SpiceJet to deposit ₹250 cr by Aug 31
NEWDELHI: Offering interim relief to Kalanithi Maran and his KAL Airways, the Delhi High Court on Monday directed SpiceJet Ltd to pay ₹250 crore in a cash deposit on or before August 31 over a share transfer dispute arising out of a change in the airline’s ownership in 2015.
The money, which is to be deposited in the court registry, serves as a security and will be put to use at a later date, subject to the outcome of ongoing arbitration proceedings between the two parties.
A division bench headed by justice Ravindra Bhat also directed the airline to furnish ₹329 crore by way of a bank guarantee with the court towards the disputed amount on or before 31 July. “Although we do not find merit in the appeal (by SpiceJet) and have dismissed it, we have passed an order modifying the impugned judgement,” justice Bhat said.
He added that the bifurcation was essential considering the unpredictable nature of injury that may be caused to the commercial operation of the airline if the entire amount was secured through a cash deposit.
The case relates to a dispute arising out of non-issuance of warrants in favour of KAL Airways’s non-executive chairperson Kalanithi Maran, after transfer of ownership to Ajay Singh, the current controlling shareholder of SpiceJet.
Over the last few hearings, the court had considered possibilities of resolution between the parties but the proposals were not acceptable to them.
Under one such proposal, the court had considered the possibil- ity of SpiceJet furnishing a bank guarantee of ₹308 crore to the court by August 31, which would be substituted by cash by October 31. The remaining ₹270 crore would be paid in shares.
“This is a good order for us. There is no dilution of stake to Marans nor any payment to them (money to be deposited with court). It gets rid of the warrants issue and will help company focus on the long-term strategy and conduct its business normally without any constraints. The company has the ability to generate these funds. Final decision will be taken by the arbitrator,” said a SpiceJet official who did not want to be named.
On July 29, justice Manmohan Singh had directed SpiceJet to deposit ₹579 crore in five equal monthly instalments with the court registry. The court also asked KAL Airways and SpiceJet to set up an arbitral tribunal to resolve the issue. SpiceJet had appealed against this order.