NCLT Dismisses WLFC’s Insolvency Petition Against SpiceJet

Case Name:

Willis Lease Finance Corporation (Operational Creditor) vs. SpiceJet Limited (Corporate Debtor)

Key Takeaways:

1. NCLT held that a written response from the corporate debtor is not necessary for deciding the preliminary issue of maintainability of the petition under Section 9 of the IBC.
2. The application filed by WLFC for initiating CIRP against SpiceJet was dismissed due to the absence of a contractual relationship between the parties.
3. The NCLT observed that the servicer of aircraft lessors, WLFC, does not have the standing to file insolvency proceedings against SpiceJet in the absence of privity of contract.

Case Synopsis:

The National Company Law Tribunal (NCLT) has made a decision regarding the maintainability of a petition filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) by Willis Lease Finance Corporation (WLFC) against SpiceJet Limited, the corporate debtor.

The NCLT observed that the servicer of aircraft lessors, WLFC, does not have the standing to file insolvency proceedings against SpiceJet in the absence of a privity of contract. The NCLT also noted that the written response from the corporate debtor is not necessary for deciding the preliminary issue of maintainability of the petition under Section 9 of the IBC.

Here are the key points from the NCLT’s decision:

The Adjudicating Authority, comprising Rahul Bhatnagar, Member (Technical) and Mahendra Khandelwal, Member (Judicial), dismissed the application filed by WLFC under section 9 of the IBC for initiating Corporate Insolvency Resolution Process (CIRP) against SpiceJet Limited.

The NCLT held that the present application lacks merit, is not maintainable, and therefore stands dismissed without costs.

It was argued by the corporate debtor that no goods or services have been provided by WLFC to SpiceJet, and there is no contractual relationship between the parties. The dispute arises out of lease agreements executed by SpiceJet with different lessors, and it was pointed out that an operational debt is a claim in respect of the provision of goods or services based on a contract duly entered between the corporate debtor and the operational creditor.

In summary, the NCLT’s decision indicates that the application filed by WLFC for initiating CIRP against SpiceJet was dismissed on the grounds of lacking merit and maintainability due to the absence of a contractual relationship between the parties.

FAQ:

Q1: What was the basis for the dismissal of the insolvency petition?

A1: The dismissal was based on the absence of a contractual relationship between the parties, leading to a lack of merit and maintainability of the petition.

Q2: Why did the NCLT hold that a written response from the corporate debtor is not necessary for deciding the preliminary issue of maintainability of the petition?

A2: The NCLT’s decision indicates that a written response from the corporate debtor was not deemed necessary for deciding the preliminary issue of maintainability of the petition under Section 9 of the IBC.

Q3: What was the argument put forth by the corporate debtor in response to the insolvency petition?

A3: The corporate debtor argued that no goods or services had been provided by WLFC to SpiceJet, and there was no contractual relationship between the parties. The dispute arose out of lease agreements executed by SpiceJet with different lessors.