SpiceJet to deposit Rs 579 cr in row with Maran: HC

The Delhi High Court on Monday directed budget carrier SpiceJet to deposit Rs 579 crore in connection with a share transfer dispute with its previous owner Kalanithi Maran, but provided it some relief by allowing it to deposit the amount in two parts.

A bench of Justices S Ravindra Bhat and Yogesh Khanna said that it was “essential” to modify the single judge order, which had directed that the entire amount be deposited in 12 months, due to the “unpredictable nature of likely injury that may be caused to the commercial operations of the company if entire amount is secured through a deposit”.

The court said that part of the amount can be deposited by way of a bank guarantee and the remaining by cash and dismissed the plea of the airline and its co-founder Ajay Singh against the single judge’s July last year order.

The bench had initially said that Rs 250 crore in cash and Rs 229 crore as bank guarantee should be deposited, which was Rs 100 crore short of the total amount of Rs 579 crore.

The lawyers in the case pointed out the error in the calculation to the court staff after the bench had risen.

Thereafter, when the judges came back after a few minutes, the lawyers mentioned the same to them and the bench said it will “take care of it”.

Reacting to the verdict of the high court, SpiceJet officials said on condition of anonymity that there will be no dilution of stake to Marans.

They said the order “gets rid of the warrants issue and will help the company focus on the long term strategy and conduct its business normally without any constraints”. The officials also claimed the company has the ability to generate these funds and added that a final decision will be taken by the arbitrator.

SpiceJet and Singh had challenged the single judge’s July last year’s interim order saying the court did not have the jurisdiction.

The single judge’s order had come on a civil suit by Sun Group chief Kalanithi Maran and his Kal Airways.

In their suit, Maran and his airline company had sought issuance of stock warrants in SpiceJet to them as per a sale purchase agreement (SPA) of 2015 which had led to the transfer of ownership of the budget carrier to Ajay Singh.