Jet counsel sees 50:50 chance for out-of-court pact with Sahara

Jet Airways has said that it sees a 50:50 chance for an out-of-court settlement with Sahara India in their dispute over alleged non-payment of instalments for the Sahara airline buyout.

Jet’s counsel Harish Salve told this to reporters after both sides assured the Bombay High Court that they would meet soon to try and resolve their differences. It was ultimately a number crunching exercise, Salve said, adding, “It is always better for two commercial parties to settle than litigate.”

Justice DY Chandrachud adjourned the matter to May 6 after Jet’s lawyer, Janak Dwarkadas, and Sahara’s counsel, Fali Nariman, said both sides would meet to sort out the issues, as suggested by the court two days earlier.

The court also allowed Jet to dry-lease three aircraft to Turkish Airlines, two from June 25 and one from July 25. On March 31, the court had restrained Jet from creating any third-party interest on its assets, including 40 aircraft, until its dispute with Sahara was settled.

Sahara India says Jet is liable to pay Rs 2,000 crore instead of the renegotiated amount of Rs 1,450 crore for the buyout of the erstwhile Sahara India Airlines, now Jetlite. The price was brought down to Rs 1,450 crore provided Jet did not default on payment. But it defaulted and so the concession was not tenable, it said.

Jet bought Sahara Airlines from the Sahara group in April 2007 for Rs 1,450 crore after an arbitration award. It paid Rs 900 crore and agreed to pay the balance in four instalments.

Jet says that in March 2008, the income tax department demanded dues of Rs 107 crore from Sahara Airlines. Jet said this amount was due from the Sahara group as it pertained to the period before the acquisition. While paying Sahara an instalment of Rs 137 crore last March, Jet deducted Rs 37 crore against the I-T dues.

This year, too, Jet deducted Rs 50 crore on the same account. Jet says Sahara has now taken a stand that it is not liable to pay the I-T dues.