Kal Airways and media baron Kalanithi Maran on Monday told the Supreme Court that they were not agreeable to two proposals to settle their dispute with SpiceJet on payment of interest in connection with a share transfer issue as the low-cost airline owed them around Rs 920 crore in pursuance of an arbitral award.
- Approach to Supreme Court: Media baron, Maran and Kal Airways approached the Supreme Court, urging it to lift the stay on a Delhi high court order asking SpiceJet to deposit ₹243 crore as interest on ₹579 crore to be payable to Maran in the dispute. The Supreme Court stayed the Delhi high court order in November 2020.
- Proposal of settlement: A bench comprising Chief Justice N V Ramana and Justices A S Bopanna and Hima Kohli, at the outset, inquired about the view of Kal Airways Pvt Ltd and Maran whether they were agreeable to the two proposals of SpiceJet to settle the dispute. SpiceJet, in its first offer, proposed that it would pay Rs 300 crores towards a full and final settlement of the dispute or secondly, out of the Bank Guarantee of Rs 270 Crores deposited with the Delhi High Court, the low-cost airlines will give Rs 100 crores for now and an order will be passed by the apex court urging the high court to expeditiously decide the case related to the arbitral award.
- Maran declines court offer to settle dispute: Kalanithi Maran is the former promoter of SpiceJet, on Monday rejected the ₹ 600 crore one-time settlement offer made by the airline to end a long-standing share-transfer dispute between the two. Appearing before a Bench led by Chief Justice of India N.V. Ramana, senior advocate Maninder Singh, for Mr. Maran, informed the court that his client had refused SpiceJet’s offer of a total ₹600 crore in cash to settle the dispute with no room for further litigation. This comes after the Supreme Court on Thursday had asked Maran-led Kal Airways, the former promoter of the carrier SpiceJet Ltd, to settle its dispute with the airline.
- Reason for decline: Mr. Singh, the counsel of Mr Maran on the court’s query, clarified that his client had also declined an alternative offer made by the airline to disburse a certain amount, ₹100 crore, from the bank guarantee of ₹270 crore, to Mr. Maran and to fastrack the litigation. “Both offers are declined,” Mr. Singh submitted. He explained that the total amount owed was about ₹920 crore. “Then we will hear the matter,” the CJI reacted to Mr. Singh’s submissions. The court scheduled the next hearing on March 2.
- Approach to High Court in 2017: As part of the agreement, Maran and Kal Airways made payments of ₹679 crore to SpiceJet, for issuing warrants and preference shares. However, Maran approached the Delhi high court in 2017, alleging the convertible warrants and preference shares were not issued, and nor was the money returned by the airline and Singh.
- Credit Suisse AG: Spicejet is not the only problem. The airline is also facing action from financial firm Credit Suisse AG. Credit Suisse AG has alleged that SpiceJet failed to honour its commitment to pay the bills for over USD 24 million raised by it towards maintenance, repairing, and overhauling of the aircraft engines and components. The Swiss financial firm had moved Madras High Court in this matter. The high court, in its verdict, ordered the winding up of the airlines and directed the official liquidator attached to the high court to take over the assets. There is also a stay in this matter for resolution.
- Stay on Delhi High Court: In the present case concerns a plea by Mr. Maran and KAL to lift a November 6, 2020 order of stay on a Delhi High Court direction to the airline to deposit ₹243 crore as interest on the prinicipal amount of ₹578 crore involved in the dispute. Senior advocate Mukul Rohatgi, for the airline, had in the last hearing said that out of the principal amount of ₹578 crore awarded in arbitration, SpiceJet had already paid ₹308 crore in cash and deposited a bank guarantee of ₹270 crore.
- Proposal: The counsel of Spice jet Mr. Rohatgi had to pay the bank guarantee equivalent amount of ₹270 crore in cash and top it up with additional ₹22 crore, aggregating the total payout to ₹600 crore as full and final settlement of all disputes between the parties. KAL and Mr. Maran had transferred their shareholding to Ajay Singh in December 2014. The dispute relates to non-issuance of warrants and preference shares in favour of Mr. Maran.
- Consider the proposal: After hearing both the parties, the top court had asked Maran to consider the ₹ 600 crore offer made by SpiceJet.In February 2015, Maran had transferred his shareholding in SpiceJet to Ajay Singh, the current chairman and managing director of the airline.This was after the airline nearly went belly-up during 2014-15 due to a severe cash crunch. Singh, who paid ₹2 to take over the airline, also took over SpiceJet’s liabilities of ₹1,500 crore. As part of the agreement, Maran and Kal Airways also made payments of ₹679 crore to SpiceJet, under Singh, for issuing warrants and preference shares.
HON’BLE MR. JUSTICE N.V RAMANA
CJI, Supreme Court of India
HON’BLE MR JUSTICE BOPANNA
Judge Supreme Court of India
HON’BLE MS. JUSTICE HIMA KOHLI
Judge, Supreme Court of India
