Mumbai: Debt-laden carrier SpiceJet stumped the insolvency court on Monday when it said it had paid $500,000 to one of the eight lessors, prompting the bench to question why the airline had not paid dues to the rest.
The National Company Law Tribunal’s (NCLT) special bench came down heavily on the airline for making the disclosure on the judgment day, saying the court’s time had been “wasted”. In an oral order, it asked Spicejet to settle its dues with other creditors within two days. The bench will now pass an order on Wednesday.
The bench of Justice Mahendra Khandelwal and technical member Anu Jagmohan Singh said, “This kind of thing is very wrong, you know. It’s a mockery of the entire system.” It asked SpiceJet why it had waited until the last moment to inform the court about the settlement.
It said that if SpiceJet wanted to settle, it should have informed the court in advance rather than waiting until the day the order was to be pronounced. The bench also pointed out that the matter had been pending since 2024 and that it had repeatedly asked SpiceJet whether there was any possibility of a settlement.
“That’s very wrong. I mean, we asked. We had said many times, Settle it. Settle it. But nothing is happening,” the court said.
The counsel appearing for Aviator ML 29641 Ltd, one of the operational creditors that had filed an insolvency petition against the airline, confirmed that Spicejet had admitted the debts and made the initial payment of $500,000.
“It is made clear that we do not appreciate the conduct of the parties for coming out of the settlement at this stage when the judgement is to be pronounced,” said the bench.
“Precious judicial time has been wasted in the arguments by both sides,” the bench said.
Meanwhile, counsels representing other creditors opposed Spicejet’s request to defer the remaining matters, arguing that the settlement with one creditor should not hold up the seven other petitions. “…this settlement coming in at the 18th hour, so to speak, should have any bearing on the other matters … pass an order at least in our matters,” said a counsel.
Another counsel described Spicejet’s move as “buy one get eight free”, saying that the airline could not settle one creditor and stall the orders for the entire batch.
An email query sent to Spicejet asking why the settlement was done with one creditor and whether there are plans to settle the matter with other creditors in due time had not been answered till press time.
Mounting woes
The petitions were filed in 2024 by eight creditors under Section 9 of the Insolvency and Bankruptcy Code (IBC), which allows an operational creditor to initiate insolvency proceedings against a company over a payment default.
SpiceJet has been grappling with huge financial losses and cash strain. For the first nine months, till 31 December, it reported a net loss of ₹1138.15 crore. Losses widened over the ₹266.8 crore it reported in the year-ago period. Its revenue from operations stood at ₹3271,5 crore for the period ending 31 December, down 14% over the year-ago-period.
The airline’s market share fell to 1.9% in June from 3.9 in the beginning of the year.
It is yet to declare its FY26 annual results and January-March quarter (Q4) earnings.
Spicejet shares have plunged 61% year-to-date, underperforming the benchmark Nifty 50, which fell 7.22% over the same period.
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