SpiceJet: Division bench orders Ajay Singh to pay Rs 100 cr to Maran

Kalanithi Maran claims that SpiceJet owes him Rs 393 crore as of August 3

Delhi High Court on Thursday ordered SpiceJet chairman and managing director (CMD) Ajay Singh to pay Rs 100 crore to Kalanithi Maran by September 10, according to a report by Money Control. The failure to do so may result in the CMD's arrest, the Court said.

Singh has been summoned to the Court after Maran filed an application stating that despite being asked to do so, SpiceJet had not filed an affidavit of assets and liabilities in 2020.

Maran claims that the budget airlines owes him Rs 393 crore as of August 3 and had sought that 50 per cent of the airline's daily revenues go towards this payment. The Court issued a notice for the same.

 

This comes after the Supreme Court held the 2018 arbitration award.

According to the arbitral award, SpiceJet was ordered to pay Rs 308 crore in cash and a 12 per cent interest for 30 months. An additional Rs 270 crore in either compulsory redeemable preference shares or by the return of money in terms of a share purchase agreement had to be paid.

The Court had added that failure of payment within the set timeline would entitle Maran to an interest rate of 18 per cent.

However, this payment was not made.

In February, the Supreme Court had directed SpiceJet to pay Rs 75 crore towards interest accrued within three months. Following this, Singh filed an application seeking an extension on the payment.

However, on July 7, the top Court dismissed this application and ordered the airline to pay the entire arbitral award of Rs 380 crore (including the interest) to the former promoter. The Court had made it clear that if SpiceJet failed to make the Rs 75 crore payment in the given timeframe, the airline would be required to pay the entire payment of the 2018 arbitration award.

"If orders are not complied with, consequences must follow. That's the only way to ensure commercial morality," the Court said.

The order was further upheld by a single judge of the Delhi High Court on July 31, but it is now under challenge before a division bench of HC.

The next hearing is scheduled for September 11.