SpiceJet gets relief as SC junks Kalanithi Maran's plea against order setting aside award in his favour

Set back for Kalanidhi Maran

Cash-strapped airline SpiceJet received a breather on July 26 when the Supreme Court dismissed a petition filed by media mogul Kalanidhi Maran after the Delhi High Court set aside its earlier order upholding the the arbitral award in his favour against the low-cost carrier.

A bench led by Chief Justice of India DY Chandrachud said the division bench of the high court was justified in sending the case back for reconsideration as the single judge "had not applied his mind at all". The CJI came down heavily on the single judge's order and said: "Merely filling 200 pages with the Supreme Court judgement is not enough, the judgment should also have reasoning."

CJI Chandrachud, who was visibly irked with the lack of reasoning in the single judge's order, said: "This is atrocious... Where has he (single judge) even applied his mind? We are in agreement with reasoning of the division bench sending it back to single judge for order again under Section 34." The apex court also directed that the case be placed before another judge for fresh consideration.

In May 2024, a division bench of the Delhi high court passed the order on a plea file by SpiceJet Chairman and Managing Director Ajay Singh and the airline against a single-judge order, which in July 2023 affirmed the award.

The court sent the case back to a single judge for fresh consideration as the order that was under challenge was not reasoned well.

SpiceJet and Singh had sought to set aside the portion of the award which directed them to refund Rs 270 crore to Kal Airways and Maran. They also sought a waiver of 12 percent interest on warrants and setting aside of the 18 percent interest granted in the award.

The casefile

In February 2015, Maran and KAL Airways, his investment vehicle, transferred their 58.46 percent stake in SpiceJet to Singh.  A co-founder of SpiceJet, Singh 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. However, Maran alleged that the warrants and preference shares were not allotted and initiated arbitration proceedings against SpiceJet and Singh.

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.