Mumbai: Jet Airways (India) Ltd, India’s largest airline by passengers flown, on Thursday, paid Rs 478 crore to Sahara India Commercial Corp. Ltd. The Bombay high court had, on Wednesday, asked Jet Airways (India) Ltd, to immediately pay Rs 478 crore, including interest, to Sahara India, putting an end to a messy legal battle that has its origins in the former’s April 2007 purchase of Sahara Airlines Ltd.
“We have made full payment to Sahara India. We have made cash payment of Rs 203.5 crore and requested the Bombay high court to discharge Rs 275 crore that was deposited with the court,” said Mahalingam Shivkumar, senior vice president (finance) at Jet Airways.
Mint could not contact Sahara India spokesperson Abhijit Sarkar immediately and could not independently confirm whether Sahara India has recevied the money from Jet and if they are planning to appeal against the high court order in the apex court.
The Bombay high court has given Jet Airways two weeks to make the payment. Jet Airways bought Sahara Airlines—which operated Air Sahara—in April 2007, and later rebranded it JetLite. Jet Airways was prevented from undertaking any significant business transactions due to the legal battle and it had to go through the court to even sell and lease back planes in the normal course of business.
Sahara India had on 26 March 2009 filed an application with the Bombay high court claiming that Jet Airways had defaulted on payments towards the purchase of Air Sahara, and sought the court’s permission to seize Jet Airways’ assets.
Sahara India was demanding the original price of Rs. 2,000 crore for the airline, instead of the renegotiated price of Rs 1,450 crore. In its buyout agreement dated 17 April 2007, Jet Airways had agreed to pay Rs 550 crore each in four equal instalments beginning March 2008 through March 2011. Jet had paid Rs 900 crore by 20 April 2008. In March 2008, the income-tax department demanded pending taxes of Rs 107 crore from Sahara Airlines, now owned by Jet.
For its part, Jet Airways argued that since the amount was due from before the acquisition, it was not responsible for the liability. It then deducted Rs 37 crore from its March 2008 payment to Sahara, triggering a two-year long legal battle.
The shares of Jet Airways lost 1.77% to close at Rs439.4 a piece on Thursday on the Bombay Stock Exchange, or BSE, and the benchmark index, Sensex lost 1.4% to close at 18210.58.