September 11, 2023
Introduction
In a latest development in the ongoing legal battle between SpiceJet and Sun Group chairman Kalanithi Maran, the airline announced that it has paid ₹62.5 crore out of the due ₹100 crore to Maran as part of an arbitral award execution. This move comes after the Delhi High Court’s order dated 24 August, which mandated SpiceJet to pay ₹100 crore to Maran by 10 September or face asset attachment.
SpiceJet, however, encountered challenges in meeting the initial payment deadline due to a bank holiday on 9 and 10 September. The airline wrote a cheque of ₹37.5 crore in court, but Maran’s representatives declined it, requesting the amount to be transferred via RTGS.
The court has now instructed SpiceJet to ensure the remaining ₹37.5 crore is paid to Maran either today or, at the latest, by tomorrow, depending on banking hours. The case is scheduled to be heard next on 3 October.
Legal Dispute
This legal dispute stems from Maran’s allegations regarding non-issuance of convertible warrants and preference shares or the return of his investment after he transferred his shareholding to Ajay Singh in 2015 during SpiceJet’s financial troubles. An arbitration panel awarded Maran a refund of ₹579 crore plus interest in 2018, which was subsequently upheld by the high court in its 31 July order.
During the proceedings, senior lawyers on both sides presented contrasting arguments. Mahinder Singh, representing Maran, proposed seizing the entire profit of ₹204 crore from SpiceJet, along with future profits, if the debt remains unpaid. Meanwhile, Amit Sibal, representing SpiceJet, argued against immediate payment, stating that it could potentially push the airline into insolvency, which would not be beneficial for the Marans.
Sibal also attributed SpiceJet’s financial struggles to multiple factors, including regulatory restrictions on Boeing 737 Max aircraft, losses due to the COVID-19 pandemic, and increased fuel prices amid the Ukraine conflict.
Another point of contention in the courtroom was the issue of SpiceJet’s asset disclosure. SpiceJet requested the court to ensure the confidentiality of this information, arguing that public disclosure could harm the company’s interests.
Conclusion
This legal battle continues to draw attention as it unfolds, with significant financial implications for both SpiceJet and Kalanithi Maran. The aviation industry and legal experts will be closely monitoring the case’s progress and its potential impact on the airline’s future.
