SpiceJet wants more time to pay ₹50cr to Kalanithi Maran
What's the story
SpiceJet, the cash-strapped budget airline, has sought more time from the Delhi High Court to pay its first installment of ₹50 crore. The amount is part of a larger ₹144.5 crore liability owed to Kalanithi Maran and KAL Airways Pvt Ltd. The request was made today by senior advocate Mukul Rohatgi, who represents SpiceJet in the case.
Financial struggles
First tranche of emergency credit received in June
Rohatgi informed the court that SpiceJet had received its first tranche of emergency credit support from the government in June.
However, he said, the airline had used the funds for its operations.
The airline was hoping for a second tranche of about ₹349 crore but has not yet received it.
Legal proceedings
Court to list matter on September 21
Responding to the request for more time, Justice Subramanian Prasad of the Delhi High Court said that the court would list the matter for September 21, to check SpiceJet's compliance with its order.
This is just another chapter in a long-running legal battle between SpiceJet and Maran over unpaid dues.
Dispute history
Dispute traces back to 2015
The dispute dates back to 2015 when Maran and KAL Airways sold their 58.46% stake in SpiceJet to promoter Ajay Singh amid severe financial stress at the airline.
As part of the deal, Maran had invested some ₹679 crore into SpiceJet through convertible warrants and preference shares.
However, he later alleged that the new management did not issue the securities, leading to arbitration proceedings.
Tribunal decision
Arbitral tribunal ruled in favor of Maran in July 2018
In July 2018, the arbitral tribunal ruled in favor of Maran, directing SpiceJet to refund ₹579 crore with interest.
The dispute then went through several rounds of litigation before the Delhi High Court and Supreme Court.
In February 2023, the Supreme Court ordered encashment of a ₹270 crore bank guarantee and directed SpiceJet to pay ₹75 crore toward interest.
Payment attempts
SpiceJet claims to have paid around ₹729cr toward award
SpiceJet has claimed to have paid around ₹729 crore toward the award, including interest.
Earlier this year, the Delhi High Court recorded an outstanding of ₹194.51 crore and directed SpiceJet and Singh to deposit ₹144.5 crore after adjusting ₹50 crore already deposited.
The airline's plea to substitute cash deposit with a Gurugram property was rejected, prompting it to approach the Supreme Court citing financial stress and the West Asia crisis.