The Supreme Court on Tuesday rejected cash-strapped low-cost carrier SpiceJet and its chairman and managing director, Ajay Singh, from seeking extension of time to deposit ₹144 crore in connection with their long-running arbitration dispute with former promoter Kalanithi Maran and KAL Airways. A bench of Justices PS Narasimha and Alok Aradhe took note of submissions made by senior advocate Mukul Rohatgi, appearing for SpiceJet, that the ongoing West Asia crisis has impacted the airline's operations and finances. The top court, however, refused to grant time and asked the budget airline to move the high court.
Referring to a recent government's bailout programme for airlines, which has an outlay of ₹5,000 crore, Rohatgi sought three months time to deposit the amount. As reported by ET Now, the bench remarked that "What happened before the West Asia crisis? Something which has happened on May 5 (Bailout announcement) cannot become a ground for extension of time." During the hearing, Rohatgi said, "Private interest must yield to public interest. I have thousands of employees." The counsel appearing for KAL Airways vehemently opposed the extension of time, saying a review cannot be allowed in guise of an appeal.
The high court had on May 4 dismissed pleas moved by SpiceJet and its promoter Ajay Singh seeking a review of an earlier order asking the airline to deposit ₹144 crore. According to ET Now, it also imposed a cost of ₹50,000 on the airline and Singh, and directed them to take immediate steps to deposit the amount of ₹144,51,69,887 with the registry. On January 19, the court directed SpiceJet and Singh to deposit ₹144 crore with the registry within six weeks against an admitted liability of ₹194 crore, pursuant to an arbitration award against them in their dispute with Maran. On March 18, the time to make the deposit was extended by four weeks.
In the judgment, the court stated that the hostilities that broke out in February-March could not be used to the advantage of SpiceJet and Singh when the Supreme Court made the arbitration award executable "way back" in July 2023. As reported by ET Now, it also said the airline's "declining" financial health has not changed since then and the ground of "financial distress" was considered at the time of passing the March 18 direction. The court observed that such time was granted to them earlier and the petitioners are "only abusing the indulgence" given to them. With respect to the submission that the petitioners should be given some more time to let them make an attempt to sell SpiceJet's property and deposit the sale proceeds, the court noted that such time was granted to them earlier and the petitioners are "only abusing the indulgence" given to them.
The matter arises from a dispute regarding the non-issuance of warrants in favour of Maran after the transfer of SpiceJet's ownership to Singh, the controlling shareholder of the airline. According to ET Now, the dispute started after Singh took back control of SpiceJet in February 2015 amid a financial crisis at the airline. Maran and KAL Airways had transferred their entire 35.04 crore equity shares, amounting to a 58.46-per cent stake, in SpiceJet to Singh in February 2015 for just ₹2. In May 2024, a division bench of the high court set aside an order of a single-judge bench that had upheld an arbitral award asking SpiceJet and Singh to refund ₹579 crore plus interest to Maran. A bench of Justices Yashwant Varma and Ravinder Dudeja allowed the appeals filed by Singh and SpiceJet challenging the July 31, 2023, order of the single-judge bench and remanded the matter back to the court concerned to consider the petitions afresh.
