The Bombay High Court has suggested that Jet Airways and Sahara India Commercial Corporation(SICCL) should settle their dispute by way of discussions even as it adjourned the ongoing tax case to June 12, 2009, following the court’s reopening after the summer recess.
Based on the submissions filed with this court on May 7, 2009, and hearing on May 8, the case has now been posted to June 12, 2009, Justice D Y Chandrachud said in his short order.
The court, which closes today for the summer vacation, will reopen on June 8, 2009.
The judge suggested that “the parties make an earnest effort to attain a resolution on the dispute during the summer recess”, and inform the court when it resumes hearing on June 12, 2009. The companies efforts for an out-of-the-court settlement had come to a nought on Wednesday.
“In case of the parties not reaching a settlement by that date, the court will proceed with the matter as per the submissions and the ongoing arguments,” he added.
“The court is making an endeavour to make sure that the parties resolve the case outside the court,” Jet Airways counsel Janak Dwarakadas said.
The counsels of both Jet Airways and Sahara informed the court that they would be meeting on May 12 to iron out the issues. The companies will also move the holiday court, in case of arriving at a conclusion, he added.
The Jet Airways counsel also informed the court that the original acquisition agreement between the companies was for Rs 2,000 crore. Later, the companies had agreed to settle it for Rs 1,450 crore of which Rs 1,283 crore has already been paid.
Jet, which has plans to lease out one more aircraft, informed the court of its intentions and said it expected Sahara to have no issue in this matter.
Jet bought Sahara Airlines from the Sahara Group in April 2007 for Rs 1,450 crore. It paid Rs 900 crore and agreed to pay the balance in four instalments. The Income-Tax department had however demanded dues of Rs 107 crore from Sahara Airlines after Jet took over the company. According to Jet, this amount was due from Sahara Group as it pertained to the period before the acquisition.
While paying Sahara the installment of Rs 137 crore last March, Jet deducted Rs 37 crore against the IT dues. This year too, Jet deducted Rs 50 crore on the same account. Jet said that Sahara has now taken a stand that it is not liable to pay the I-T dues.
Sahara however has argued that the company cannot deduct from the agreed amount of installment which is enshrined in the share purchase agreement. It also pulled up Jet for not paying the second installment on time and said that they are withdrawing the concession of Rs 550 crore given to Jet on condition that they pay on time. They have now demanded that this extra amount has to be paid by Jet.
Earlier, Sahara had secured order from the High Court to attach the movable properties of Jet Airways. However, Jet moved the court to stay the order. The court stopped further attachment, but said that the properties already attached would remain unaffected.
