The bench was hearing SpiceJet’s appeal against an order asking the airline to deposit around Rs 243 cr as interest in connection with a share transfer dispute with baron Kalanithi Maran and his firm Kal Airways.

A Spicejet aircraft on tarmac with staircase attached for boarding
Money Aviation Monday, February 14, 2022 - 17:03

Kal Airways and media baron Kalanithi Maran on Monday, February 14, told the Supreme Court that they were not agreeable to two proposals to settle their dispute with SpiceJet on payment of interest in connection with a share transfer issue as the low-cost airline owed them around Rs 920 crore in pursuance of an arbitral award. A bench comprising Chief Justice N V Ramana and Justices A S Bopanna and Hima Kohli, at the outset, inquired about the view of Kal Airways Pvt Ltd and Maran whether they were agreeable to the two proposals of SpiceJet to settle the dispute.

SpiceJet, in its first offer, proposed that it would pay Rs 300 crores towards a full and final settlement of the dispute or secondly, out of the Bank Guarantee of Rs 270 Crores deposited with the Delhi High Court, the low-cost airlines will give Rs 100 crores for now and an order will be passed by the apex court urging the high court to expeditiously decide the case related to the arbitral award.

"They (Kal Airways and Maran) have considered the offer made by my friend (Senior advocate Mukul Rohatgi on behalf of SpiceJet). But they have not found them acceptable," senior counsel Maninder Singh, who was assisted by, Karanjawala and Co, told the bench. After being told about the views on the proposals, the bench listed the case for hearing the arguments on March 2 which was accepted by SpiceJet, represented by Rohatgi.

Earlier on February 10, the bench had asked Singh to take instructions from Kal Airways and Maran on the proposals made by SpiceJet and had listed the matter on Monday.

Rohatgi had also said that SpiceJet, in pursuance of an arbitral award in favour of Kal Airways, has paid Rs 308 crore and submitted a bank guarantee of Rs 275 crore with the Delhi High Court.

The bench was hearing the appeal of SpiceJet against the November 2, 2020 order of the high court asking the airline to deposit around Rs 243 crore as interest in connection with a share transfer dispute with its former promoter and media baron Kalanithi Maran and his firm Kal Airways.

Prior to this, on November 7, 2020, the apex court had stayed the Delhi High Court order asking SpiceJet to deposit around Rs 243 crore as interest in connection with the share transfer dispute.

SpiceJet and its promoter Ajay Singh were asked to deposit around Rs 243 crore as interest payable on Rs 579 crore, which the high court had in 2017 asked the airline to deposit under the 2018 arbitration award in the share transfer dispute.

The high court had granted six weeks to SpiceJet Ltd to make the payment and the deadline for paying the money, as per the September 2 order, expired on October 14, 2020.

After this, Maran and his firm had moved the high court for attachment of the entire shareholding of Singh in Spicejet and taking over the management for non-payment of Rs 243 crore.

The top court had taken note of the appeal of Spicejet and had passed the interim order staying the high court order.

Maran and Kal Airways had moved the high court over a share transfer dispute with SpiceJet, demanding that 18 crore warrants redeemable as equity shares be transferred to them.

The high court on July 29, 2016, had asked both parties to settle the share transfer dispute under arbitration. It had directed SpiceJet and Singh to deposit Rs 579 crore in the high court's registry. 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 by the high court.

The apex court, in July 2017, had dismissed SpiceJet's appeal against the HC order. On July 20, 2018, the arbitral tribunal had rejected Maran's claim of damages of Rs 1,323 crore for not issuing warrants to him and Kal Airways but had awarded him a refund of Rs 579 crore plus interest. Maran, the owner of Sun TV Network, then moved to the high court against the arbitration award.

The matter pertained to a dispute arising out of non-issuance of warrants in favour of Maran after the transfer of ownership to Singh, the controlling shareholder of SpiceJet. The dispute started after Singh took back control of the airline in February 2015 amid a financial crisis.

Maran and his Kal Airways had transferred their entire 350.4 million equity shares in SpiceJet, amounting to a 58.46 per cent stake in the airline, to its co-founder Singh in February 2015 for just Rs 2.

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