SpiceJet v. Kalanithi Maran: Delhi High Court asks SpiceJet to deposit Rs 579 crore
SpiceJet v. Kalanithi Maran: Delhi High Court asks SpiceJet to deposit Rs 579 crore

 

The Delhi High Court bench comprising of J. S Ravindra Bhat and J. Yogesh Khanna has directed budget carrier SpiceJet in connection with a share transfer dispute with its previous owner Kalanithi Maran to deposit Rs 579 crore in 2 installments dismissing the plea of the airline and its co-founder Ajay Singh and believing it was “essential” to modify the previous  single judge order directing the entire amount be deposited in 12 months with Rs 250 crore in cash and Rs 229 crore as bank guarantee and Rs 100 crore short of the total amount of Rs 579 crore  due to the  non-predictable nature of likely injury if entire amount is secured through a deposit by way of a bank guarantee and the remaining by cash.

The lawyers in the case pointed out the error in the calculation to the court staff after the bench had risen to which the bench said that they will take care of it.

In the opinion of the bench the order get would rid of the warrants issue and would also help the company focus on the long term strategy and conduct its business normally without any constraints.

The single judge’s order was on a civil suit by Sun Group chief Kalanithi Maran and his Kal Airways where they had sought issuance of stock warrants in SpiceJet as per a sale purchase agreement (SPA) of 2015 which had made the transfer of ownership of the budget carrier to Ajay Singh. The court in this case had ordered Rs 579 crore be deposited in the court in 5 installments and asked Spicejet and Maran to appoint an arbitral tribunal to decide the share transfer dispute between them in a year.  This was challenged by the SpiceJet and Singh as according to them, the court did not have the jurisdiction.

SEBI, Market regulator had earlier expressed its inability before the single judge to approve the board resolution passed by SpiceJet for issue of warrants in favor of Maran and his Kal Airways which was passed on the courts direction.

Maran and Kal Airways pleaded that despite giving Rs 579 crore to SpiceJet, the carrier had failed to issue them the warrants or allot tranche 1 and 2 of Convertible Redeemable Preference Shares (CRPS) and that the amount was not utilized for paying statutory dues due to which they were also facing prosecution. Also, SpiceJet had earlier told the court that the change of ownership was effected as a rehabilitative measure when it was under the management of Maran, to address the liability of Rs 2,000 crore incurred by the airlineA claim that every penny had been utilized towards operations and discharge of liabilities has also been made.

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