Spicejet Share Price; SC directs to pay ₹380 cr to Maran
In a significant development, the Supreme Court has ruled that low-cost carrier SpiceJet must pay the complete arbitration award of ₹380 crore to its former promoter Kalanithi Maran, bringing an end to a long-standing share transfer dispute that has spanned seven years.
Also read; India and US defence deal during Modi visit (investonomic.co.in)
The dispute dates back to February 2015 when Maran transferred his complete shareholding in SpiceJet to Ajay Singh, the current chairman and managing director of the airline. This move came after the carrier faced a severe cash crunch in 2014-15, almost leading to its collapse.
Singh acquired the airline for a nominal amount of ₹2 and also took on SpiceJet’s liabilities of ₹1,500 crore. As per the agreement, Maran and Kal Airways made payments totaling ₹679 crore to SpiceJet under Singh’s management, involving the issuance of warrants and preference shares.
Also read; गुजरात में टाटा ग्रुप की गिगा फैक्ट्री, 13,000 करोड़ रुपये (investonomic.co.in)
In 2017, Maran approached the court, stating that he had not received either the shares or the payment he had made for them. The case was subsequently referred to arbitration by the high court.
In July 2018, Maran emerged victorious in the arbitration proceedings, with SpiceJet being directed to pay him ₹579 crore along with interest.
The Delhi High Court had previously directed SpiceJet to pay ₹380 crore to Maran of the Sun Group in June, along with the requirement to disclose its asset details within four weeks.
Earlier, on 13th February, the Supreme Court had instructed SpiceJet to pay ₹75 crore within three months, as part of Maran’s claim for ₹362.49 crore in interest dues, based on a 2018 arbitration award.
Furthermore, the Supreme Court dismissed SpiceJet’s pleas for an extension to pay ₹75 crore to Maran and his KAL Airways, stating that such applications were considered delaying tactics.
A bench headed by Chief Justice DY Chandrachud, along with Justice PS Narasimha, emphasized the importance of adhering to Supreme Court orders, particularly in commercial matters, and aimed to send a clear message with their decision.
Mukul Rohatgi, counsel for SpiceJet, requested the Supreme Court to postpone the hearing for 3-4 days, allowing the airline to present its case and explore potential resolutions due to financial constraints being faced.
However, Maran’s claim for ₹1,323 crore in damages was rejected. Following several appeals, the Supreme Court finally ruled in February 2023 that SpiceJet must pay Kalanithi Maran a total of ₹572 crore.
The payment was to commence with an initial instalment of ₹75 crore. Additionally, the court instructed SpiceJet to provide a bank guarantee of ₹270 crore and settle the remaining dues in cash.
