New Delhi: The Supreme Court on Tuesday, May 19, asked SpiceJet to approach the Delhi High Court with its plea seeking extension of time to deposit Rs 144 crore in connection with its legal dispute with media baron Kalanithi Maran and Kal Airways.
A bench of Justices PS Narasimha and Alok Aradhe took note of submissions made by senior advocate Mukul Rohatgi, appearing for Spicejet, that the ongoing West Asia crisis has impacted the airline’s operations and finances.
Referring to a recent government’s bailout programme for airlines, which has an outlay of Rs 5,000 crore, Rohatgi sought three months time to deposit the amount.
The top court, however, refused to grant time and asked the budget airline to move the high court.
“What happened before the West Asia crisis? Something which has happened on May 5 (Bailout announcement) cannot become a ground for extension of time,” the bench remarked.
During the hearing, Rohatgi said, “Private interest must yield to public interest. I have thousands of employees.”
The counsel appearing for Kal Airways vehemently opposed the extension of time, saying a review cannot be allowed in guise of an appeal.
The high court had on May 4 dismissed pleas moved by SpiceJet and its promoter Ajay Singh seeking a review of an earlier order asking the airline to deposit Rs 144 crore in connection with its legal dispute with Kalanithi Maran and Kal Airways.
It also imposed a cost of Rs 50,000 on the airline and Singh, and directed them to take immediate steps to deposit the amount of Rs 144,51,69,887 with the registry.
On January 19, the court directed SpiceJet and Singh to deposit Rs 144 crore with the registry within six weeks against an admitted liability of Rs 194 crore, pursuant to an arbitration award against them in their dispute with Maran. On March 18, the time to make the deposit was extended by four weeks.
Singh and his budget airline had sought a reconsideration of the March 18 direction on several counts, including financial distress amid the ongoing West Asia conflict.
SpiceJet instead offered a commercial property in Gurugram as security and informed the court that the Centre is willing to offer some assistance to it.
In the judgment, the court stated that the hostilities that broke out in February-March could not be used to the advantage of SpiceJet and Singh when the Supreme Court made the arbitration award executable “way back” in July 2023.
It also said the airline’s “declining” financial health has not changed since then and the ground of “financial distress” was considered at the time of passing the March 18 direction.
With respect to the submission that the petitioners should be given some more time to let them make an attempt to sell SpiceJet’s property and deposit the sale proceeds, the court observed that such time was granted to them earlier and the petitioners are “only abusing the indulgence” given to them.
The matter arises from a dispute regarding the non-issuance of warrants in favour of Maran after the transfer of SpiceJet’s ownership to Singh, the controlling shareholder of the airline.
The dispute started after Singh took back control of SpiceJet in February 2015 amid a financial crisis at the airline.
Maran and Kal Airways had transferred their entire 35.04 crore equity shares, amounting to a 58.46-per cent stake, in SpiceJet to its co-founder, Singh, in February 2015 for just Rs 2.
In May 2024, a division bench of the high court set aside an order of a single-judge bench that had upheld an arbitral award asking SpiceJet and Singh to refund Rs 579 crore plus interest to Maran.
A bench of Justices Yashwant Varma and Ravinder Dudeja allowed the appeals filed by Singh and SpiceJet challenging the July 31, 2023, order of the single-judge bench and remanded the matter back to the court concerned to consider the petitions afresh.
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