The National Company Law Tribunal (NCLT) on Wednesday allowed aircraft lessor Aviator ML 29641 Limited to withdraw its insolvency petition against SpiceJet but imposed costs of ₹15 lakh on the parties for settling the dispute at a belated stage.
A special coram of Judicial Member Mahendra Khandelwal and Technical Member Anu Jagmohan Singh directed Aviator ML and SpiceJet to pay ₹7.5 lakh each to the Prime Minister’s National Relief Fund within 7 days.
The withdrawal order will take effect only after proof of payment is produced before the NCLT Registry. If the parties fail to pay the costs, the Registry has been directed to place the matter before the coram for further orders.
The Tribunal also de-reserved its orders in 7 other insolvency petitions against SpiceJet and directed that they be placed before the regular coram for consideration.
Aviator ML had moved the NCLT under Section 9 of the Insolvency and Bankruptcy Code (IBC) in 2024 over an alleged default of ₹58.64 crore. The matter had been extensively argued and was listed for pronouncement on August 17 along with 7 other petitions against the airline.
However, on the day of pronouncement, the Tribunal was informed that SpiceJet and Aviator ML had executed a settlement agreement overnight. SpiceJet was stated to have admitted the debt and made an initial payment of $500,000.
The pronouncement was consequently deferred to Wednesday to enable Aviator ML to file a withdrawal application.
During Wednesday’s hearing, the parties sought to have the settlement recorded and secure liberty to revive the petition if its terms were breached. The Tribunal categorically refused, saying,
“This is a Tribunal for insolvency and resolution, not for settlement. We are not going to take cognisance of any settlement. That is between the two parties. We have nothing to do with it.”
The NCLT said that it would permit only an unconditional withdrawal of the petition. It declined to record either the terms of the settlement or any liberty to revive the insolvency proceedings.
Senior Advocates Ramji Srinivasan and Krishnendu Datta, appearing for Aviator ML and SpiceJet respectively, urged the Tribunal to at least record the fact that a settlement had been executed. Datta also sought limited protection concerning the parties’ rights under the agreement.
The Bench remained unmoved.
“Enough is enough in this matter. We have to take a call.”
The Tribunal noted that the petition had not yet been admitted. The proceedings, therefore, remained in personam and had not become proceedings in rem. It consequently permitted the lessor to withdraw the petition under Rule 8 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016.
It nevertheless expressed serious reservations about the parties’ conduct, particularly because several petitions against the same corporate debtor had been heard together over 2 years.
“These matters have been going on for two years. You cannot just choose parties. We are not happy with this conduct.”
The Tribunal also questioned the decision to settle with only one creditor when several other cases had been reserved for orders. It said that its proposed decisions in the other 7 cases were linked to the order that was to be pronounced in Aviator ML’s petition. Since that petition had now been withdrawn and no ruling on merits could be delivered, it was not feasible to pronounce detailed orders in the remaining matters.
It also noted that one member of the special coram was demitting office on Wednesday. The 7 petitions were consequently de-reserved and directed to be placed before the appropriate coram.
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