SpiceJet legal dispute: Delhi High Court upholds Rs 144 crore deposit order in Maran case

The Delhi High Court on Monday rejected review pleas by SpiceJet and promoter Ajay Singh. The pleas challenged an earlier direction to deposit Rs 144 crore. The court also ordered a cost of Rs 50,000 against SpiceJet and Singh. Justice Subramonium Prasad asked them to take immediate steps to deposit Rs 144,51,69,887 with the registry.

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The deposit order linked to SpiceJet’s dispute with Kalanithi Maran and Kal Airways. On January 19, the court asked SpiceJet and Singh to deposit Rs 144 crore. The amount was against an admitted liability of Rs 194 crore. The direction followed an arbitration award. On March 18, the court extended the deadline by four weeks.

SpiceJet dispute: Court rejects review bid on Rs 144 crore deposit

SpiceJet and Singh sought a review of the March 18 direction on several grounds. They cited financial distress and the ongoing West Asia conflict. SpiceJet also offered a commercial property in Gurugram as security. SpiceJet told the court that the Centre was willing to offer some assistance to it.

In its decision, the court said recent hostilities could not help SpiceJet and Singh. The court noted the Supreme Court made the arbitration award executable in July 2023. It added that SpiceJet’s weak financial position had not changed since then. The court said financial distress was already weighed when the March 18 order was passed.

"This court is of the opinion that the review petitioners are now attempting to take advantage of an event that has taken place more than two years after the passing of the order by the apex court directing the arbitral award to become executable, which cannot be permitted in any manner whatsoever.\"

\"The review petitioners are, therefore, constantly disobeying the orders of the apex court,\" it stated.

The court also dealt with a request for more time to sell property. It said such time was granted earlier. The court added that the petitioners were misusing the leniency they received. It found no basis to revisit the earlier direction. It also said the case was now at the execution stage of the arbitral award.

\"This court fails to see any valid ground raised by the review petitioners which would warrant a review of the impugned order, especially when the present proceedings are now at the stage of execution of the arbitral award as directed by the apex court and now, no question of equity or hardship can arise, it said.\"

SpiceJet dispute: Costs ordered and payment destination set

\"This court is, therefore, inclined to dismiss the present review petitions with a cost of Rs 50,000, to be deposited by the review petitioners with the Armed Forces Battle Casualties Welfare Fund within four weeks from today, the court ordered.\"

Maran and Kal Airways opposed the review petitions during the hearing. They were represented by senior advocates Jayant Mehta and law firm Karanjawala. They argued that financial distress claims had already been examined. They said such issues were considered and rejected by the Supreme Court.

SpiceJet dispute: Background on Maran, Kal Airways and share transfer

The wider case concerns a disagreement over the non-issuance of warrants to Maran. The issue arose after SpiceJet’s ownership moved to Singh. The dispute began after Singh regained control in February 2015. This took place during a financial crisis at the airline.

In February 2015, Maran and Kal Airways transferred their entire 35.04 crore equity shares to Singh. The shares amounted to a 58.46-per cent stake in SpiceJet. The transfer took place for Rs 2. The ongoing litigation has followed the commercial fallout from that change in control.

Separately, in May 2024, a division bench of the high court set aside a related single-judge order. The single-judge bench had upheld an arbitral award directing SpiceJet and Singh to refund Rs 579 crore plus interest to Maran. Justices Yashwant Varma and Ravinder Dudeja allowed appeals by Singh and SpiceJet, and sent the matter back for fresh consideration.

With inputs from PTI