Delhi HC orders SpiceJet, Ajay Singh to pay Rs.100 cr to Kalanithi Maran by September 10

Court warns Ajay Singh that it may attach the airline's assets if the payment is not made by September 10

Court warns Ajay Singh that it may attach the airline's assets if the payment is not made by September 10
Court warns Ajay Singh that it may attach the airline's assets if the payment is not made by September 10

SpiceJet tells Delhi HC it is “struggling to stay afloat”

On Thursday, the Delhi High Court ordered SpiceJet and its Chairman and Managing Director (CMD) Ajay Singh to pay Rs.100 crore to Kalanithi Maran and his KAL Airways by September 10.

If there is a failure in payment, the court may consider attaching the assets of the airlines.

A bench headed by Justice Yogesh Khanna passed the order in an execution petition filed by Maran and KAL Airways seeking execution of the arbitral tribunal award in their favour.

The Court will hear the matter on September 11.

Earlier, the arbitral award was passed in July 2018 and SpiceJet was ordered to refund Rs.270 crore to Maran. The tribunal also ordered the airline to pay interest of 12% per annum on the amounts paid towards warrants and 18% per annum on the sums awarded to Maran if the money is not paid on time.

The validity of the award was upheld by a single judge of the High Court on July 31, 2023.

SpiceJet challenged the same before a division bench. However, when the matter was taken up today, the division bench refused to stay the award.

Subsequently, when the execution petition came up before single-judge Justice Khanna, Senior Advocate Maninder Singh appeared for Maran and submitted that a division bench refused to grant any stay of the award. Hence, SpiceJet has to pay Rs.397 crore to them, it was contended.

Singh also demanded the attachment of SpiceJet’s entire profit of Rs.204 crore towards payment of money owed to Maran.

Senior Advocate Akhil Sibal, appearing for SpiceJet and Ajay Singh, disputed the figure and said that the amount calculated by them stood at Rs.279 crores. He added that the company is struggling financially and that if it goes under insolvency, it will not help anyone.

Justice Khanna, however, said that the Court is only concerned with how they will pay their liabilities to Maran.

In 2018, an arbitral tribunal granted Maran a reimbursement of Rs.579 crore, along with interest. In the course of executing these rulings, the high court directed the airline to deposit approximately Rs.243 crore as a means of securing the interest on the awarded sum.

SpiceJet is a politically exposed company. This airline was floated in 2000 by Ajay Singh who had close links with the BJP and he was once close aide of BJP leader late Pramod Mahajan. But when the Congress-led UPA regime came to power in 2004, the SpiceJet ownership came into the hands of the Maran family. But when the BJP came back to power in 2014, the Maran family shifted the ownership to Ajay Singh in a dubious way. This change of ownership was totally dubious and illegal as the Stock Exchange rules were totally violated.

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