a Trustee and not in its individual capacity.
Hon’ble NCLT New Delhi Bench holds that:
(i) In the instant case, neither the operational debt is owed to the instant applicant, nor it has been legally assigned or transferred to the instant applicant. Therefore, it is undisputedly concluded that the Applicant is not a ‘Operational Creditor’ in the instant case.
(ii) It appears that for the sake of convenience in dealing with day to day business operations with various authorities in India, on behalf of BOC Aviation, the DGCA has mentioned them as Lessor/Owner without clarifying that they are trustees.
(iii) Since the proceedings under the IBC are summary in nature, this Adjudicating Authority is not inclined to adjudicate upon the genuineness of the document. However, it is evident that the Amendment Agreement produced by the Operational Creditor is not signed by both the parties and the Amendment Agreement produced by the Corporate Debtor during the course of argument is signed by both the parties.

NCLT rejects Insolvency petition filed by Wilmington Trust against SpiceJet Ltd. | For the purposes of IBC, a clear distinction is required between Owner, Lessor, Assignee, Trustee, with respect to being recognized as Operational Creditor in terms of provision of IBC – Wilmington Trust SP Services (Dublin) Ltd. Vs. SpiceJet Ltd. – NCLT New Delhi Bench Read Post »

Erstwhile Demand Notice issue u/s 8 of IBC cannot be treated as a valid Demand Notice for filing fresh petition u/s 9 where earlier petition was dismissed as withdrawn and the date of default and amount are also different – Willis Lease Finance Corporation v. SpiceJet Ltd. – NCLT New Delhi Bench Court-V

NCLT New Delhi Bench Court-V held that
(i) On bare perusal of Section 5 (21) of IBC, it is clear that ‘Operational Debt’ is a claim in respect of provision of goods or services which should be based on a contract duly entered between the Corporate Debtor and the Operational Creditor. Moreover, it is settled law that an Operational Creditor is a person to whom an operational debt is owed.
(ii) Under definitions in Section 5(20) “operational creditor means a person to whom an operational debt is owed and includes any person to whom such debt has been legally assigned or transferred”.
(iii) Section 8 (1) of IBC provides that an Operational Creditor is required to deliver a demand notice for unpaid operational debt and the same is sine qua non for filing and maintaining petition under Section 9 of the IBC. However, in the instant case WLFC had issued a Demand Notice pursuant to which a petition was filed and it was “dismissed as withdrawn”. In the instant case, no fresh Demand Notice was issued by WLFC to SpiceJet, and WLFC in the present Petition is relying on its erstwhile Demand Notice and the demand notice cannot be treated as a valid Demand notice for the alleged debt amount.

Erstwhile Demand Notice issue u/s 8 of IBC cannot be treated as a valid Demand Notice for filing fresh petition u/s 9 where earlier petition was dismissed as withdrawn and the date of default and amount are also different – Willis Lease Finance Corporation v. SpiceJet Ltd. – NCLT New Delhi Bench Court-V Read Post »

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