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NEW DELHI: In a blow to cash-strapped SpiceJet, the Supreme Court on Friday directed it to pay the entire arbitration award of Rs 380 crore to the budget carrier’s former promoter Kalanithi Maran.
The order came in a seven-year-old share transfer dispute between Maran and Ajay Singh who had taken over the airline from him in 2015.
The airline earned the apex court’s ire for not paying as per earlier orders and observed that business must be carried out with “commercial morality” while ordering the amount be paid in one go.
The Delhi High Court had this June ordered SpiceJet to pay Rs 380 crore to Maran. And before that in February, the Supreme Court had asked it to pay Rs 75 crore against Maran’s claim of Rs 362.5 crore in interest dues within three months under a 2018 arbitration award. While dismissed SpiceJet’s pleas seeking an extension to pay Rs 75 crore to Maran and his KAL Airways, SC observed that filing applications is a delay tactic.
A bench comprising chief justice DY Chandrachud and justice PS Narasimha observed that a clear message needs to be sent across that the orders of Supreme Court must be followed, especially in commercial matters.
Maran had in February 2015 transferred his entire shareholding in SpiceJet to Ajay Singh who paid Rs 2 to take over the airline apart from liabilities of Rs 1,500 crore. As part of the deal, Maran and Kal Airways had paid Rs 679 crore for issuing warrants and preference shares. Two years later Maran approached the Delhi high court, alleging SpiceJet had not issued convertible warrants and preference shares or returned the money.
In a statement, SpiceJet — which has been defaulting on statutory dues like PF and TDS for many months — said: “The present order of Supreme Court is the reiteration of its earlier order passed in February 2023. The main petition challenging the award by both the parties are pending disposal by the Hon’ble Delhi High Court. The matter relates to payment of interest on principal amount of Rs 579 crore that has already been paid. SpiceJet is engaged in talks with Mr. Kalanithi Maran and his firm KAL Airways and remains committed to finding an amicable settlement. We remain confident of resolving this to the satisfaction of both sides through discussions.”
The order came in a seven-year-old share transfer dispute between Maran and Ajay Singh who had taken over the airline from him in 2015.
The airline earned the apex court’s ire for not paying as per earlier orders and observed that business must be carried out with “commercial morality” while ordering the amount be paid in one go.
The Delhi High Court had this June ordered SpiceJet to pay Rs 380 crore to Maran. And before that in February, the Supreme Court had asked it to pay Rs 75 crore against Maran’s claim of Rs 362.5 crore in interest dues within three months under a 2018 arbitration award. While dismissed SpiceJet’s pleas seeking an extension to pay Rs 75 crore to Maran and his KAL Airways, SC observed that filing applications is a delay tactic.
A bench comprising chief justice DY Chandrachud and justice PS Narasimha observed that a clear message needs to be sent across that the orders of Supreme Court must be followed, especially in commercial matters.
Maran had in February 2015 transferred his entire shareholding in SpiceJet to Ajay Singh who paid Rs 2 to take over the airline apart from liabilities of Rs 1,500 crore. As part of the deal, Maran and Kal Airways had paid Rs 679 crore for issuing warrants and preference shares. Two years later Maran approached the Delhi high court, alleging SpiceJet had not issued convertible warrants and preference shares or returned the money.
In a statement, SpiceJet — which has been defaulting on statutory dues like PF and TDS for many months — said: “The present order of Supreme Court is the reiteration of its earlier order passed in February 2023. The main petition challenging the award by both the parties are pending disposal by the Hon’ble Delhi High Court. The matter relates to payment of interest on principal amount of Rs 579 crore that has already been paid. SpiceJet is engaged in talks with Mr. Kalanithi Maran and his firm KAL Airways and remains committed to finding an amicable settlement. We remain confident of resolving this to the satisfaction of both sides through discussions.”
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