Sahara accuses Jet Airways of breach of contract

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Mumbai: Sahara India Commercial Corporation Ltd (SICCL) on Thursday filed an application in the Bombay High Court alleging that Jet Airways had committed breach of contract in the Sahara Airlines takeover deal, and is liable to pay it (Sahara) Rs 2,000 crore instead of the renegotiated amount of Rs 1,450 crore agreed upon by them.

While Jet has sought four days to file a rejoinder to Sahara's application, the court has given the airline time to go through SICCL's application, and it will then hear the matter further. The court will give the date of the next hearing on Monday.

Naresh Goyal-led Jet bought Sahara India Airlines from the Sahara Group in April 2007 for Rs 1,450 crore after an arbitration award. Jet paid Rs 900 crore, and was to pay the remaining amount in four installments. According to Sahara's application, Jet had, however, defaulted and thus was liable to pay it Rs 2,000 crore.

After the court proceedings, Sahara's counsel told mediapersons that Jet was supposed to pay Rs 550 crore in four yearly installments without any deductions.

"This is something we are picking up from the consent terms signed at the time of the Jet-Sahara deal," he said, adding that Jet had wrongfully deducted taxes which it paid to the Income Tax department.

Giving reasons to SICCL filing an application in the court, Sahara's counsel said that Jet did not pay the installments fully and hence, the remaining installments get accelerated and the concession amount given at the time of settlement also becomes due as per the terms of the consent award.

Jet's lawyer Janak Dwarkadas, in the last hearing, had said that in March 2008, the income tax department demanded tax dues of Rs 107 crore from Sahara India Airlines (now called JetLite).

According to Jet, this amount was due from the Sahara Group as it pertained to the period before the acquisition.

So last March, while paying Sahara the installment of Rs 137 crore, Jet deducted Rs 37 crore against the I-T dues. This year too, Jet deducted Rs 50 crore on the same account. Dwarkadas said that Sahara has now taken a stand that it is not liable to pay the I-T dues.

In rough weather

• SICCL files an application in the Bombay High Court

•According to the application, Jet defaulted