SpiceJet to seek refund of Rs 450 crore from Kalanithi Maran and his firm

Private airline SpiceJet has already disbursed Rs 730 crore to Maran and his firm, of which, Rs 580 crore represents the principal amount, with an additional interest component of Rs 150 crore

Following a favourable ruling by a division bench of the Delhi High Court, private airline SpiceJet on Wednesday said that it will seek a refund of Rs 450 crore from former promoter Kalanithi Maran and his company, KAL Airways.

In an exchange filing, the airline said, “SpiceJet will seek a refund of Rs 450 crore out of the Rs 730 crore it has previously paid to former promoter Kalanithi Maran and his firm, KAL Airways, following the Delhi High Court’s order on May 17.

SpiceJet has already disbursed Rs 730 crore to Maran and his firm. Of this, Rs 580 crore represents the principal amount, with an additional interest component of Rs 150 crore.

The company said, “With the setting aside of the impugned order, SpiceJet is set to receive a refund of Rs 450 crore.”

SpiceJet’s Chief Executive Ajay Singh’s appeal raised various crucial concerns regarding the refund award and the rationale behind the interest in the case. The division bench of the HC recognised significant merit in these concerns, highlighting that they were insufficiently addressed in the prior order dated July 31, 2023.

“In its ruling, the Division Bench held that the single judge had erred in dismissing the Section 34 petitions of Ajay Singh and SpiceJet without due consideration of the claims of patent illegality and the order of refund passed against SpiceJet despite admitted breaches on the part of KAL Airways and Kalanithi Maran,” the company stated.

The court observed that penal interest was levied despite SpiceJet not breaching the share purchase agreement. “These facts not being considered by the single judge, the appeals of Ajay Singh and SpiceJet have been allowed, and the impugned judgment dated July 31, 2023, has been set aside,” the airline said.

On May 17, the Division Bench of the Delhi High Court, comprising Justices Yashwant Varma and Ravinder Dudeja, approved SpiceJet’s appeals against the order issued by a single judge on July 31, 2023. The case has been referred back to the relevant court for reconsideration of the petitions contesting the arbitral award.