Spicejet gains after Delhi high court dictates to seek refund worth Rs 450 cr from Kalanithi Maran

Spicejet jumped 2.72% to Rs 62.66 after the company said that it 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.

The Division Bench of the Delhi High Court ruled on Friday, 17 May in favour of SpiceJet and its promoter, Ajay Singh, in the long-standing share transfer case against former promoter Kalanithi Maran and his firm, KAL Airways. This ruling overturns a previous decision by a single-judge bench, positioning SpiceJet to claim a substantial refund based on legal advice.

SpiceJet has paid a total of Rs 730 crore, comprising Rs 580 crore in principal along with an additional Rs 150 crore towards interest to Maran and KAL Airways. With the setting aside of the impugned order, SpiceJet is set to receive a refund of Rs 450 crore.

The appeal brought forth by SpiceJet and Ajay Singh challenged several critical issues related to the award of refund and the justification of interest in the case. The Division Bench found substantial merit in these challenges, noting that they were not adequately addressed in the previous 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 Court has also noted that interest amounting to penal interest had been charged despite SpiceJet not being in any breach of 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.

SpiceJet operates as an Indian airline with a focus on providing affordable and accessible travel options for a wide range of Indian passengers. The company holds IATA-IOSA certification and manages a fleet comprising Boeing 737s, Q-400s, and freighters.

The low-cost air carriers consolidated net loss narrowed to Rs 448.99 crore in Q2 FY24 as compared with a net loss of Rs 833.32 crore in Q2 FY23. Revenue from operations slipped 29% year on year to Rs 1,347.52 crore in the quarter ended 30 September 2023.

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