New Delhi: Budget carrier SpiceJet and its chairman and managing director Ajay Singh have filed a review petition before the Delhi high court, seeking relief from an earlier direction requiring the airline to deposit ₹144.5 crore within four weeks in its long-running arbitration dispute with Kalanithi Maran and KAL Airways Pvt. Ltd.
Justice Subramonium Prasad, who heard the matter on Tuesday, adjourned the hearing to 13 April after parties sought time. However, the court orally observed that filing a review petition does not absolve SpiceJet of its obligation to comply with the order to deposit the amount by 14 April.
“You have to comply with the order. The fact that you have filed this application is not a passport to not comply with the order,” Justice Prasad remarked.
The review follows the high court’s 18 March order, where it rejected SpiceJet’s plea seeking modification of its January direction. The airline had proposed furnishing an unencumbered immovable property worth approximately ₹148 crore as security, instead of making a cash deposit. However, the court declined to accept this alternative and insisted on a cash deposit.
The review plea assumes significance as SpiceJet is facing a severe liquidity crunch due to flight disruptions linked to the West Asia war. Around 22,000 passengers and 7,000 employees have been affected due to the war, senior counsel Amit Sibal told the court.
According to submissions made earlier before the court, nearly 40% of the airline’s flights operate on Gulf routes, many of which have been affected, leading to cancellations and financial stress.
The high court in January directed SpiceJet to deposit ₹144.5 crore, following which it approached the Supreme Court, which refused to interfere with the high court direction. SpiceJet then moved the high court in early March seeking to modify the order by offering property instead of cash. The court rejected this request on 18 March and asked the airline to deposit the amount within four weeks, following which SpiceJet has filed a review petition.
The apex court also imposed costs of ₹1 lakh on the airline for prolonging the litigation.
The refusal meant SpiceJet was required to comply with the high court’s 19 January order within six weeks, prompting the airline to file multiple pleas seeking modification of the direction. The high court recorded that SpiceJet had admitted that ₹194.51 crore was due and payable under earlier Supreme Court directions. After adjusting for ₹50 crore already deposited, ₹144.51 crore remains outstanding.
The dispute dates back to January 2015, when Kalanithi Maran and KAL Airways transferred their 58.46% stake in SpiceJet to Ajay Singh at a time when the airline was facing acute financial distress. As part of the transaction, Maran and KAL Airways infused about ₹679 crore into the airline towards issuance of convertible warrants and preference shares.
Maran later alleged that these instruments were not issued under the new management and sought a refund. The matter was referred to arbitration before a three-member tribunal comprising retired Supreme Court judges.
In July 2018, the tribunal rejected Maran’s ₹1,323 crore damages claim but directed SpiceJet to refund ₹579 crore, along with interest, relating to the warrants and preference shares.
Both sides challenged aspects of the award before the Delhi High Court, triggering prolonged enforcement proceedings, appeals and interim orders across courts.
SpiceJet has maintained that it has already paid about ₹730 crore to Maran and KAL Airways, including the principal amount of ₹579 crore and around ₹150 crore towards interest.
The dispute continues to remain a significant legal and financial overhang for the airline, which has in recent years faced liquidity pressures, aircraft grounding due to unpaid dues, and insolvency petitions from lessors and creditors.
Queries emailed to Spicejet were unanswered till press time.