Share Transfer Dispute: Kal Airways Turns Down SpiceJet's Settlement Proposal, Supreme Court To Hear On 2nd March

The Supreme Court was on Monday informed by Kal Airways that it has refused to accept to SpiceJet's offer for full settlement of the share transfer dispute between SpiceJet and its former promoter Kalanithi Maran, and his firm Kal Airways.

A bench comprising Chief Justice of India NV Ramana, Justice AS Bopanna and Justice Hima Kohli had on last occasion asked Kal Airways to consider and revert to the following proposal by SpiceJet:

* Spicejet will give 300 Crores, but there will be final settlement of the dispute and there would be no further litigation.

Or

* Out of the Bank Guarantee of 270 Crores deposited by Spicejet with the High Court it will give 100 Crore and the Court may pass direction regarding expeditious hearing of the Section 34 petitions pending before the Delhi High Court.

During the hearing today, Senior Advocate Maninder Singh appearing for Kal Airways informed the Bench that after considering SpiceJet's offer they have decided to not accept it as the total amount owed by them is more than 920 crores.

Senior Advocate Mukul Rohatgi for SpiceJet submitted that the court may hear the case in two weeks or direct the High Court to hear the Section 34 petition expeditiously.

The Bench therefore decided to hear the case on 2nd March 2022.

The Bench was hearing an application filed by KAL Airways seeking vacation of stay granted by Supreme Court on Delhi High Court's order directing SpiceJet to deposit Rs 243 crore in their dispute.

The application has been filed in SpiceJet's special leave petition challenging orders passed by the Delhi high court in 2020 in a share transfer dispute between Kalanithi Maran and the airlines.

The High Court through impugned orders had directed the airlines and its promoter, Ajay Singh, to deposit Rs 243 crore as interest payable on Rs 579 crore, which Delhi High Court had directed them to pay in 2017 under the 2018 arbitration award in the share transfer dispute.

The Court had directed SpiceJet Ltd to deposit the amount with court registry in the arbitration case with its former owner Kalanithi Maran and his company, KAL Airways.

The High Court in that order had also directed the airlines to make the payment within six weeks, failing which Maran was granted liberty to approach the court to seek status quo on SpiceJet's shareholding.

The amount of 243 crores is over and above the ₹579 crore that SpiceJet has already deposited with court.

The Delhi High Court had in 2017 directed SpiceJet to deposit Rs 579 crore in connection with the share transfer dispute. Justices S Ravindra Bhat and Yogesh Khanna dismissed SpiceJet's Ajay Singh's appeal against the July 2016 order of the single judge asking the budget carrier to deposit the amount.

The Division Bench, however, provided some relief to SpiceJet by allowing it to deposit Rs 579 crore in two tranches whereas the single judge had directed the same be deposited in 12 months time.

Singh had challenged the single judge order passed on a civil suit initiated by Sun Group chief Kalanithi Maran and his Kal Airways.

In their suit, Maran and his airline company had sought the issuance of stock warrants in SpiceJet to them as per a sale purchase agreement (SPA) of 2015 which had led to the transfer of ownership of the budget carrier to Ajay Singh.

Maran and Kal Airways had alleged that despite giving Rs 579 crore to SpiceJet, the carrier had failed to issue them the warrants or allot tranche one and two of Convertible Redeemable Preference Shares and that the amount was not utilised for paying statutory dues due to which they were also facing prosecution.

Case Title : SpiceJet Limited & Anr vs Kalanithi Maran, SpiceJet Limited & Anr vs Kal Airways , SLP (C) 12882-83/2020

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