Delhi HC asks SpiceJet's Ajay Singh to be present at hearing on non-compliance charges

SpiceJet did not file an affidavit of assets and liabilites as per a court order.

Justice Yogesh Khanna of the Delhi High Court on July 24 directed SpiceJet Managing Director Ajay Singh to be present in person at the next hearing in a case of non-compliance of its 2020 order asking for an affidavit of the company's assets.

Monday's directive was passed on an application filed by Sun Group Chairman Kalanithi Maran, alleging that the low-cost airline did not file an affidavit of assets and liabilites as per the court order. Maran had appealed to execute the arbitral award against SpiceJet. Senior advocate Maninder Singh represented Maran in the case.

Singh argued that Order 21 of the Civil Procedure Code 1908 mandates that a person not filing as affidavit of assets and liabilities as per the court order should be detained in a civil prison.

Appearing for SpiceJet, senior advocate Sandeep Sethi said the case was listed for a hearing on September 5 and they could be permitted to explain their stand on that day.

The court, however, noted that it should order the presence of the person in-charge of the case and issued notice in Maran's application seeking civil arrest. The case will now come up for hearing on September 5 when Ajay Singh is expected to be present in the court.

Maninder Singh was assisted by Nandini Gore, senior partner at law firm Karanjawala and Co.

Maran Vs SpiceJet

In February 2023, the Supreme Court had disposed of long-standing legal battle between Maran and SpiceJet, directing that the airline's Rs 270-crore bank guarantee be encashed and asking it to pay Rs 75 crore towards interest within three months.

Maran moved the Delhi High Court in May, stating that SpiceJet did not comply with the order of the Supreme Court. The high court then directed SpiceJet to pay the entire interest amount of Rs 380 crore to Maran, despite SpiceJet saying that it had moved a petition seeking an extension of the three-month period.

The present order of the Supreme Court is the reiteration of its earlier order passed in February 2023. The main petition challenging the award by both the parties are pending disposal by the Delhi High Court.

"The matter relates to payment of interest on a principal amount of Rs 579 crore that has already been paid. SpiceJet is engaged in talks with Kalanithi Maran and his firm KAL Airways and remains committed to finding an amicable settlement. We remain confident of resolving this to the satisfaction of both sides through discussions," a SpiceJet spokesperson said.

In February 2015, Maran and KAL Airways, his investment vehicle, transferred their 58.46 percent in SpiceJet to Ajay Singh, the current Chairman and Managing Director (CMD). Singh, also a co-founder of the budget carrier, 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 Ajay 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. SpiceJet was permitted to furnish a bank guarantee for Rs 329 crore and make a cash deposit of the remaining sum of Rs 250 crore.

Maran moved the Delhi High Court to enforce the arbitral award. The HC, in September 2020, ruled in favour of Maran and directed SpiceJet to deposit Rs 243 crore. However, the apex court stayed the order in November 2020.