The Supreme Court of India has refused to grant relief to budget carrier SpiceJet in its long-running dispute with KAL Airways Pvt. Ltd. and its owner Kalanithi Maran, directing the airline and its promoter Ajay Singh to comply with a Delhi High Court order to deposit ₹144.51 crore.
A bench of Justices PS Narasimha and Alok Aradhe declined to stay the January 19 order of the Delhi High Court and imposed costs of ₹1 lakh on SpiceJet for prolonging the litigation. The court also warned that the cost could be increased to ₹2 lakh if such pleas continued.
During the hearing, senior advocate Amit Sibal, appearing for the airline, urged the court not to levy costs. The bench, however, observed that there had been “tons and tons of litigation” and that it was “never seeing the end” of the arbitral dispute.
With the apex court refusing to interfere, SpiceJet must now deposit ₹144.51 crore with the High Court registry within six weeks, in line with the January 19 directive.
In its January 19 order, Justice Subramonium Prasad recorded that SpiceJet had admitted ₹194.51 crore was due under earlier directions of the Supreme Court. After adjusting ₹50 crore already deposited, ₹144.51 crore remained outstanding.
The High Court noted that clear directions had been issued by the Supreme Court in February and July 2023, requiring compliance within specified timelines. It held that these directions had not been fully adhered to.
Rejecting SpiceJet’s argument that enforcement should await the final outcome of its challenge to the arbitral award, the court said orders of the Supreme Court cannot be kept in limbo. Referring to Article 144 of the Constitution, which mandates that all authorities act in aid of the Supreme Court, it observed that continued delay undermines judicial authority.
The dispute dates back to January 2015, when Kalanithi Maran and KAL Airways transferred their 58.46 percent stake in SpiceJet to Ajay Singh under a share sale and purchase agreement, at a time when the airline was facing acute financial stress.
As part of the deal, Maran and KAL Airways infused about ₹679 crore into the airline towards convertible warrants and preference shares. Maran later alleged that these instruments were not issued by the new management and sought a refund.
The matter was referred to arbitration before a three-member tribunal comprising retired Supreme Court judges. In July 2018, the tribunal rejected Maran’s ₹1,323 crore damages claim but directed SpiceJet to refund ₹579 crore, along with interest, relating to the warrants and preference shares.
Both sides challenged aspects of the award before the Delhi High Court under the Arbitration and Conciliation Act, triggering a prolonged cycle of enforcement petitions, appeals and interim orders.
(By arrangement with livemint.com)
