SpiceJet seeks more time to pay ₹50 crore to Maran

Cash-strapped budget airline SpiceJet Ltd on Monday sought more time from the Delhi High Court to deposit the first ₹50 crore instalment towards the ₹144.5 crore it owes Kalanithi Maran and KAL Airways Pvt. Ltd in a long-running dispute.

Senior advocate Mukul Rohatgi, appearing for SpiceJet, told a bench headed by Justice Subramanian Prasad that the airline had received the first tranche of emergency credit support from the government in June and had used the funds for its operations.

SpiceJet was expecting a second tranche of about ₹349 crore, but the funds had not yet materialized, Rohatgi said. The airline had expected the money by now and planned to use it to meet its payment obligations.

“I still expect my tranche from the Government of India,” Rohatgi told the court, seeking additional time to comply with the payment schedule.

SpiceJet had on 13 June undertaken to deposit ₹50 crore within 45 days, with the first instalment becoming due on 27 August, and the remaining ₹95 crore within 90 days.

The court listed the matter for 21 September to assess SpiceJet’s compliance with the payment schedule.

A query sent to SpiceJet seeking a response remained unanswered until press time.

Long-running dispute

The latest development is part of a series of legal proceedings over SpiceJet’s outstanding liability to Maran and KAL Airways.

The dispute dates back to 2015, when Maran and KAL Airways transferred their 58.46% stake in SpiceJet to promoter Ajay Singh during a period of severe financial stress at the airline.

As part of the transaction, Maran had infused around ₹679 crore into SpiceJet through convertible warrants and preference shares. Maran subsequently alleged that the new management failed to issue the securities, leading to arbitration proceedings.

In July 2018, the arbitral tribunal directed SpiceJet to refund ₹579 crore along with interest. The dispute subsequently went through multiple rounds of litigation before the Delhi High Court and the Supreme Court.

In February 2023, the Supreme Court directed the encashment of a ₹270 crore bank guarantee and ordered SpiceJet to pay ₹75 crore towards interest, warning that non-compliance would make the arbitral award executable. SpiceJet has said it has already paid around ₹729 crore towards the award, including interest.

Earlier this year, the Delhi High Court recorded ₹194.51 crore as outstanding and, after adjusting ₹50 crore already deposited, directed SpiceJet and Ajay Singh to deposit ₹144.5 crore. SpiceJet’s attempts to replace the cash deposit with a Gurugram property were rejected, after which it approached the Supreme Court citing financial stress and the West Asia crisis.

The Supreme Court subsequently allowed SpiceJet to return to the Delhi High Court in light of subsequent developments, including the West Asia crisis and government support measures for airlines. SpiceJet then agreed to pay the ₹144.5 crore in phases with the help of government credit support.