Kalanithi Maran moves Delhi HC to issue contempt proceedings against SpiceJet

The court on Thursday issued a notice to SpiceJet in the plea and adjourned hearing in the case to 25 April.

Maran alleged that SpiceJet has defied several court orders, including a 5 February directive which asked SpiceJet Ltd to pay ₹50 crore to the former promoter within six weeks.

According to Maran, SpiceJet failed to comply with the court-mandated payment deadline of 18 March, and also said the pay-out was made in two tranches. He also claimed that SpiceJet is in defiance of another order dated 31 July 2023, which had upheld the arbitration award and instructed SpiceJet and Singh to reimburse ₹579 crore plus interest to Maran.

Senior advocate Maninder Singh, representing Maran, told the court that SpiceJet still owes ₹347 crore. They requested the court’s permission to seize SpiceJet’s profits to settle the remaining dues. Furthermore, Singh pointed out SpiceJet’s apparent ability to purchase Go First, despite not clearing its existing liabilities.

In response, debt-laden SpiceJet contended that it has not ignored the court’s orders, highlighting the ₹50 crore payment and compliance with other legal directives. The airline said that its profits are being used to settle debts with various creditors, as per court instructions.

In previous proceedings, SpiceJet had highlighted its financial struggles, citing operational losses, a negative net worth, and responsibilities towards employees that could push the airline towards insolvency. The financial woes were attributed to several factors, including the grounding of Boeing 737 Max aircraft, the impact of the pandemic, and increased fuel costs due to the Ukraine conflict.

In February 2015, Maran transferred his entire shareholding in SpiceJet to Ajay Singh, the current chairman and managing director of the airline, after the carrier nearly went belly up in 2014-15 due to a severe cash crunch. Singh, who paid ₹2 to take over the airline, also took over SpiceJet’s liabilities of ₹1,500 crore. As part of the agreement, Maran and Kal Airways also made payments of ₹679 crore to SpiceJet, under Singh, for issuing warrants and preference shares.

However, Maran approached the Delhi high court in 2017, alleging SpiceJet had not issued convertible warrants and preference shares or returned the money.

The arbitral tribunal on 20 July 2018 rejected Maran’s claim for damages of ₹1,323 crore but awarded him a refund of ₹579 crore, plus interest.

Milestone Alert!
Livemint tops charts as the fastest growing news website in the world 🌏 Click here to know more.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it’s all here, just a click away! Login Now!

Published: 28 Mar 2024, 06:58 PM IST