NCLT Delhi Rejects Former SpiceJet Pilot's Insolvency Plea Against Airline Over Salary Dues

The National Company Law Tribunal (NCLT) at Delhi has recently dismissed an insolvency plea filed by a former SpiceJet pilot over alleged unpaid salary dues, holding that the claim fell below the minimum threshold required for initiating insolvency proceedings and was also the subject of a pre-existing dispute.

A bench of Judicial Member Mahendra Khandelwal and Technical Member Anu Jagmohan Singh ruled.

“Therefore, the present Section 9 application is not admissible on the ground of lack of threshold under Section 4 IBC and also on existence of pre-existing dispute between the parties.”

The plea was filed by Capt. Devesh Bbyan, who joined SpiceJet as a trainee captain of a Q400 in April 2019 at an annual compensation of ₹77.4 lakh.

According to the petition, salary dues of about ₹1.14 crore remained unpaid for the period between April 2020 and August 2022 despite repeated demands. Including interest claimed at 24% per annum, he placed the total debt at about ₹1.7 crore.

After issuing a demand notice in October 2024, Bbyan approached the tribunal seeking insolvency proceedings against the airline.

SpiceJet contested the claim on multiple grounds. It pointed out that about ₹47.5 lakh of the claimed dues related to the period between April 2020 and March 2021, which fell within the period protected by the Covid-era suspension on insolvency filings. Excluding that amount, the alleged default came down to about ₹66 lakh.

The airline also contended that the original employment terms had been replaced by revised "transitionary terms" in 2020, which the pilot had accepted. It submitted that a full-and-final settlement amount of about ₹3.95 lakh had been communicated to him and that he had continued to work under the revised compensation structure without protest.

SpiceJet further maintained that the dispute centred on the calculation of salary dues and therefore could not be pursued through insolvency proceedings.

While examining the maintainability of the petition, the tribunal held that employment dues are capable of being treated as operational debt under the Insolvency and Bankruptcy Code.

The bench, however, found that the amount claimed for the period between April 2020 and March 2021 could not be considered while determining whether the threshold requirement for insolvency proceedings had been met.

Referring to the calculation sheet filed by Bbyan, the tribunal noted that the claim for that period amounted to about ₹47.5 lakh. Once that component was excluded, the claimed default reduced substantially.

The tribunal also declined to take into account the interest component of about ₹56.8 lakh. It observed that no agreement providing for payment of interest had been placed on record, and therefore the amount could not be included for calculating the threshold requirement.

On the issue of disputes between the parties, the bench examined the email correspondence placed on record.

The airline had informed Bbyan that about ₹3.95 lakh was payable towards his full-and-final settlement and sought execution of the necessary undertaking before releasing the amount. The emails, the tribunal observed, demonstrated a disagreement over the quantum of employment dues payable.

The bench held that such disputes existed before the demand notice was issued and could not be adjudicated in insolvency proceedings.

Concluding that the claim fell below the threshold requirement once the amount relating to the protected Covid period and the interest component were excluded and that a pre-existing dispute existed regarding the employment dues, the tribunal dismissed the petition.