Bengaluru: Upholding the Delhi High Court’s division bench decision to set aside the arbitral award upheld by a single judge, which required SpiceJet to pay Kalanithi Maran and his KAL Airways Rs 579 crore plus interest, the Supreme Court (SC) on Friday, refused admit the appeal filed by the media baron and his airline.
In fact, coming down heavily on the single judge bench, the Chief Justice of India DY Chandrachud, observed, "This is atrocious... Where has he (single judge) even applied his mind? We are in agreement with the reasoning of the division bench sending it back to a single judge for order again under Section 34."
In 2015, Ajay Singh acquired a 58.46% stake in SpiceJet from Kal Airways and Maran of the Sun Network for a nominal sum of Rs 2, along with assuming a debt liability of Rs 1,500 crore. This transfer occurred when the airline faced financial difficulties and was temporarily grounded due to severe cash crunch. Singh, the co-founder of SpiceJet, now serves as its chairman and managing director.
As part of the agreement, Maran and Kal Airways claimed to have invested Rs 679 crore in SpiceJet through warrants and preference shares. Subsequent to this share transfer process got snagged in a dispute. In 2016, the Delhi High Court constituted a tribunal to find a resolution. The arbitration tribunal ruled in favour of Maran and Kal Airways.
When this was challenged, a single judge bench of the Delhi High Court, upheld the arbitral award and sought that the SpiceJet promoter pay Rs 579 crore plus interest to Maran and Kal Airways. On May 17, a division bench of the Delhi High Court, set aside the single judge bench order and admitted the appeals of Singh and SpiceJet against it. Seek recourse, Maran headed to the apex court.
Pursuant to the SC order on Friday, SpiceJet issued a statement saying it will now pursue a refund of Rs 450 crore. It 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.
"In addition to significant steps being taken by SpiceJet to raise new funds, this refund will additionally strengthen the airline’s financial position and enable further expansion," the airline added.
The budget carrier posted a net loss of Rs 423.7 crore in FY24. This was a remarkable improvement on the previous year’s consolidated net loss of Rs 1,513 crore.