13 September 2023, Mumbai: The Supreme Court has issued a stern warning to SpiceJet Chairman and Managing Director Ajay Singh in a contentious payment dispute with global investment bank Credit Suisse AG. The court has threatened to send Singh to Tihar jail for non-compliance with its orders related to outstanding payments.
The Court’s Ultimatum
The top court has instructed Singh to make a payment of USD 5,00,000 towards an installment owed to Credit Suisse, in addition to a defaulted amount of USD 1 million. The bench, consisting of Justices Vikram Nath and Ahsanuddin Amanullah, expressed its frustration with the ongoing delay in payment, cautioning Singh that it would take drastic measures if necessary. The court emphasized that it would not be deterred even if SpiceJet were to shut down.
A Stark Warning
In response to what it deemed “dilly-dally business,” the bench issued a stark warning to Singh, stating that he must adhere to the consent terms agreed upon. The court declared that it would not be concerned even if Singh did not comply with the orders, going so far as to say, “We are not bothered even if you die.” The matter has been scheduled for further hearing on September 22.
In a statement, SpiceJet acknowledged the legal process and its commitment to complying with all court directives and obligations in the Credit Suisse case. The airline stated that it would make the payment of USD 1.5 million as per the court’s directive. SpiceJet also pointed out that it had already paid a total of USD 8 million to Credit Suisse, emphasizing that this financial liability predates the current ownership.
Background of the Dispute
The dispute between SpiceJet and Credit Suisse stems from the airline’s use of SR Technics, Switzerland, for aircraft maintenance, repair, and overhaul services. An agreement was reached between SpiceJet and SR Technics in 2011, with agreed-upon payment terms. Credit Suisse was granted the right to receive payments from SpiceJet for these services. The Supreme Court had previously granted SpiceJet additional time to make payments to Credit Suisse based on consent terms.
Credit Suisse had filed a plea seeking contempt proceedings against Ajay Singh and SpiceJet, alleging willful disobedience of court orders and failure to pay dues according to the settlement terms. The court had noted that while over 6.5 million US dollars were due, only a little over 2 million US dollars had been deposited by SpiceJet.
Resolution and Withdrawal
SpiceJet and Credit Suisse had informed the Supreme Court in August 2022 about the resolution of their financial dispute, leading to the withdrawal of SpiceJet’s appeal against a Madras High Court order for its winding up due to alleged non-payment of dues to Credit Suisse. The court had allowed the withdrawal and directed both parties to adhere to the consent terms agreed upon.