The Delhi high court on Tuesday dismissed an application filed by Budget airline SpiceJet seeking an extension to deposit the first ₹50-crore instalment towards the ₹144.5 crore owed to Kalanithi Maran and KAL Airways Pvt. Ltd. in their long-running legal dispute and extend the timeline for depositing the subsequent tranche of ₹94.15 crore by 45 days.
A bench of justice Vinod Kumar noted that following high court’s March 18 order asking SpiceJet and its promoter to pay ₹144 crore, the airline on July 13 had undertaken to deposit ₹50 crore within 45 days, making August 27 the deadline for the first instalment and the remaining ₹95 crore within 90 days. However, even ₹50 crore had not been deposited. The bench said it could not grant repeated extensions.
“This could court have taken a lenient view in respect of the time limit of second installment, had the petitioner complied with their own undertaking to deposit ₹50 crore with the Registrar General in 45 days. Even this part of undertaking has not been complied with,” the bench said.
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The judge further rejected SpiceJet’s plea to submit a property title deed instead of depositing ₹144 crore.
“So far as submitting the original document of property in Gurgaon is concerned, such a request has already been rejected by this court by order dated March 18. Though the property is now unencumbered, this Court is more concerned with the petitioner’s own undertaking of depositing ₹50 crores within 45 days. Had the petitioner deposited ₹50 crores this Court could have entertained the plea of depositing the document of property in Gurgaon as security for permitting the amount of ₹94 crores. However, as the petitioner has not deposited ₹50 crores as per his undertaking, I am not inclined to accept the property as security. Application dismissed,” the court said.
A detailed copy of the verdict is awaited.
Kalanithi Maran and KAL Airways Pvt. Ltd was represented by senior advocate Jayant Mehta along with senior partner Nandini Gore and associate partner Sonia Nigam from Karanjawala and Co.
In its application, the airline contended that denying an extension without the release of the second tranche of ₹349 crore could have serious repercussions for its operations. SpiceJet in its application said it was still reeling from the impact of the West Asia crisis and warned that failure to grant additional time could bring its operations to a grinding halt.
“This will include the adverse impact on around 5169 employees working directly with the Applicant and around 5500 vendors that are working with the Applicants,” the petition said.
The dispute between Maran and SpiceJet dates back to 2015, when Ajay Singh took over SpiceJet from Maran and KAL Airways. In 2015, Maran transferred 58.46% of his stake in the airline to Singh, and the deal was supposed to provide redeemable warrants in return for the money he invested during his tenure as a promoter of the airline.
Although Maran was made liable to receive 18 crore warrants, which translated to a 26% shareholding in SpiceJet, he approached the Delhi high court because he had neither received his share of the money nor the convertible warrants or preference shares.
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In 2018, the arbitral tribunal directed SpiceJet to refund ₹270 crore to Maran and Kal Airways. Besides the refund payment, the tribunal also directed SpiceJet to pay 12% interest per annum on the amounts paid towards warrants and 18% per annum on the sums awarded to Maran if the money transfer is delayed.
Both Kalanithi Maran, KAL Airways Pvt Ltd and SpiceJet challenged aspects of the arbitral award before the Delhi High Court. On July 31, 2023, a single judge dismissed all petitions and upheld the award. SpiceJet appealed, and on May 17, 2024, a division bench set aside the single judge’s ruling and remanded the matter for fresh consideration.