In a significant setback for SpiceJet and its promoter Ajay Singh, the Delhi High Court on Monday dismissed their pleas seeking a review of an earlier order to deposit ₹144 crore. The court, presided over by Justice Subramonium Prasad, also imposed a cost of ₹50,000 on the airline and Singh for the filing of the review petitions.
The ruling comes as part of a high-stakes legal battle between the budget carrier and media mogul Kalanithi Maran and his firm, Kal Airways, involving a decade-old ownership transfer and warrant issuance dispute.
The legal conflict dates back to February 2015, when Ajay Singh took back control of SpiceJet from Kalanithi Maran during a period of severe financial crisis for the airline. As part of the transfer, Maran and Kal Airways handed over their entire 58.46 per cent stake (amounting to 35.04 crore equity shares) to Singh for a nominal sum of just ₹2.
The current litigation stems from the alleged non-issuance of warrants and preference shares in favor of Maran following this transfer. This led to arbitration, resulting in an award that directed SpiceJet and Singh to refund ₹579 crore plus interest to Maran. While a division bench recently set aside a single judge’s order upholding the arbitral award and remanded the matter for fresh consideration, the requirement to secure the liability remained.
On January 19, the court had directed SpiceJet and Ajay Singh to deposit ₹144 crore within six weeks against an admitted liability of ₹194 crore. Although the court granted a four-week extension on March 18, Singh and the airline filed review petitions to reconsider this direction.
Seeking relief, SpiceJet cited “financial distress” exacerbated by external factors, including the ongoing war in West Asia. In lieu of the cash deposit, the airline offered a commercial property in Gurugram as security and informed the court that the Central Government was considering providing some assistance to the carrier.
However, these arguments were vehemently opposed by Kal Airways and Maran. They contended that the issues regarding the airline’s financial distress had already been thoroughly considered and rejected by the Supreme Court of India in earlier proceedings.
Pronouncing the verdict on Monday, Justice Subramonium Prasad found no merit in the review petitions. “Dismissed with cost of ₹50,000,” the judge stated, effectively upholding the requirement for the cash deposit.
The dismissal reinforces the court’s earlier stance on the necessity of the deposit, despite the airline’s attempts to substitute the cash requirement with physical assets. The matter now moves forward under the shadow of this financial obligation as the underlying dispute continues to be litigated.
