- Supreme Court dismissed SpiceJet and Ajay Singh's plea to overturn Rs 144.5 crore deposit order
- Delhi High Court directed SpiceJet to deposit Rs 144.5 crore in dispute with Kalanithi Maran
- Dispute stems from 2015 financial crisis and share sale agreement between SpiceJet and KAL Airways
The Supreme Court today dismissed a petition filed by SpiceJet Limited and its chairman Ajay Singh challenging a Delhi High Court order directing the airline to deposit Rs 144.5 crore in a long-running financial dispute with media baron Kalanithi Maran and KAL Airways Pvt Ltd.
A bench comprising Justices PS Narasimha and Alok Aradhe rejected the plea and imposed costs of Rs 1 lakh on Singh.
The ruling marks the latest chapter in a corporate dispute that has spanned more than a decade, tracing its origins to the near-collapse of SpiceJet in 2014-15 and the emergency financial restructuring that followed.
The case dates back to January 2015, when SpiceJet was facing a severe financial crisis that threatened to ground operations. At the time, Kalanithi Maran and KAL Airways were the promoters and majority shareholders, holding a combined 58.46% stake in the airline.
To rescue the carrier, the parties entered into a Share Sale and Purchase Agreement (SSPA) under which Maran and KAL Airways agreed to transfer their entire shareholding to Ajay Singh for a nominal consideration of Rs 2.
The agreement involved the issuance of warrants and cumulative redeemable preference shares (CRPS), with an overall funding commitment estimated at approximately Rs 450 crore.
However, disputes later emerged over whether both sides had fulfilled their respective obligations under the SSPA, ultimately leading to arbitration proceedings.
In July 2018, a three-member arbitral tribunal ruled in favour of Mr Maran and KAL Airways, directing SpiceJet and Mr Singh to refund Rs 308.21 crore along with interest at 12% per annum from November 2015.
Both sides challenged aspects of the award under Section 34 of the Arbitration and Conciliation Act, 1996, while enforcement proceedings began simultaneously.
What followed was a complex series of legal battles across multiple forums, including repeated hearings before the Delhi High Court and the Supreme Court.
During interim proceedings, the High Court initially directed SpiceJet to deposit Rs 579 crore. This requirement was later modified on appeal to allow a combination of a Rs 329 crore bank guarantee and a Rs 250 crore cash deposit.
In 2019, Rs 250 crore was released to the decree holders. A further Rs 58.21 crore was paid through the bank guarantee.
The dispute intensified in February 2023, when the Supreme Court ordered the encashment of the bank guarantee and directed SpiceJet and Singh to pay Rs 75 crore towards interest within three months.
The court warned that failure to comply would render the arbitral award executable in its entirety.
When the airline sought more time, the court refused in July 2023, holding that non-compliance meant the award had become fully executable.
In January this year, the Delhi High Court considered fresh applications from SpiceJet and Mr Singh seeking a stay on the award.
The High Court noted that earlier Supreme Court directions had not been complied with. It relied on Article 144 of the Constitution, which requires all authorities to act in aid of the Supreme Court.
The court also recorded that the judgment debtors themselves had admitted in previous proceedings that Rs 194.51 crore remained payable towards interest. Of this amount, Rs 50 crore had already been deposited, leaving a balance liability that formed the basis of the Rs 144.5 crore deposit direction.
Challenging that order, SpiceJet and Singh approached the Supreme Court once again.
On Friday, the bench dismissed the plea, effectively upholding the High Court's direction to deposit Rs 144.5 crore.
