SpiceJet’s former promoter Kalanithi Maran has filed a compensation plea before an arbitral tribunal seeking Rs 2000 crore from the budget carrier and its current promoter Ajay Singh for causing losses by failing to honour contractual obligations.
According to a report in The Economic Times, Maran may seek to explore restoration of his ownership in the low-cost airline headquartered in Gurugaon, if the compensation amount was not paid.
The compensation claim comes a week after the Delhi High Court directed SpiceJet to deposit Rs 579 crore in connection with a share transfer dispute with Maran. The HC had, however, provided some relief to the airline by allowing it to deposit the amount in two parts.
In its order, a bench of Justices S Ravindra Bhat and Yogesh Khanna observed that it was ‘essential’ to modify last year’s single judge order, which had directed that the entire amount be deposited in 12 months, due to the ‘unpredictable nature of likely injury that may be caused to the commercial operations of the company if entire amount is secured through a deposit’.
Modifying the order, the court said that part of the amount can be deposited by way of a bank guarantee and the remaining by cash and dismissed the plea of the airline and its co-founder Ajay Singh contesting the single judge's July last year order which had argued that the court did not have the jurisdiction in the matter. The bench had initially said that Rs 250 crore in cash and Rs 229 crore as bank guarantee should be deposited, which was Rs 100 crore short of the total amount of Rs 579 crore. The lawyers in the case pointed out the error in the calculation to the court staff. When the matter was raised before the judges, the bench said that ‘it will take care of it’.
The single judge's order had come on a civil suit by Maran and his investment company KAL Airways Pvt Ltd. In their suit, Maran and KAL Airways had sought 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. But despite giving Rs 579 crore to SpiceJet, Maran and KAL Airways alleged that 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.
Apart from ordering that the amount be deposited in the court, the single judge had also asked SpiceJet and Maran to appoint an arbitral tribunal to decide the share transfer dispute between them in a year. The amount was to be deposited in five instalments with the first one in August 2016, the court had said.
Market regulator SEBI had earlier expressed its inability before the single judge to approve the board resolution passed by SpiceJet for issue of warrants in favour of Maran and his KAL Airways. The board resolution was passed on the court's direction. Under the SPA, Maran and KAL Airways had transferred their entire 350,428,758 equity shares (58.46 per cent stake) in the airline to Ajay Singh.
According to the SPA, Maran and KAL were to receive the redeemable warrants in return for the amount they were to give to the airline towards operating costs and debt payment.
SpiceJet had earlier told the court that the change of ownership was effected as a rehabilitative measure to address the liability of Rs 2,000 crore incurred by the airline when it was under the management of Maran. It had also claimed that every penny had been utilised towards operations and discharge of liabilities.
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