NCLT Imposes ₹15 Lakh Costs on SpiceJet and Aviator ML for Last-Minute Settlement

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

Lawyers advising clients on debt repayment or insolvency proceedings should note that the National Company Law Tribunal (NCLT) has imposed significant costs on parties engaging in last-minute settlements, highlighting the importance of timely resolution and potential compliance exposures.

Source: Original reporting via Bar and Bench