SpiceJet vs Maran: Airline to deposit ₹144.5 crore in tranches

Budget carrier SpiceJet on Monday told the Delhi High Court that it will deposit the outstanding ₹144.5 crore in its long-running arbitration dispute with Kalanithi Maran and KAL Airways Pvt. Ltd. in phases.

After securing partial financial assistance under the Centre's emergency credit programme for airlines, the carrier said it will deposit ₹50 crore with the court registry within 45 days and the remaining ₹95 crore within 90 days.

The development marks a turnaround for SpiceJet in the legal battle after the airline had earlier argued that it lacked the liquidity to make an immediate cash deposit and had sought permission to furnish a commercial property in Gurugram as security instead.

Senior advocate Mukul Rohatgi, appearing for SpiceJet, informed the court that the airline had received partial financial assistance under the Centre's emergency credit programme introduced to support airlines affected by operational disruptions arising from the recent West Asia conflict.

He submitted that while part of the assistance had already been received, the remaining support was expected shortly, enabling the airline to complete the balance payment within the timeline proposed before the court.

The latest development follows the Supreme Court's 19 July order, which permitted SpiceJet to approach the Delhi High Court again to seek reconsideration of its plea in light of subsequent developments, including the Centre's financial support measures for the aviation sector.

The dispute between SpiceJet and Maran dates back to 2015, when KAL Airways transferred its 58.46% stake in the airline to promoter Ajay Singh during a period of severe financial stress. As part of the transaction, Maran infused around ₹679 crore into the airline through convertible warrants and preference shares.

Maran later alleged that the new management failed to issue those securities, triggering arbitration proceedings.

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

Earlier this year, the Delhi High Court recorded that ₹194.51 crore remained outstanding under its earlier directions. After adjusting ₹50 crore already deposited, the court directed SpiceJet and its promoter Ajay Singh to deposit the remaining ₹144.5 crore with the court registry.

However, SpiceJet failed to comply with the deposit direction and subsequently approached both the Delhi High Court and the Supreme Court through multiple petitions seeking relief.

The airline argued that an immediate cash deposit would worsen its liquidity position and instead sought permission to furnish a commercial property in Gurugram as security.

While the Delhi High Court rejected those pleas, the Supreme Court later permitted SpiceJet to approach the high court again for reconsideration in light of subsequent developments, including the Centre's emergency credit support programme for airlines affected by the West Asia crisis.

SpiceJet did not respond to an email query sent by Mint seeking its comments on the development till press time.