Pay Rs 579 crore in share transfer dispute, Supreme Court tells SpiceJet

NEW DELHI: The Supreme Court upheld a Delhi High Court order asking SpiceJet to deposit Rs 579 crore until a tribunal decides on the carrier’s dispute with previous owner Kalanithi Maran over financial claims made by him.

The clash relates to advances allegedly made in 2013 and 2014 by Maran and his KAL Airways to SpiceJet while he was still in control. He and KAL have claimed they were not issued convertible warrants or preference shares against this, nor was the amount utilised for paying statutory liabilities and demanded the return of the money. Maran and KAL together owned a 58.46% stake in SpiceJet that was acquired by current chairman Ajay Singh in 2015.

SpiceJet has said that all dues and liabilities have been paid.

ET reported on July 11 that Maran has sought more than Rs 2,000 crore in compensation from Singh and the airline.



SpiceJet allowed to deposit in tranches
They have been accused by the Sun Group promoter of causing losses by failing to honour contractual obligations.

SpiceJet told ET at the time that “the question of damages does not arise.” The claim has been filed before a tribunal comprising retired Supreme Court judges Arijit Pasayat, Hemant Laxman Gokhale and KSP Radhakrishnan that was set up at the end of last year.

In the interim, a Delhi High Court single-judge bench, acting on petitions filed by Maran and KAL Airways, directed SpiceJet to deposit Rs 579 crore — Rs 250 crore in cash and Rs 329 crore as bank guarantee — with the court. A division bench later confirmed the order. A two-judge bench comprising justices RF Nariman and Sankay Kishan Kaul dismissed SpiceJet’s appeal against the high court order on Friday. SpiceJet was represented by senior advocate Harish Salve and KAL Airways by Mukul Rohatgi.

The single-judge bench had ruled in Maran’s favour on July 29, 2016. This was confirmed by the division bench on July 3 this year. SpiceJet was given leeway by the top court to pay the money in tranches, which the high court had given it earlier.

Two petitions had been filed in the Delhi High Court — one by KAL Airways and another by Maran — under Section 9 of the Arbitration and Conciliation Act, 1996. They claimed to have paid the entire amount toward their contractual obligations under the binding share purchase agreement including SpiceJet’s dues to the statutory authorities.

They argued that SpiceJet and its new owner had received an amount of Rs 679 crore till February 23, 2015, but failed to keep their end of their bargain of paying statutory liabilities.

Consequently, Maran faced criminal proceedings for non-discharge of statutory liabilities as per complaints filed in March 2015. The high court said that compensation and interest for failing to issue the warrants over lack of regulatory approvals would be decided by the arbitral tribunal, but decided to secure the undisputed amount for now. This money will be held in an escrow account until a decision by the tribunal.