The Delhi High Court on Wednesday gave low-cost airline SpiceJet a last chance to make a deposit ₹144.5 crore within four weeks in the ongoing arbitration dispute with Kalanithi Maran and KAL Airways Pvt. Ltd.
The order increases compliance pressure on the airline after several rounds of litigation, with courts rejecting attempts to delay the cash payment despite liquidity concerns.
Justice Subramonium Prasad dismissed SpiceJet’s plea seeking modification of a January order under which the airline proposed to furnish a property worth approx. ₹148 crore as security in lieu of depositing cash.
The judge said the claim could have been dismissed outright but was dealt with at length due to the wider concerns of the parties involved.
“Dismissed. I extend the time for another four weeks to deposit the money. Sell the property in four weeks,” Justice Prasad said.
The court refused to allow the property to be used as collateral, even though the airline argued that depositing the amount would present operational problems.
Senior lawyer Amit Sibal, appearing for the airline, argued that an immediate payment would disrupt operations.
“Can I just point out that my operations will be affected? There are 22,000 passengers and 7,000 employees. Almost 40% of my flights are to the Persian Gulf which have been cancelled. This creates another liquidity problem. I am therefore offering unencumbered assets – I have provided the letter,” Sibal told the court.
SpiceJet argued that it was facing a liquidity crunch due to flight cancellations on Gulf routes.
“It is only because of the problems that the employees and the people who work there will face that I have heard this matter for so long,” Justice Prasad said.
Read also | SpiceJet seeks relief on ₹144 crore payment to Maran, cites losses, Gulf War
The petition was filed on March 6 after the Supreme Court of India on February 27 refused to stay the Supreme Court’s earlier order ordering the airline and its promoter Ajay Singh to impose ₹144.51 million crowns.
The Supreme Court also ordered costs ₹1 lakh to the airline for prolonging the litigation.
The rejection meant that SpiceJet had to comply with the Supreme Court’s January 19 order within six weeks, prompting the airline to file a fresh application for permission to provide property in lieu of cash.
Fees granted
In its January 19 order, the Supreme Court noted that SpiceJet had admitted ₹194.51 crore was due as per earlier directions of the Supreme Court.
After editing ₹50 million already deposited, ₹144.51 million crowns remain unpaid.
The court noted that the Supreme Court had issued clear directions in February and July 2023 demanding compliance within the stipulated time limits and held that those directions were not fully complied with.
The beginnings of the series
The dispute dates back to January 2015 when Kalanithi Maran and KAL Airways transferred their 58.46% stake in SpiceJet to Ajay Singh at a time when the airline was facing acute financial distress.
As part of the transaction, Maran and KAL Airways delivered approx ₹$679 million to the airline to issue convertible warrants and preferred shares.
Read also | Why SpiceJet is back in Supreme Court: Inside the ₹144 crore Maran dispute
Maran later claimed that these instruments were not issued under the new management and demanded a refund.
The matter was referred to arbitration before a three-judge tribunal composed of retired Supreme Court judges.
In July 2018, the tribunal rejected Maran’s ₹1,323 crore in damages but ordered SpiceJet to refund the money ₹579 million crowns, together with interest related to warrants and preference shares.
Both sides challenged aspects of the award in the Delhi High Court, triggering protracted enforcement proceedings, appeals and interim orders across courts.
Read also | SpiceJet MD warns of possible ‘fuel surcharge’ even as oil price remains at $90
SpiceJet says it has already paid ₹$730 million for Maran and KAL Airways, including principal ₹579 million and around ₹150 million as interest.
The dispute remains a significant legal and financial overhang for the airline, which has faced liquidity pressures, aircraft grounding due to unpaid fees and insolvency proposals from lessors and creditors in recent years.
