SpiceJet vs Maran: Airline to deposit ₹144.5 crore in tranches

Budget carrier SpiceJet on Monday told the Delhi High Court that it will deposit the outstanding amount ₹Kalanithi Maran and KAL Airways Pvt. 144.5 crore in the long-running arbitration dispute with. Ltd. gradually.

After providing partial financial assistance under the Centre’s emergency loan program for airlines, the carrier said the money would be deposited ₹50 crore and rest in court record within 45 days ₹95 crore in 90 days.

The development marks a turnaround for SpiceJet in its legal battle after the airline had earlier claimed that it did not have the liquidity to fund instant cash and instead sought permission to give a commercial property in Gurugram as collateral.

SpiceJet’s senior lawyer Mukul Rohatgi informed the court that the airline had received partial financial assistance under the Centre’s emergency loan scheme to support airlines affected by operational disruptions arising from the recent West Asian conflict.

While some of the aid has already been received, the remaining support is expected shortly so that it will be possible for the airline to complete the balance payment within the proposed timeline before the court, he said.

The latest development comes after the Supreme Court’s July 19 order allowing SpiceJet to approach the Delhi High Court again for reconsideration of its plea in the light of subsequent developments, including the Centre’s financial support measures for the aviation sector.

The dispute between SpiceJet and Maran dates back to 2015, when KAL Airways transferred its 58.46% stake in the airline to promoter Ajay Singh during a period of severe financial stress. As part of the transaction, Maran passed around information ₹It generated $679 billion for the airline through convertible warrants and preferred shares.

Maran then claimed that the new management failed to issue these securities, which triggered the arbitration process.

In July 2018, an arbitration court awarded SpiceJet a refund ₹579 crore with interest. The dispute has since gone through multiple litigations before the Delhi High Court and the Supreme Court.

Earlier this year, the Delhi High Court noted: ₹194.51 crore remained in emergency as per his earlier instructions. After setting ₹50 crore already deposited, court orders SpiceJet and its promoter Ajay Singh to deposit the remaining money ₹144.5 crore with court record.

However, SpiceJet did not comply with the deposit instruction and subsequently approached both the Delhi High Court and the Supreme Court through multiple petitions seeking relief.

The airline argued that an immediate cash deposit would worsen its liquidity position and instead sought permission to give a commercial property in Gurugram as collateral.

While the Delhi High Court dismissed these pleas, the Supreme Court later allowed SpiceJet to approach the high court for reconsideration in the light of subsequent developments, including the Centre’s emergency credit support program for airlines affected by the West Asian crisis.

SpiceJet did not respond by press time to an email query sent by Mint seeking comments on the development.