Ajay Singh-controlled SpiceJet has moved the Supreme Court challenging a Delhi High Court order asking it to deposit about Rs 529 crore in a share transfer dispute with its former promoter and South Indian media baron Kalanithi Maran. The matter is likely to come up for hearing on July 24.
Spicejet told the SC that the HC’s order was “bad in law” as it imposed “an extremely harsh financial obligation which amounts to infliction of ‘civil death’ on the company.
The amounts which were purportedly brought into the Spicejet were “utilised strictly for the limited purposes of settling / paying of the liabilities” of the airline including its statutory dues. The impugned order has the effect of undoing all efforts of the new management and saddles the company with huge liabilities which will again put the company back into severe financial distress and possibly into liquidation and shut down of operations due to withdrawal of aircraft leased by various owners and lessors, it said.
“Pertinently the liabilities of the petitioner company were over Rs 2,200 crore which was substantially higher than the amounts purportedly brought in by Maran and KAL Airways and it is an admitted position that these amounts were in fact utilised for the purpose for which they have brought in.
“It is with great effort, perseverance and skill that the company under its new management has been able to revive itself and come out from the severe financial strain that it was facing under the management of Maran and others,” the appeal stated.
The High Court earlier this month had directed the budget airline to pay Rs 250 crore as a cash deposit on or before August 31 in a share transfer dispute with its previous owner and South Indian media baron Kalanithi Maran.
It had also directed the carrier to furnish a bank guarantee of Rs 229 crore with the court towards satisfaction of the disputed amount.
The single judge had earlier asked the airline to deposit Rs 579 crore within five months with the first one in August 2016 before its registry and also asked it to consider arbitration proceedings to resolve the dispute with the Sun Group chief and his KAL Airways over share transfer within a year.
Maran, who owns Chennai-based Sun TV Network, and KAL had moved the HC over a share transfer dispute with SpiceJet, demanding that 18 crore warrants redeemable as equity shares be transferred to them.
Maran and his airline company had alleged that despite giving Rs 579 crore to SpiceJet, the carrier had failed to issue them the warrants or allot tranche one and two of Convertible Redeemable Preference Shares and that the amount was not utilised for paying statutory dues due to which they were also facing prosecution.
Maran and KAL had transferred their entire 350.4 million equity shares in SpiceJet, amounting to a 58.46% stake in the airline, to its co-founder Ajay Singh in February 2015.
Under the deal, Maran and KAL were to receive the redeemable warrants in return for the `700 crore they spent on SpiceJet towards operating costs and debt payment. Maran had sought that the warrants be issued in terms of an application made to BSE on September 18, 2014 and which had been approved by company’s board on September 24, 2014.