SC Stays HC Order Asking SpiceJet To Pay Rs 243 Cr To Kalanithi Maran, Firm

The Supreme Court has stayed a Delhi High Court order asking cash-strapped airlines SpiceJet to deposit around Rs 243 crore as interest in connection with a share transfer dispute with its former promoter and media baron Kalanithi Maran and his firm KAL Airways.

A bench comprising Chief Justice S A Bobde and justices A S Bopanna and V Ramasubramanian also issued notices to Kalanithi Maran and his firm on an appeal of SpiceJet Ltd and its promoter filed against the September 2 order of the Delhi High Court.

"Issue notice returnable within four weeks.

"There shall be a stay of operation of the impugned order until further orders," said the bench in its order after hearing both parties via video conferencing on Friday.

SpiceJet and its promoter Ajay Singh were asked to deposit around Rs 243 crore as interest payable on Rs 579 crore, which the high court had in 2017 asked the airline to deposit under the 2018 arbitration award in the share transfer dispute.

The high court had granted six weeks to SpiceJet Ltd to make the payment and the deadline for paying the money, as per the September 2 order, expired on October 14.

After this, Maran and his firm had moved the high court for attachment of the entire shareholding of Singh in Spicejet and taking over the management for non-payment of Rs 243 crore.

The top court took note of the appeal of the Spicejet and passed an interim order staying the high court order.

Maran and KAL had moved the high court over a share transfer dispute with SpiceJet, demanding that 18 crore warrants redeemable as equity shares be transferred to them.

The high court on July 29, 2016 had asked both parties to settle the share transfer dispute under arbitration.

It had directed SpiceJet and Singh to deposit Rs 579 crore in the high court's registry.

SpiceJet was permitted to furnish a bank guarantee for Rs 329 crore and make a cash deposit of the remaining sum of Rs 250 crore by the high court.

The apex court, in July 2017, had dismissed SpiceJet's appeal against the HC order.

On July 20, 2018, the arbitral tribunal had rejected Maran's claim of damages of Rs 1,323 crore for not issuing warrants to him and KAL Airways but had awarded him a refund of Rs 579 crore plus interest.

Maran, the owner of Sun TV Network, then moved the high court against the arbitration award.

The matter pertained to a dispute arising out of non-issuance of warrants in favour of Maran after the transfer of ownership to Singh, the controlling shareholder of SpiceJet.

The dispute started after Singh took back control of the airline in February 2015 amidst a financial crisis.

Maran and his KAL Airways had transferred their entire 350.4 million equity shares in SpiceJet, amounting to a 58.46 percent stake in the airline, to its co-founder Singh in February 2015 for just Rs 2.

Spicejet was debt-ridden and was even forced to shut operations for a day in December 2014 due to a cash crunch.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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