The Delhi High Court has directed domestic budget carrier SpiceJet to pay Rs 380 Crore to Kalanithi Maran, the former promoter of the airline and the founder of media giant Sun Group.
The order dated May 29, which Moneycontrol has access to, stated that SpiceJet is yet to pay Rs 75 crore to Kalanithi Maran, as per the directions of the Supreme Court dated February 13, 2023. The Supreme Court had directed the low-cost airline to make the payment within three months, but it failed to comply with the same. The apex court had also said: "If SpiceJet defaults, the award shall become executable in its entirety."
Kal Airways Pvt Ltd, an entity owned by Kalanithi Maran, filed an application against SpiceJet alleging that the airline had neither filed an affidavit of the assets as per the High Court's November 2020 order nor made the payment as per the SC order.
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According to the applicant, since the airline has not paid Rs 75 crore as yet, the interest liability, which was Rs 362.49 crore in February, has now risen to Rs 380 crore.
After hearing the arguments of the Kal Counsel, the Delhi High Court concluded that since SpiceJet had failed to pay the Rs 75 crore, there is no other alternative except to call upon the company to deposit the entire outstanding amount qua interest. The court further directed SpiceJet to file an affidavit of its assets within four weeks.
In February, the Supreme Court had directed the airline to invoke a bank guarantee of Rs 270 crore to pay Kalanithi Maran towards the dues from the arbitral award of Rs 572 crore. It had also directed SpiceJet to pay Rs 75 crore to Marans’ claims of Rs 362 crore in interest dues.
The direction was passed as SpiceJet informed the court that it had paid Rs 308 crore in cash against the pending amount of Rs 579 crore and had given a bank guarantee of Rs 270 crore to cover the rest of the amount.
The court had allowed Spicejet to approach the Delhi High Court and argue for a lower interest.
Notably, in an interesting turn of events, SpiceJet's lawyer have said that the Marans are free to reverse the transaction and take the airline back.
The dispute between the two entities dates back to 2015 when Maran and his firm KAL Airways transferred 58.46 percent of the shares held by them to the present Chairman of SpiceJet, Ajay Singh. Singh, who was the co-founder of the airline, had taken on the airline’s liabilities valued at Rs 1,500 crore.
Through this share transfer agreement, Maran was to be issued warrants and preference shares; he had paid Rs 679 crore towards the same.
In 2017, Maran moved the Delhi High Court saying that he was neither issued the preference shares as agreed upon, nor was the money paid by him refunded. The high court referred the case for arbitration.
The arbitration tribunal, in July 2018, awarded a refund to Maran to the tune of Rs 579 crore plus interest but rejected his claim for Rs 1,323 crore in damages. When Maran challenged this arbitration award before the high court, the court favoured Maran and directed SpiceJet to deposit Rs 243 crore towards the interest amount.
This order of the high court was stayed by the Supreme Court shortly thereafter and came up before the top court now with Maran seeking vacation of the stay.
Meanwhile, the airline has been recently struggling to raise and survive in the last few years. It is estimated that SpiceJet will need to raise around $ 250 million to pull the airline back from its present abyss of aircraft being grounded due to safety concerns, lessors seeking deregistration, and dues to vendors including lessors climbing to over Rs 2,000 crore.
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