SpiceJet warns of ‘collapse’ in Delhi high court, seeks relief from ₹144.5 cr deposit in Maran dispute

SpiceJet tells Delhi high court it could ‘collapse’ if forced to cash out immediately ₹Kalanithi Maran and KAL Airways Pvt. 144.5 crore in its long-running dispute with. Ltd. cited disruptions caused by conflict in West Asia and rising aviation turbine fuel prices.

Speaking on behalf of the airline, senior advocate Mukul Rohatgi told the Justice Subramonium Prasad bench on Monday that SpiceJet’s operations and cash flows have been severely affected due to restrictions on flights, especially to the Gulf.

“All work has been stopped… I am the youngest three major airlines. If my accounts are seized other than deposits, the whole system will collapse; at least I will collapse,” Rohatgi told the court, seeking time to arrange funds.

After hearing the defenses, the court postponed the hearing to April 15.

SpiceJet had filed a review petition on April 7 seeking relief from the high court’s earlier order requiring the deposit. ₹144.5 crore by April 14. The airline also offered to provide one acre commercial property in Gurugram as collateral instead of making immediate cash payment.

Rohatgi stated that there is no mortgage on the property and its ownership belongs to the company and SpiceJet is ready to submit the title deeds to the court. He argued that the airline had taken steps to monetize the asset by appointing property consultancy CBRE, but such transactions could take several months and should not be forced into an immediate sale.

“We should not make an emergency sale that will give me 50 percent,” he said, calling for the court to give additional time to sell the asset at current value.

government package

Rohatgi also stated that it is more comprehensive. aviation industry He is under stress and stated that the government may step in with aid measures.

“I heard that the government is preparing a package that will give me a chance to get a loan. PSU banks “Concerning the sovereignty security of the state, the Government will ensure the security of the airlines,” he said.

In this context, the airline urged the court to postpone the deposit deadline and provide temporary protection, arguing that immediate enforcement could disrupt operations, affect employees and passengers, and worsen its financial situation.

The protracted legal battle between SpiceJet and Maran has gone through multiple rounds of litigation in forums. In January, the Delhi high court directed SpiceJet and its promoter Ajay Singh to deposit money. ₹After a total of 144.5 crores were recorded ₹As per earlier instructions, 194.51 crore was due. After setting ₹50 crore has already been deposited, the outstanding amount was: ₹144.51 crore.

SpiceJet challenged this decision in the Supreme Court, which refused to intervene on February 27 and imposed costs on the airline for prolonging the case. This effectively required the airline to comply with the high court’s decision.

Later, SpiceJet approached the high court in early March seeking a change in the deposit condition. He offered to give immovable property worth ₹148 crore as collateral instead of depositing cash. However, on March 18, the high court rejected this plea and reiterated its direction that the amount be deposited within four weeks.

Faced with a looming deadline, the airline filed a petition for review, alleging errors in the earlier order and pointing to subsequent circumstances, including the impact of the West Asia conflict on its business.

Origins of the dispute

The dispute dates back to January 2015, when Maran and KAL Airways transferred their 58.46% stake in SpiceJet to Ajay Singh during the airline’s acute financial distress. As part of the transaction, Maran and KAL Airways ₹It generated $679 billion for the airline through convertible warrants and preferred shares.

Maran then claimed that these documents were not issued by the new administration and sought refund, which led to arbitration proceedings before a three-member tribunal of retired Supreme Court judges. In July 2018, the court rejected Maran’s claim. ₹1,300 crore damage but ordered refund to SpiceJet ₹579 crore along with interest on warrants and preference shares.

Both parties challenged various aspects of the decision in the Delhi high court, triggering a series of enforcement proceedings, appeals and interim orders. SpiceJet claimed it had already paid ₹730 crore to Maran and KAL Airlines, including principal and interest.

However, disputes over remaining dues and interest calculations continued to keep the issue alive in the courts. The case remains a significant financial and legal burden for SpiceJet, which has faced liquidity pressures, groundings of aircraft due to unpaid dues and bankruptcy petitions from lessors and creditors in recent years.