Delhi High Court rejects SpiceJet’s plea for more time to pay ₹144.5 crore (Img : Pinterest)
New Delhi: The Delhi High Court has refused to grant SpiceJet additional time to deposit Rs 144.5 crore owed to Kalanithi Maran and KAL Airways Pvt. Ltd., dealing a setback to the airline in its long-running financial and legal dispute. The court also rejected the airline’s request to submit a property title deed instead of depositing the money.
A bench led by Justice Vinod Kumar dismissed SpiceJet’s application seeking an extension for depositing the first instalment of Rs 50 crore and delaying the subsequent payment of around Rs 94.15 crore by 45 days.
The court noted that SpiceJet had undertaken on July 13 to deposit Rs 50 crore within 45 days, setting August 27 as the deadline. The remaining amount was to be paid within 90 days. However, the airline failed to meet even the first payment commitment.
The bench observed that it could have considered a more lenient approach towards the second instalment if SpiceJet had honoured its undertaking to deposit the initial Rs 50 crore. Since the airline had not fulfilled that commitment, the court declined to grant further relief. A detailed copy of the verdict is awaited.
In its application, SpiceJet argued that denying additional time particularly without the release of a second tranche of Rs 349 crore could seriously affect its operations. The airline also referred to the continuing impact of the West Asia crisis and warned that its operations could come to a standstill without financial relief.
The company highlighted the potential consequences for its workforce and business partners stating that employees and vendors could be affected. Despite these concerns, the court did not accept the request for an extension.
The dispute dates back to 2015 when Ajay Singh took control of SpiceJet from Maran and KAL Airways. As part of the transaction, Maran transferred his 58.46% stake in the airline to Singh. The deal involved the issuance of redeemable warrants in return for the investment made during Maran’s tenure as promoter.
Maran was entitled to 18 crore warrants, representing approximately 26% of SpiceJet’s shareholding. However, he approached the Delhi High Court after alleging that he had not received the promised money, convertible warrants or preference shares.
In 2018, an arbitral tribunal directed SpiceJet to refund Rs 270 crore to Maran and KAL Airways along with applicable interest. The award provided for 12% annual interest on amounts paid towards warrants and 18% annual interest on awarded sums in the event of delayed payment.
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Both sides challenged aspects of the award. On July 31, 2023, a single-judge bench upheld the arbitral award and dismissed the petitions. SpiceJet subsequently appealed and on May 17, 2024 , a division bench set aside the single judge’s ruling and sent the matter back for fresh consideration.
The latest order adds another development to the prolonged dispute over payments and contractual obligations between the airline and its former promoter.
