The court was hearing the 2020 appeal of SpiceJet against a high court order asking the airline to deposit around Rs 243 crore as interest in connection with a share transfer dispute with Kalanithi Maran and Kal Airways.

A Spicejet aircraft in the air
Money Court Friday, February 11, 2022 - 11:53

Low cost airline SpiceJet on Thursday, February 10, told the Supreme Court that in pursuance of an arbitral award in favour of Kal Airways, it has paid Rs 308 crore and submitted a bank guarantee of Rs 275 crore with the Delhi High Court. A bench comprising Chief Justice N V Ramana and justices A S Bopanna and Hima Kohli was hearing the 2020 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.

The top court heard submissions of senior advocate Mukul Rohatgi, appearing for SpiceJet, and Maninder Singh, representing Kal Airways, and asked them to seek instruction on the money aspect. "List on February 14, 2022 to enable the learned senior counsel for the petitioners to seek instructions," the bench noted in the order.

At the outset, the counsel for Kal Airways said the high court had asked SpiceJet to pay the decretal amount and against which Spicejet had deposited Rs 270 crores as bank guarantee, and now, there is a winding up order passed by the Madras High Court. He sought a direction to SpiceJet to pay Rs 242 crores, otherwise Kal Airways will have to run from pillar to post.

Rohatgi, assisted by Karanjawala and Co., said the other matter relating to the winding up case filed by a Swiss firm has already been settled. "We have already paid Rs 308 crores and Rs 275 crores bank guarantee is already deposited before the Delhi High Court," he said. Singh said that the arbitral award would become a piece of paper if the entire amount is not paid to his client (Kal Airways). The bench asked both the parties to seek instruction on the money aspect so that the case can be settled finally.

SpiceJet, in a statement, said that it has offered to pay Rs 600 crore in cash in the share transfer case with its former promoter Kalanithi Maran and his firm Kal Airways for a full and final settlement of all disputes "Out of the principal amount of Rs 578 crore awarded in arbitration, SpiceJet has already paid Rs 308 crore in cash and deposited a bank guarantee of Rs.270 crore, the statement said further.

Earlier 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 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% stake in the airline, to its co-founder Singh in February 2015 for just Rs 2.

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