‘Mockery of the entire system’: NCLT questions SpiceJet’s last-minute ₹4.78 crore payment to one creditor, gives 2 days to clear others’ dues
The court pointed out that the case had been pending since 2024 and that it had repeatedly asked SpiceJet to explore a settlement.
- Aug 17, 2026,
- Updated Aug 17, 2026 6:51 PM IST
SpiceJet has been given two days to settle dues with its other creditors after the airline made a last-minute payment of ₹4.78 crore ($500,000) to one creditor, according to a report by The Mint.
The National Company Law Tribunal (NCLT) questioned why SpiceJet waited until the day of the order to disclose the settlement.
The NCLT bench said the payment to one creditor could not hold up the seven other insolvency cases against the airline. It will pass its order on Wednesday.
Court questions SpiceJet’s timing
The special NCLT bench of Justice Mahendra Khandelwal and technical member Anu Jagmohan Singh criticised SpiceJet for informing the court about the payment at the last moment.
“This kind of thing is very wrong, you know. It's a mockery of the entire system,” the bench said.
The court pointed out that the case had been pending since 2024 and that it had repeatedly asked SpiceJet to explore a settlement.
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“That's very wrong. I mean, we asked. We had said many times, Settle it. Settle it. But nothing is happening,” the court said.
The bench also said the late disclosure had wasted the court’s time.
“Precious judicial time has been wasted in the arguments by both sides," the bench said.
One creditor gets ₹4.78 crore
Aviator ML 29641 Ltd, one of the operational creditors that had filed an insolvency petition against SpiceJet, confirmed that the airline had admitted its debt and made an initial payment of ₹4.78 crore ($500,000).
The bench, however, made it clear that it was not happy with the settlement being brought up just as the judgment was about to be delivered.
"It is made clear that we do not appreciate the conduct of the parties for coming out of the settlement at this stage when the judgement is to be pronounced," said the bench.
Lawyers for the other creditors opposed any delay in their cases. They argued that SpiceJet’s settlement with one creditor should not affect the remaining seven petitions.
“...this settlement coming in at the 18th hour, so to speak, should have any bearing on the other matters … pass an order at least in our matters,” said a counsel.
Another lawyer described SpiceJet’s approach as “buy one get eight free”, arguing that the airline could not settle one case and use it to delay the others.
SpiceJet has not responded to an email seeking clarification on the settlement and whether it plans to clear dues owed to the other creditors.
SpiceJet’s financial troubles
The eight insolvency petitions were filed in 2024 under Section 9 of the Insolvency and Bankruptcy Code (IBC), which allows operational creditors to begin insolvency proceedings over payment defaults.
The latest court action comes as SpiceJet continues to face financial pressure. The airline reported a net loss of ₹1,138.15 crore for the first nine months ended 31 December, compared with a loss of ₹266.8 crore a year earlier.
Revenue from operations fell 14% to ₹3,271.5 crore during the period.
SpiceJet’s market share also dropped to 1.9% in June from 3.9% at the beginning of the year. The airline is yet to announce its FY26 annual results and January-March quarter (Q4) earnings.
Its shares have fallen 61% so far this year, compared with a 7.22% decline in the Nifty 50.
SpiceJet has been given two days to settle dues with its other creditors after the airline made a last-minute payment of ₹4.78 crore ($500,000) to one creditor, according to a report by The Mint.
The National Company Law Tribunal (NCLT) questioned why SpiceJet waited until the day of the order to disclose the settlement.
The NCLT bench said the payment to one creditor could not hold up the seven other insolvency cases against the airline. It will pass its order on Wednesday.
Court questions SpiceJet’s timing
The special NCLT bench of Justice Mahendra Khandelwal and technical member Anu Jagmohan Singh criticised SpiceJet for informing the court about the payment at the last moment.
“This kind of thing is very wrong, you know. It's a mockery of the entire system,” the bench said.
The court pointed out that the case had been pending since 2024 and that it had repeatedly asked SpiceJet to explore a settlement.
Don't Miss: India faces fertilizer squeeze as rising costs force govt to rethink urea policy
“That's very wrong. I mean, we asked. We had said many times, Settle it. Settle it. But nothing is happening,” the court said.
The bench also said the late disclosure had wasted the court’s time.
“Precious judicial time has been wasted in the arguments by both sides," the bench said.
One creditor gets ₹4.78 crore
Aviator ML 29641 Ltd, one of the operational creditors that had filed an insolvency petition against SpiceJet, confirmed that the airline had admitted its debt and made an initial payment of ₹4.78 crore ($500,000).
The bench, however, made it clear that it was not happy with the settlement being brought up just as the judgment was about to be delivered.
"It is made clear that we do not appreciate the conduct of the parties for coming out of the settlement at this stage when the judgement is to be pronounced," said the bench.
Lawyers for the other creditors opposed any delay in their cases. They argued that SpiceJet’s settlement with one creditor should not affect the remaining seven petitions.
“...this settlement coming in at the 18th hour, so to speak, should have any bearing on the other matters … pass an order at least in our matters,” said a counsel.
Another lawyer described SpiceJet’s approach as “buy one get eight free”, arguing that the airline could not settle one case and use it to delay the others.
SpiceJet has not responded to an email seeking clarification on the settlement and whether it plans to clear dues owed to the other creditors.
SpiceJet’s financial troubles
The eight insolvency petitions were filed in 2024 under Section 9 of the Insolvency and Bankruptcy Code (IBC), which allows operational creditors to begin insolvency proceedings over payment defaults.
The latest court action comes as SpiceJet continues to face financial pressure. The airline reported a net loss of ₹1,138.15 crore for the first nine months ended 31 December, compared with a loss of ₹266.8 crore a year earlier.
Revenue from operations fell 14% to ₹3,271.5 crore during the period.
SpiceJet’s market share also dropped to 1.9% in June from 3.9% at the beginning of the year. The airline is yet to announce its FY26 annual results and January-March quarter (Q4) earnings.
Its shares have fallen 61% so far this year, compared with a 7.22% decline in the Nifty 50.