In a blow to the Ajay Singh-led low-cost carrier (LCC) SpiceJet, the Supreme Court
on Friday dismissed its appeal challenging the Delhi High Court
order that directed it to deposit Rs 579 crore in relation to a share-transfer dispute with media baron Kalanithi Maran.
The Bench headed by Justice Rohinton Nariman heard the counsel to Singh, who now controls SpiceJet, as well as Abhishek Singhvi, who was appearing for Maran, before rejecting the appeal. SpiceJet is now obliged to deposit Rs 250 crore in cash and Rs 329 crore in bank guarantees.
The payment schedule was to start in August.
According to SpiceJet, the high court order was not only wrong in law but harsh as it amounted to infliction of “civil death” on the company. It pleaded that the order would have an effect of undoing all efforts of the new management and saddle the company with huge liabilities with fatal consequences.
Maran, the former promoter of the airline, had transferred his 58.5 per cent stake in the airline to Singh in February 2015, changing the ownership of the LCC.
Under the agreement, Maran was to receive redeemable warrants in return for Rs 690 crore spent on SpiceJet towards operating costs and debt payment. However, this allegedly did not happen because the necessary approvals were not obtained from the Securities and Exchange Board of India.
SpiceJet’s petition said the liabilities were over Rs 2,200 crore, which was substantially more than the amount purportedly brought in by Maran and KAL Airways.
This amount was, in fact, utilised for the purpose it was brought in. “It is with great effort, perseverance and skill that the company under its new management has been able to revive itself and come out from the severe financial strain that it was facing under the management of Maran and others,” the appeal stated.