Supreme Court on Monday directed SpiceJet to pay $1.5 million in a case related to unpaid dues to Credit Suisse by Sept. 15 and warned the budget airline of unspecified “drastic action” at the next hearing if it failed to do so.
A third of the amount is part of a monthly settlement plan SpiceJet had previously agreed with Credit Suisse, and the rest are unpaid dues to the bank which it has failed to pay as per a schedule agreed upon last year.
If SpiceJet fails to pay, the Supreme Court will take “drastic action” when the case will next be heard on Sept. 22, judge said, without giving details. The hearing was attended by SpiceJet chief and co-founder Ajay Singh.
The court order is the latest setback for cash-strapped SpiceJet which told an Indian court last month it was “struggling to stay afloat” after it was ordered to make a payment in a separate case against the airline’s former owner.
SpiceJet did not immediately respond to a request for comment, but the Supreme Court judge said the airline had asked for more time to file its response to the case.
The airline had previously said the Credit Suisse debt was an old one which predated the tenure of its current management.
Credit Suisse and SpiceJet have been engaged in a legal dispute since 2015 over Credit Suisse’s claim of unpaid dues of around $24 million, which led to the Madras High Court’s order that the airline be wound up in 2021.
In an appeal against the high court order, the top court suspended the winding-up proceedings, allowing both parties to discuss a settlement. In August 2022, both sides informed the top court that they had agreed to settle the dispute.
But subsequently, Credit Suisse in March approached the Supreme Court seeking to initiate contempt proceedings against SpiceJet and Singh over “a wilful and intentional disobedience” of court orders and failure to pay dues of $3.9 million as per a settlement between the two sides.
The court has directed Singh to respond to the contempt case within four weeks and be present at hearings.