In a relief for low-cost carrier SpiceJet, the Supreme Court on November 6 stayed an earlier Delhi High Court order asking the airline to submit Rs 243 crore to former promoter Kalanithi Maran, according to a CNBC-TV18 report.
The Apex Court has also sought a response from Maran and asked for a reply to be filed within four weeks.
The development comes after Maran had moved the Delhi High Court on October 22, seeking attachment of SpiceJet promoter Ajay Singh's shareholding after the airline failed to deposit Rs 243 crore in favour of the Sun Group Chairman.
The high court, in its September order had asked the low-cost airline to make the deposit within six weeks. The deadline expired on October 14. The amount is essentially an interest payout of the sum Maran and his KAL Airways won as a refund from an arbitration panel in 2018.
At the same time, SpiceJet had moved the Supreme Court against the order on payment.
Singh and his family hold 59.93 percent in SpiceJet as on June 30. He owned around 2 percent before Maran exited the airline. "If the shareholding is attached, Singh won't be allowed to dilute his stake in the company," a person closely following the legal case, had told Moneycontrol.
The case
The three-year-old case centres around the bitter share transfer dispute between the two sides.
In February 2015, Maran and KAL Airways, his investment vehicle, transferred their 58.46 percent in SpiceJet, to Singh, the current Chairman and Managing Director, for Rs 2 after the airline’s operations were upended by a severe cash shortage. Singh, a co-founder of SpiceJet, took on the airline’s liabilities of around Rs 1,500 crore.
As part of the agreement, Maran and KAL Airways said they paid SpiceJet Rs 679 crore for issuing warrants and preference shares. Maran launched litigation in the Delhi High Court in 2017 against Singh and SpiceJet after he said that neither the convertible warrants and preference shares were issued nor was the money returned.
In July 2018, an arbitration panel rejected Maran’s claim of damages of Rs 1,323 crore for not issuing warrants to him and KAL Airways but awarded him a refund of Rs 579 crore plus interest. SpiceJet was permitted to furnish a bank guarantee for Rs 329 crore and make a cash deposit for the remaining sum of Rs 250 crore.
Soon after Maran contested the ruling of the arbitration panel that had not only rejected his claim of damages but also regaining control of the airline. The Delhi High Court, in September, ruled in favour of Maran.
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