SC warns SpiceJet chief of 'drastic action' in Credit Suisse default case

New Delhi: Warning SpiceJet chairman Ajay Singh of "drastic action" including arrest, the Supreme Court on Monday gave one more opportunity for him to pay $500,000 as part of its monthly instalments to Swiss investment bank Credit Suisse by September 15 and an additional $1 million towards the defaulted amount.

While SpiceJet said there is an outstanding arrear of $4 million, Credit Suisse claimed the amount stood at $4.5 million as of now.

A bench comprising justices Vikram Nath and Ahsanuddin Amanullah said "drastic steps" will be taken towards Singh if he failed to comply with its order and that he might end up in "Tihar jail" on the next date of hearing on September 22.

"We have to move to the next drastic step. We are not worried if you shut down. Enough of this dilly-dally business... you will have to abide by the consent terms... It is too much," the bench observed.

Singh, who was personally present in the court on Monday, has been asked to be present at every hearing. The court also asked Singh to file a response to Credit Suisse's contempt petition and indicate a way forward to ensure full settlement and repayment of timely instalments.

On August 14, the SC had issued a contempt notice to Singh and the airline's company secretary Chandan Sand over "a wilful and intentional disobedience" of the court's August 18, 2022 order and failure to pay dues of several million dollars as per a settlement arrived at between the two sides in the $24-million dispute last year.

The Swiss firm had filed a winding up case against the airline for failing to honour some invoices raised for over $24 million towards payment of servicing the aircraft engines and components in 2013.

"SpiceJet acknowledges the legal process and is committed to complying with all court directives and obligations in the Credit Suisse case and will make the payment of $1.5 million as per the court directive. Till date, SpiceJet has already paid a total of $8 million to Credit Suisse," a spokesperson for the carrier said late in the evening on Monday.

The Madras High Court had in January last year ordered the winding up of SpiceJet and directed its official liquidator to take over the airline's assets. However, the SC, on SpiceJet's appeal, put the HC order on hold and asked the airline to settle the dispute with Credit Suisse.

Meanwhile, the Delhi High Court on Monday gave the low-cost airline and Singh time till Tuesday to pay the remaining money toward a ₹100 crore arbitral award to its former promoter Kalanithi Maran. Singh's lawyer told the court that the airline had paid Maran ₹62.5 crore and was carrying a cheque for another ₹37.5 crore in Maran's name.

The HC had on August 24 directed Singh to pay ₹100 crore to Maran by September 10 as bona fide and warned that a failure could lead to attaching of Spicejet's profits.

"SpiceJet Ltd. has made a payment of ₹77.5 crore to Kalanithi Maran and will complete the payment of ₹100 crores tomorrow by paying ₹22.5 Crore tomorrow as per the directions of the Delhi High Court," the spokesperson said in the statement.