SpiceJet moves review plea in Delhi HC over ₹144.5 crore deposit in Maran dispute
New Delhi: Budget carrier SpiceJet and its chairman and managing director Ajay Singh have filed a review petition in the Delhi high court seeking relief from an earlier order requiring the airline to deposit money ₹Kalanithi Maran and KAL Airways Pvt. 144.5 crore in four weeks in the long-running arbitration dispute with. Ltd.
Justice Subramonium Prasad, who heard the matter on Tuesday, postponed the hearing to April 13 after the parties requested time. However, the court observed orally that filing a review petition does not relieve SpiceJet from its obligation to comply with the order to deposit the amount by April 14.
“You have to comply with the order. The fact that you have filed this application is not a passport to disobey the order,” Justice Prasad said.
The review follows the high court’s March 18 order rejecting SpiceJet’s plea for change to January. The airline had offered to provide unencumbered real estate worth approx. ₹148 crore as security instead of depositing cash. However, the court did not accept this alternative and insisted on a cash deposit.
The review request is important as SpiceJet is facing a severe liquidity crunch due to flight disruptions linked to the West Asian war. Senior advocate Amit Sibal told the court that around 22,000 passengers and 7,000 employees were affected by the war.
According to previous submissions before the court, around 40% of the airline’s flights operate on Gulf routes, many of which are affected by the situation, leading to cancellations and financial stress.
The high court had directed SpiceJet to deposit money in January ₹144.5 crore, following which he approached the Supreme Court. The apex court refused to interfere with the high court’s direction. SpiceJet later approached the high court in early March, seeking to change the order by offering property instead of cash. The court rejected this request on March 18 and asked the airline to deposit the amount within four weeks. Following this, SpiceJet filed a review petition.
The high court also awarded costs ₹1 lakh to the airline for prolonging the case.
The rejection meant SpiceJet had to comply with the high court’s January 19 order within six weeks, prompting the airline to file multiple applications for a change of direction. The high court noted that SpiceJet had admitted that: ₹194.51 crore was due and payable as per the Supreme Court’s earlier directions. After setting ₹50 crore has already been deposited, ₹144.51 crore is still outstanding.
The dispute dates back to January 2015, when Kalanithi Maran and KAL Airways transferred their 58.46% stake in SpiceJet to Ajay Singh at a time when the airline was facing severe financial distress. As part of the transaction, Maran and KAL Airways ₹$679 billion was invested in the airline for the issuance of convertible warrants and preferred shares.
Maran then demanded a refund, claiming that these documents were not issued under the new management. The matter was referred to arbitration before a three-member bench comprising retired Supreme Court judges.
In July 2018, the court rejected Maran’s request. ₹1,323 crore compensation sought but SpiceJet ordered to refund ₹579 crore along with interest on warrants and preference shares.
Both parties challenged aspects of the decision before the Delhi High Court, triggering protracted enforcement proceedings, appeals and interim orders across courts.
SpiceJet claimed it had already paid ₹730 crore to Maran and KAL Airlines including principal amount ₹579 crore and around ₹150 crore towards interest.
The dispute remains a significant legal and financial burden for the airline, which has faced liquidity pressures, groundings of planes due to unpaid dues and bankruptcy petitions from lessors and creditors in recent years.
Emailed queries to Spicejet were not responded to by time of publication.
