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HC expresses dismay over Spicejet missing deadline on dues owed to AAI

Forum Gandhi Mumbai | Updated on April 15, 2021

AAI’s counsels say airline’s intention to pay doubtful

While expressing dismay over SpiceJet flouting the deadlines for payment of dues to the Airports Authority of India (AAI), the Delhi Court directed the airline to make the payment.

Meanwhile, in a fresh application, the AAI has raised doubts over the Gurugram-based airline’s intention to clear the dues at all.

The matter is being heard before Justice Prathiba M Singh of the Delhi High Court. “SpiceJet must file a reply and repay the dues it has agreed to reconcile on,” said Justice Singh posting the matter for May 6.

BusinessLine had reported that SpiceJet had written a letter to AAI stating that it undertakes to deposit the TDS amount in two installments with the first of ₹5.30 crore by April 7 and the second of ₹13.28 crore by June 30.

“It is submitted that the benefit of payment of TDS by the Petitioner to the tune of ₹18.58 crore can be credited to the account of the Petitioner only on payment of TDS and providing adequate proof of the same to the Respondent,” the application said.

AAI’s counsels said that this itself show that “despite accepting the decision taken by the Board of the Respondent on January 19, the Petitioner has hopelessly failed to abide by the said decision and has itself accepted that it is in default of the Board decision dated January 19.”

Financial crunch

The counsels appearing on behalf of SpiceJet had argued that the airline was going through a financial crunch as air travel has been hit by the pandemic.

However, AAI said that the intention of SpiceJet to clear the outstanding dues is “doubtful in view of the fact that on one hand the Petitioner as per its press release dated March 13 announced introduction of 66 new Domestic Flights. It further announced vide press release dated March 31 that it had signed a MoU with A venue Capital Group for financing, acquisition and sale and lease-back of upto 50 Aircraft.”

AAI said that it is pertinent to mention that as per media reports, the Petitioner has been shortlisted for the bid to buy out Air India.

“These press releases and media reports show that the Petitioner has sufficient means, but is deliberately not clearing the outstanding dues of the AAI,” maintained the regulator.

As per the AAI Credit Policy and the decision of the Board of the Respondent, the Petitioner was bound to bring the outstanding dues to 7 5 per cent of the security deposit. The total outstanding dues as on March 31 is ₹134.05 crore whereas 75 per cent of the security deposit comes to ₹115 .22 crore, hence SpiceJet was bound to pay and/or enhance the security deposit value by ₹25.10 crores as on March 31.

Published on April 15, 2021

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