Delhi HC asks SpiceJet and CMD Ajay Singh to pay Rs 100 cr to Kalanithi Maran to prove bona fide

The division bench of Delhi High Court on Thursday refused to stay its single-judge order upholding an arbitral award asking SpiceJet and its promoter Ajay Singh to pay Sun Group Chairman Kalanithi Maran an amount of Rs 270 crore plus interest.

The court asked them to pay Rs 100 crore by September 10 to prove bona fide, subject to their rights and contentions.

On Wednesday, SpiceJet and its CMD moved the High Court challenging a single judge's order directing them to refund over Rs 270 crore to Maran and Kal Airways.

Besides, they sought to waive the 12 per cent interest on warrants and set aside the 18 per cent interest granted in the award.

The next date of hearing is on September 11.

Kal Airways and Maran also requested to invalidate the portion of the award that included interest on the amount of Rs 270 crore for the non-issuance of compulsory redeemable preference shares.

Both requests were rejected. The HC on Thursday while issuing notice to airlines said that it is bound by the Supreme Court’s February order that asked the carrier to pay Rs 75 crore within 3 months.

SpiceJet’s lawyers submitted before the court that they would pay Rs 75 crore immediately and that the airline employs 10,000 people but the bench denied any relief.

While the application for stay stands rejected by the division bench, the main appeal will be heard on October 31.

Earlier, Maran’s counsel had argued that SpiceJet and Singh filed their affidavit in a 'sealed cover' and in a format not mandated by law. Maran’s lawyer claimed that the company's liability to Maran now is over Rs 395 crore.

On July 31, the Delhi HC upheld the validity of the arbitral award against SpiceJet.

Shares of SpiceJet Ltd were trading at Rs 31.70, up by 0.09 per cent, at 2 PM.

The dispute

The tiff between Maran and SpiceJet goes back to 2015 when CMD Singh, who used to own SpiceJet before Maran, bought it back from him.

Maran had transferred his 58.46 per cent stake in the airline to Singh for just Rs 2 in 2015.

However, as per the deal, Maran was supposed to get redeemable warrants in return for the money invested by him during his tenure as a promoter of the airline.

Maran was liable to get Rs 18 crore warrants, which is about 26 per cent stake in SpiceJet.

But Maran did not get his share of the money, neither convertible warrants nor preference shares.

Maran then claimed that suffered damages of over Rs 1,300 crore. Thereafter, Maran approached the Delhi High Court, which referred the matter to arbitration.

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