Kalanithi Maran can encash Rs 270 cr bank guarantee in SpiceJet dispute: SC

Court orders SpiceJet to deposit Rs 75 cr in drawn-out dispute over airline's acquisition

The Supreme Court on Monday allowed Sun TV promoter Kalanithi Maran to encash Rs 270 crore in bank guarantee deposited by SpiceJet in a seven-year-old dispute over the airline’s acquisition.

The court asked SpiceJet to deposit Rs 75 crore to secure the interest amount payable to Maran in connection with a 2018 arbitral award. The airline has three months to furnish the amount and it was allowed to approach the Delhi High Court (HC) seeking relief in interest payment.

The Supreme Court passed the order while hearing SpiceJet’s appeal against a 2020 Delhi HC ruling directing the airline to pay Rs 242 crore as interest to Maran.

Maran, in 2015, sold his 58.46 per cent stake in SpiceJet for a nominal purchase price of Rs 2. He approached the Delhi HC in 2016, claiming breach of agreement by the airline in not issuing him share warrants and preference shares despite fund infusion. The court next year ordered the airline to deposit Rs 579 crore and asked both sides to settle the matter via arbitration. In 2018, an arbitration tribunal awarded Maran Rs 579 crore plus interest.

Both sides appealed against the arbitration order; Maran also filed an application for enforcement. In September 2020, the Delhi HC ordered SpiceJet to pay Maran Rs 242 crore in interest. The airline moved the Supreme Court in November and secured a stay.

Senior advocate Mukul Rohatgi, who appeared for the airline on Monday, said his client is ready to settle the matter and pay interest at six per cent. Appearing for Maran, senior advocate Maninder Singh opposed the airline’s plea.

“After hearing the parties the apex court observed that SpiceJet has not secured the respondents (Maran) with interest which was awarded to him under the arbitral award. It directed the airline to deposit Rs 75 crore securing the interest amount. It passed further direction that the amount of Rs 270 crore deposited in form of bank guarantee be encashed immediately by respondents,” said Karanjawala & Co, Maran's lawyers.

SpiceJet said in a statement the overall amount in dispute is Rs 578 crore of which Rs 308 crore has been deposited.

“The remaining amount of Rs 270 crore is reserved with the company in cash against which a bank guarantee has been given. This amount of Rs 270 crore will be comfortably discharged as per the direction of the Hon’ble Supreme Court. Further, the additional amount of Rs 75 crore will be paid within the period of 3 months as per the directions of the SC. We hope this is a step towards achieving a final settlement in this matter,” the airline said.

The Dispute
 

The dispute dates back to 2015 when Kalanithi Maran sold his 58.46 per cent stake in SpiceJet for a nominal purchase price of Rs 2. In 2016, he approached the Delhi HC citing breach of agreement by the airline in not issuing him share warrants and preference shares. The HC in 2017 ordered SpiceJet to deposit Rs 579 crore and asked both sides to settle the matter via arbitration. In 2018, an arbitration tribunal awarded Maran Rs 579 crore plus interest.