SpiceJet can seek Delhi HC's relief from ₹144cr deposit order
What's the story
The Supreme Court of India has allowed budget carrier SpiceJet to approach the Delhi High Court for relief from a ₹144.5 crore deposit order. The order was issued in a long-running arbitration dispute with Kalanithi Maran and KAL Airways. The decision comes after SpiceJet warned that it may shut down if forced to pay immediately without the proposed ₹5,000 crore government support package for airlines.
Court's observation
HC to consider SpiceJet's plea in light of new developments
A bench of Justice PS Narasimha and Justice Alok Aradhe asked the Delhi High Court to take into account subsequent developments, including the government's support measures and proposed relief package for airlines affected by the West Asia crisis. The bench said that the Delhi HC may consider SpiceJet's plea in light of "the policy decision relating to emergency credit line guarantees" and prevailing circumstances.
Payment plea
Rohatgi sought around 3 months' time for payment
During the hearing, senior advocate Mukul Rohatgi, representing SpiceJet, sought around three months' time for payment. He said this timeline coincided with the government support package announced on May 5 for the aviation sector. Rohatgi told the court that SpiceJet had little liquidity and nothing substantial to offer barring a one-acre commercial property in Gurugram's Udyog Vihar as security.
Financial status
Already paid ₹729cr out of total dues: SpiceJet
Rohatgi further said that if relief was not granted, the airline could close. He claimed that SpiceJet had already paid about ₹729 crore out of the total arbitral award amount of some ₹873 crore, including interest. This means nearly 83% of the dues have been discharged with only ₹144.5 crore still outstanding.
Opposition response
Opposing side says delay tactics being used by SpiceJet
Opposing the plea, senior advocate Jayant Mehta, representing KAL Airways and Maran, said that SpiceJet has repeatedly delayed its compliance despite several court orders and opportunities. Maran's side said the amount became payable in February 2023 and that the airline has consistently relied on financial distress arguments for years. It argued that this latest plea is another attempt to delay payment.
Ongoing dispute
Legal battle dates back to 2015
The legal battle goes back to 2015 when KAL Airways had transferred its stake in SpiceJet to promoter Ajay Singh during a period of financial stress at the airline. As part of the transaction, Maran infused around ₹679 crore into SpiceJet through convertible warrants and preference shares. Later, he alleged that those instruments were not issued by the new management, leading to arbitration proceedings.