Delhi High Court Rejects SpiceJet's Request to Review Rs 144 Crore Payment Order in Dispute with Kalanithi Maran

Delhi High Court Dismisses SpiceJet's Plea to Review Rs 144 Crore Deposit Order

The Delhi High Court has dismissed the pleas moved by SpiceJet and its promoter Ajay Singh seeking a review of an earlier order asking the airline to deposit Rs 144 crore in connection with its legal dispute with media baron Kalanithi Maran and Kal Airways.

On Monday, Justice Subramonium Prasad imposed a cost of Rs 50,000 on the airline and Singh, and directed them to take immediate steps to deposit the amount of Rs 144,51,69,887 with the registry. This follows an earlier order on January 19, which directed SpiceJet and Singh to deposit Rs 144 crore with the registry within six weeks against an admitted liability of Rs 194 crore, pursuant to an arbitration award against them in their dispute with Maran. The time to make the deposit was extended by four weeks on March 18.

Singh and his budget airline had sought a reconsideration of the March 18 direction on several counts, including financial distress amid the ongoing West Asia conflict. SpiceJet instead offered a commercial property in Gurugram as security and informed the court that the Centre is willing to offer some assistance to it.

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The court stated that the hostilities that broke out in February-March could not be used to the advantage of SpiceJet and Singh when the Supreme Court made the arbitration award executable "way back" in July 2023. It also noted that the airline's "declining" financial health has not changed since then and the ground of "financial distress" was considered at the time of passing the March 18 direction.

| Comparison of Arbitration Award and Deposit Amount | | --- | --- | | Arbitration Award | Rs 194 crore | | Deposit Amount | Rs 144 crore | | Extension of Deposit Time | 4 weeks (from March 18) |

The court observed that the review petitioners are 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. It also stated that the petitioners are "only abusing the indulgence" given to them.

With respect to the submission that the petitioners should be given some more time to let them make an attempt to sell SpiceJet's property and deposit the sale proceeds, the court noted that such time was granted to them earlier. The court ordered that the review petitions be dismissed 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.

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The matter arises from a dispute regarding the non-issuance of warrants in favour of Maran after the transfer of SpiceJet's ownership to Singh, the controlling shareholder of the airline. The dispute started after Singh took back control of SpiceJet in February 2015 amid a financial crisis at the airline. Maran and Kal Airways had transferred their entire 35.04 crore equity shares, amounting to a 58.46-per cent stake, in SpiceJet to its co-founder, Singh, in February 2015 for just Rs 2.

In May 2024, a division bench of the high court set aside an order of a single-judge bench that had upheld an arbitral award asking SpiceJet and Singh to refund Rs 579 crore plus interest to Maran. A bench of Justices Yashwant Varma and Ravinder Dudeja allowed the appeals filed by Singh and SpiceJet challenging the July 31, 2023, order of the single-judge bench and remanded the matter back to the court concerned to consider the petitions afresh.