NCLT Fines SpiceJet Over Last-Minute Insolvency Settlement

The National Company Law Tribunal (NCLT) fined SpiceJet and aircraft lessor Aviator ML 29641 Ltd a combined 15 lakh rupees for disclosing a settlement on the day a judgment was to be pronounced. The special bench, consisting of Justice Mahendra Khandelwal and technical member Anu Jagmohan Singh, ordered each party to pay 7.5 lakh rupees to the Prime Minister’s National Relief Fund, describing the timing as a "fraud played with the bench" and a "mockery of the entire system."

SpiceJet admitted to a debt of 58.64 crore rupees and made an initial payment of 500,000 dollars to Aviator ML. While the NCLT permitted the lessor to withdraw its insolvency petition, the tribunal refused to record the settlement terms or allow the petition to be revived in the event of a breach, insisting on an unconditional withdrawal.

The last-minute agreement disrupted the adjudication of seven other insolvency petitions against the airline. The NCLT de-reserved those orders and referred them to a regular bench for fresh consideration, noting that one member of the special coram was demitting office. This development follows a period of severe financial strain for SpiceJet, which reported a net loss of 1,138.15 crore rupees for the nine months ending December 31 and has faced over 20 insolvency petitions since 2023.