The Delhi High Court has directed SpiceJet to deposit “forthwith” Rs 75 crore that has to be paid to media baron Kalanidhi Maran and his Kal Airways towards interest on an arbitral award of Rs 578 crore.
The high court said, admittedly, there is no modification of the February 13, 2023 order passed by the Supreme Court in the case, and hence it needs to be followed.
“Since the judgment debtor (SpiceJet) had failed to pay an amount of Rs 75 crores to decree holder (Maran and Kal Airways), hence in terms of para 15 (ii) of the order dated February 13, 2023 of the Supreme Court, there is no other alternative except to call upon the judgment debtors to deposit the entire outstanding amount qua interest forthwith, thus is so directed. Affidavit of assets be also filed within four weeks from today,” Justice Yogesh Khanna said in an order passed on May 29.
The apex court, in its February 13 order said “The appellant (SpiceJet) shall, within a period of three months, pay an amount of Rs 75 crores to the respondent (Maran and Kal Airways) towards the liability on account of interest pending the disposal of the petition “
On November 2, 2020, the high court had asked the airline to deposit around Rs 243 crore as interest in connection with the share transfer dispute with its former promoter, Maran, and Kal Airways.
On November 7, 2020, the top court had stayed the high court order.
On February 13 this year, the apex court said the bank guarantee of Rs 270 crore of SpiceJet must be encashed immediately and the money be paid to Maran and Kal Airways towards dues from the arbitral award.
It said it had directed SpiceJet to pay within three months Rs 75 crore to Maran and Kal Airways towards the interest component on the arbitral award.
However, on May 29, the high court was informed that SpiceJet has not paid the interest amount.
Maran’s counsel said the interest liability, which was Rs 362.49 crore, has since increased to Rs 380 crore and so the decree holder insists for compliance of the February 13 order of the apex court.
The SpiceJet’s lawyer, however, submitted they have already paid the principal amount of Rs 579.08 crore and now the payment with respect to only the interest is pending.
The lawyer said the company has already moved an application before the Supreme Court for extension of time by three months to the judgment debtor to make payment of Rs 75 crore to the decree holder.
The counsel said since the judgment debtor has filed an application before the Supreme Court for extension of time, it be not directed to deposit the balance amount.
Filing of such an application was disputed by the counsel for Maran who said this court has no power to extend the time limit as was granted by the apex court.
The high court agreed with the submission of Maran’s lawyer and said the explanation appears to be plausible as, admittedly, there has been no modification to the February order of the apex court which needs to be followed.
SpiceJet and its promoter Ajay Singh were asked to deposit around Rs 243 crore as interest payable on Rs 578 crore, which the high court had, in 2017, asked the airline to deposit under the 2018 arbitration award in the share-transfer dispute.
The high court had granted six weeks to SpiceJet to make the payment and the deadline for the same expired on October 14, 2020.
After this, Maran and his firm had moved the high court for attachment of the entire shareholding of Singh in Spicejet and taking over the management for non-payment of Rs 243 crore.
The top court had taken note of Spicejet’s appeal and passed the interim order, staying the high court order.
Maran and Kal Airways had moved the high court over the share-transfer dispute, with SpiceJet demanding that 18 crore warrants redeemable as equity shares be transferred to them.
The high court had directed SpiceJet and Singh to deposit Rs 578 crore in the high court’s registry.
SpiceJet was permitted to furnish a bank guarantee for Rs 329 crore and make a cash deposit of the remaining sum before the high court.
The apex court had, in July 2017, dismissed SpiceJet’s appeal against the high court order.
On July 20, 2018, the arbitral tribunal rejected Maran’s claim of damages of Rs 1,323 crore for not issuing the warrants to him and Kal Airways but had awarded him a refund of Rs 578 crore plus interest.
Maran, the owner of Sun TV Network, then moved the high court against the arbitration award.
The matter pertained to a dispute arising out of the non-issuance of warrants in favour of Maran after the transfer of ownership to Singh, the controlling shareholder of SpiceJet.
The dispute started after Singh took back control of SpiceJet in February 2015 amid the airline facing a financial crisis.
Maran and Kal Airways had transferred their entire Rs 35.04 crore equity shares in SpiceJet, amounting to a 58.46 per cent stake in the airline, to its co-founder Singh in February 2015 for just Rs 2.