The financially struggling airline SpiceJet has approached the Delhi High Court requesting additional time to make the first installment payment of 144.5 crore rupees, which is owed to KAL Airways and Kalani Maran. The reason for the request is the anticipation of government financial support.
Senior advocate Mukul Rohatgi, representing the airline, informed the court, presided over by Justice Subramanian Prasad, that SpiceJet received the first tranche of emergency credit support from the government in June. These funds were allocated to cover the company's operational needs.
Rohatgi also noted that the airline was expecting a second tranche of approximately 349 crore rupees, but these funds have not yet been released. He stated to the court that he continues to await his tranche from the Government of India while simultaneously seeking an extension of the payment schedule.
According to the obligation presented on June 13, SpiceJet was required to pay 50 crore rupees within 45 days, with the first payment due on August 27. The remaining amount of 94.5 crore rupees was scheduled to be paid within 90 days.
The court has set a hearing for September 21 to verify SpiceJet's adherence to the agreed payment schedule.
The dispute dates back to 2015
The conflict regarding payments originated from the transfer of a 58.46 percent stake in SpiceJet, owned by Maran and KAL Airways, to promoter Ajay Singh in 2015. This occurred during a period when the airline faced serious financial difficulties.
As part of this deal, Maran invested approximately 679 crore rupees in SpiceJet through convertible warrants and preference shares. Later, he claimed that the new management had not issued him the corresponding securities, which triggered arbitration proceedings.
In July 2018, the arbitral tribunal ruled that SpiceJet must compensate Maran 579 crore rupees with interest. This decision subsequently became the subject of lengthy legal battles in both the Delhi High Court and the Supreme Court.
In February 2023, the Supreme Court ordered the encashment of a bank guarantee worth 270 crore rupees and mandated SpiceJet to pay 75 crore rupees in interest. Furthermore, it warned that failure to comply with this requirement would make the arbitral award enforceable. SpiceJet insists that it has already paid about 729 crore rupees under this ruling, including interest.
Earlier this year, the Delhi High Court assessed the outstanding amount at 194.51 crore rupees. After deducting the 50 crore rupees already paid, the court demanded an additional 144.5 crore rupees from SpiceJet and Ajay Singh.
Following this, SpiceJet requested permission to substitute the monetary payment with property in Gurugram, but this proposal was rejected. Subsequently, the airline approached the Supreme Court, citing its financial difficulties and the impact of the crisis in West Asia.
The Supreme Court later allowed SpiceJet to return to the Delhi High Court considering the events that transpired, including the regional crisis and state support measures for airlines. Following this, the airline agreed to repay the debt of 144.5 crore rupees in installments, linking these payments to the expected government credit support.