SpiceJet Should Consider 'Giving Some Interest' To Kal Airways, Kalanithi Maran, Says Supreme Court

The Supreme Court on Tuesday asked the low-cost airline SpiceJet Ltd. to consider “giving some interest” to media baron Kalanithi Maran and his Kal Airways for settling the dispute relating to a share-transfer issue.

A bench comprising Chief Justice NV Ramana and Justices Krishna Murari and Hima Kohli has now fixed the case for further hearing on April 18 after senior advocate Mukul Rohatgi, appearing for the Spicejet, sought some time for either settling the dispute or arguing the matter. “They should pay some interest. Ask them of giving some interest,” said the bench.

At the outset, a counsel for Maran and others said that the low–cost airline did not want to pay “any interest”. “We will have it on Monday,” the bench said when Rohatgi said that he would again give the settlement a try or else would argue it on the next date of hearing.

Earlier, the bench had fixed the case for hearing on April 12 saying that the endeavour should be to settle the dispute.

Prior to this, the apex court on Feb. 14, was told by Kal Airways and Maran that they were not agreeable to two proposals to settle their dispute with SpiceJet on payment of interest in connection with the share-transfer issue as the low-cost airline owed them around Rs 920 crore in pursuance of an arbitral award.

SpiceJet, in its first offer, had proposed that it would pay Rs 300 crore towards a full-and-final settlement of the dispute or secondly, of the bank guarantee of Rs 270 crore deposited with the Delhi High Court, it would give Rs 100 crore for now and an order will be passed by the apex court urging the high court to expeditiously decide the case related to the arbitral award.

'They (Kal Airways and Maran) have considered the offer made by my friend (senior advocate Mukul Rohatgi, appearing in the matter on behalf of SpiceJet). But they have not found them acceptable,' senior counsel Maninder Singh, who was assisted by Karanjawala and Company, had told the top court on Feb. 14.    

The bench was hearing SpiceJet's appeal against the Nov. 2, 2020 order of the high court, asking the airline to deposit around Rs 243 crore as interest in connection with the share transfer dispute with its former promoter, Maran, and Kal Airways.                  

On Nov. 7, 2020, the apex court had stayed the Delhi High Court order asking SpiceJet to deposit around Rs 243 crore as interest in connection with the share transfer dispute.                  

SpiceJet and its promoter Ajay Singh were asked to deposit around Rs 243 crore as interest payable on Rs 579 crore, which the high court had, in 2017, asked the airline to deposit under the 2018 arbitration award in the share-transfer dispute.

The high court had granted six weeks to SpiceJet to make the payment and the deadline for the same, according to a Sept. 2 order, expired on Oct. 14, 2020.

After this, Maran and his firm had moved the high court for attachment of the entire shareholding of Singh in Spicejet and taking over the management for the non-payment of Rs 243 crore. The top court had taken note of Spicejet's appeal and passed the interim order, staying the high court order.

Maran and Kal Airways had moved the high court over the share-transfer dispute with SpiceJet, demanding that 18 crore warrants redeemable as equity shares be transferred to them. On July 29, 2016, the high court asked both parties to settle the dispute under arbitration. It had directed SpiceJet and Singh to deposit Rs 579 crore in the high court's registry.

SpiceJet was permitted to furnish a bank guarantee for Rs 329 crore and make a cash deposit of the remaining sum of Rs 250 crore by the high court. The apex court, in July 2017, dismissed SpiceJet's appeal against the high court order. On July 20, 2018, the arbitral tribunal rejected Maran's claim of damages of Rs 1,323 crore for not issuing the warrants to him and Kal Airways but had awarded him a refund of Rs 579 crore plus interest.    

Maran, the owner of Sun TV Network, then moved to the high court against the arbitration award. The matter pertained to a dispute arising out of the non-issuance of warrants in favour of Maran after the transfer of ownership to Singh, the controlling shareholder of SpiceJet.    

The dispute started after Singh took back control of SpiceJet in February 2015 amid the airline facing a financial crisis. Maran and Kal Airways had transferred their entire 35.04 crore equity shares in SpiceJet, amounting to a 58.46% stake in the airline, to its co-founder Singh in February 2015 for just Rs 2.