SpiceJet dues: Maran moves Delhi HC against non-payment of Rs 243 crore by Ajay Singh

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October 23, 2020 8:00 AM

Kalanithi Maran and his company KAL Airways on Thursday moved the Delhi High Court seeking attachment of SpiceJet promoter Ajay Singh’s shareholding and taking over the management after the airline failed to deposit Rs 243 crore in favour of the Sun Group chairman.

The air bubble arrangement between two countries helps airlines to operate international flights, with certain restrictions, amidst the COVID-19 pandemic.

Kalanithi Maran and his company KAL Airways on Thursday moved the Delhi High Court seeking attachment of SpiceJet promoter Ajay Singh’s shareholding and taking over the management after the airline failed to deposit Rs 243 crore in favour of the Sun Group chairman.

In September, the high court had asked SpiceJet to make the deposit within six weeks and the deadline expired on October 14. The amount relates to interest payout of the sum Maran and his KAL Airways won as refund from an arbitration panel in 2018.

The high court has agreed to hear Maran, and has issued notice to SpiceJet on the plea seeking status quo of the shareholding. The HC has posted the matter for further hearing on November 4. Meanwhile, SpiceJet has gone ahead and moved the Supreme Court against the high court order on the payment. The apex court is likely to hear the matter next week.

Maran on Thursday told the HC that in view of changed circumstances due the failing financial condition of Spicejet, he had serious doubts about the the low-cost carrier remaining a going concern. Maran’s petition has also asked the court to appoint an administrator or officer to take over the airline’s management, with a direction to clear dues by liquidating the shares of Singh. The petition also asks for the attachment of Singh’s bank accounts, and movable and immovable properties, and that these should be sold to pay the due amount.

Singh and his family hold 59.93% in SpiceJet as on June 30. He owned around 2% before Maran exited the airline. The dispute between the two sides relates share transfer. In February 2015, Maran and KAL Airways had transferred their 58.46% in SpiceJet, to Singh for `2 after the airline’s operations had come to a halt due to liquidity crunch. Singh, who was a co-founder of SpiceJet, took on the airline’s liabilities of around Rs 1,500 crore.

As part of the agreement, Maran and KAL Airways said they paid SpiceJet Rs 679 crore for issuing warrants and preference shares. Maran launched litigation in the Delhi High Court in 2017 against Singh and SpiceJet after he said that neither the convertible warrants and preference shares were issued nor was the money returned.

In July 2018, an arbitration panel rejected Maran’s claim of damages of Rs 1,323 crore for not issuing warrants to him and KAL Airways, but awarded him a refund of Rs 579 crore plus interest. SpiceJet was permitted to furnish a bank guarantee for Rs 329 crore and make a cash deposit for the remaining sum of Rs 250 crore.

Maran contested the ruling of the arbitration panel that had rejected his claim of damages and the Delhi High Court, in September, ruled in his favour.

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