SpiceJet moves SC against a deposit order of ₹144.5cr
What's the story
SpiceJet has challenged a Delhi High Court order in Supreme Court that asked the airline to deposit ₹144.5 crore in its ongoing legal battle with Kalanithi Maran and KAL Airways Pvt Ltd. The budget carrier filed the plea on May 7, after its review petition was dismissed by the court. The matter is yet to be assigned for hearing or listed before a bench.
Court ruling
Airline cited worsening liquidity position, rising ATF prices
The Delhi HC had on May 4 asked SpiceJet to comply with an earlier order and deposit ₹144.51 crore with the court registry. However, the airline argued that an immediate cash deposit would severely strain its finances and could lead to its collapse. It cited the West Asia conflict, suspension of certain flight operations, and rising aviation turbine fuel (ATF) prices as reasons for its worsening liquidity position.
Alternative proposal
SpiceJet proposed to furnish Gurugram property as security
Along with its plea, SpiceJet also proposed to furnish a Gurugram commercial property worth about ₹148 crore as security instead of making a cash deposit. The airline argued that the asset was unencumbered and would take time to monetize. However, the HC rejected these arguments and said that SpiceJet cannot use subsequent geopolitical developments as an excuse not to comply with court orders.
Dispute history
Dispute dates back to January 2015
The dispute dates back to January 2015 when Maran and KAL Airways had transferred their 58.46% stake in SpiceJet to Ajay Singh amid a financial crisis at the airline. As part of the deal, Maran invested roughly ₹679 crore into SpiceJet through convertible warrants and preference shares. Later, he alleged that these were not issued by the new management, leading to arbitration proceedings.
Ruling
Several litigation rounds
In July 2018, an arbitral tribunal rejected Maran's damages claim but directed SpiceJet to refund ₹579 crore with interest. The matter has since gone through several litigation rounds before Delhi HC and Supreme Court. In February 2023, the SC ordered encashment of a ₹270 crore bank guarantee and asked SpiceJet to pay ₹75 crore toward interest. This January, the HC said ₹194.51 crore remained outstanding. After adjusting ₹50 crore already deposited, the court ordered SpiceJet to deposit remaining ₹144.5 crore.