SpiceJet seeks more time from Delhi HC to meet ₹144.5 cr payment dues
Debt-laden budget carrier SpiceJet has sought additional time from the Delhi High Court to make the first instalment of a Rs 144.5 crore payment due to KAL Airways and Kalanithi Maran, citing delays in receiving government-backed financial support.
Senior advocate Mukul Rohatgi, appearing for the airline, told a Bench headed by Justice Subramanian Prasad that SpiceJet had received the first tranche of emergency credit support from the government in June. The funds, he said, had been deployed towards the airline’s operational requirements.
The airline was expecting a second tranche of around Rs 349 crore, but the funds had not yet been released, Rohatgi said. “I still expect my tranche from the Government of India,” he told the court while seeking additional time to adhere to the payment schedule.
According to an undertaking given on 13 June, SpiceJet was required to deposit Rs 50 crore within 45 days, with the first payment falling due on 27 August. The balance Rs 94.5 crore was to be paid within 90 days.
The court has now listed the matter for 21 September to examine SpiceJet’s compliance with the agreed payment schedule.
Dispute dates back to 2015
The payment dispute stems from the 2015 transfer of a 58.46 per cent stake in SpiceJet held by Maran and KAL Airways to promoter Ajay Singh, at a time when the airline was facing severe financial difficulties.
As part of the transaction, Maran had invested about Rs 679 crore in SpiceJet through convertible warrants and preference shares. He later alleged that the securities that were to be issued to him were not issued by the new management, triggering arbitration proceedings.
In July 2018, an arbitral tribunal directed SpiceJet to refund Rs 579 crore to Maran along with interest. The award subsequently became the subject of prolonged litigation before the Delhi High Court and the Supreme Court.
In February 2023, the Supreme Court directed the encashment of a Rs 270 crore bank guarantee and ordered SpiceJet to pay Rs 75 crore towards interest. It also warned that failure to comply would render the arbitral award executable. SpiceJet has maintained that it has paid about Rs 729 crore towards the award, including interest.
The Delhi High Court earlier this year assessed the outstanding amount at Rs 194.51 crore. After accounting for Rs 50 crore already deposited, it directed SpiceJet and Ajay Singh to pay a further Rs 144.5 crore.
SpiceJet subsequently sought permission to substitute the cash payment with a property in Gurugram, but the proposal was rejected. The airline then approached the Supreme Court, citing its financial difficulties and the impact of the West Asia crisis.
The Supreme Court later permitted SpiceJet to return to the Delhi High Court in view of developments, including the regional crisis and government support measures for airlines. The airline thereafter agreed to clear the Rs 144.5 crore liability in instalments, linking the payments to the expected government-backed credit support.
