Supreme Court Directs SpiceJet to Pay Rs 380 Crore to Former Promoter Kalanithi Maran
Summary:
★The Supreme Court has directed SpiceJet to pay the entire arbitration award of Rs 380 crore to its former promoter Kalanithi Maran.
★The order comes in a seven-year-old share transfer dispute between Maran and Ajay Singh, who took over the airline from him in 2015.
★The court criticized SpiceJet for not complying with earlier orders and emphasized the need for “commercial morality” in business dealings.
★The Delhi High Court had previously ordered SpiceJet to pay Rs 380 crore to Maran in June.
★In February, the Supreme Court had asked the airline to pay Rs 75 crore within three months, but SpiceJet’s pleas for an extension were dismissed.
★Maran had transferred his shareholding in SpiceJet to Ajay Singh in 2015, and later approached the Delhi High Court, alleging non-compliance with the deal.
Details:
★The Supreme Court has dealt a blow to cash-strapped airline SpiceJet by directing it to pay the entire arbitration award of Rs 380 crore to its former promoter Kalanithi Maran. This comes in a long-standing dispute over share transfer between Maran and Ajay Singh, who took over the airline from him in 2015.
★The apex court expressed its displeasure with SpiceJet for not adhering to previous orders and stressed the importance of conducting business with “commercial morality.” The court ordered the airline to pay the amount in one go.
★In June, the Delhi High Court had ordered SpiceJet to pay Rs 380 crore to Maran. Earlier in February, the Supreme Court had asked the airline to pay Rs 75 crore within three months, based on Maran’s claim of Rs 362.5 crore in interest dues under a 2018 arbitration award. SpiceJet’s pleas for an extension were rejected by the Supreme Court, which viewed them as delay tactics.
★The bench, comprising Chief Justice DY Chandrachud and Justice PS Narasimha, emphasized the need to follow the orders of the Supreme Court, especially in commercial matters. The court aimed to send a clear message that its orders must be complied with.
★In 2015, Maran transferred his entire shareholding in SpiceJet to Ajay Singh for a nominal amount of Rs 2, along with liabilities of Rs 1,500 crore. However, Maran later approached the Delhi High Court, alleging that SpiceJet had not issued convertible warrants and preference shares or returned the money paid.
★In response to the Supreme Court’s order, SpiceJet issued a statement stating that the present order is a reiteration of the court’s earlier order in February 2023. The airline mentioned that the main petition challenging the award is still pending before the Delhi High Court. SpiceJet expressed its commitment to finding an amicable settlement through discussions with Kalanithi Maran and his firm KAL Airways.
★It is worth noting that SpiceJet has been defaulting on statutory dues like PF and TDS for several months.
In conclusion, the Supreme Court’s directive for SpiceJet to pay Rs 380 crore to Kalanithi Maran marks a setback for the cash-strapped airline. The court’s emphasis on following its orders and conducting business with “commercial morality” highlights the importance of compliance in commercial matters. SpiceJet has expressed its commitment to resolving the dispute through discussions with Maran.
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