Delhi HC overturns order directing SpiceJet to refund over ₹270 cr to Maran
A bench of justices Yashwant Varma and Ravinder Dudeja allowed the appeals of the airline and its chairman and managing director Ajay Singh challenging a single judge bench’s order
Budget airline SpiceJet got a major reprieve on Friday as a division bench of the Delhi high court overturned its previous ruling directing the airline to refund over ₹270 crore to its former promoter Kalanithi Maran of the Sun Group.
A bench of justices Yashwant Varma and Ravinder Dudeja allowed the appeals of the airline and its chairman and managing director Ajay Singh challenging a single judge bench’s order. “Appeals stand allowed. Consequently, July 31, 2023 order is set aside,” the court said.
Singh and the airline approached the division bench after the single judge on July 31 upheld an arbitral award asking SpiceJet to refund ₹270 crore to Kal Airways and Maran.
The single bench ruled that the award did not suffer from patent illegality, maintaining that the low-budget airline also failed to make a case for setting aside the award.
“There is nothing in the impugned Award to suggest that it suffers from patent illegality and the findings therein are perverse and will shock the conscience of this Court. In the instant case, the petitioners have not been able to prove that the impugned Arbitral Award is patently illegal, against [the] public policy of India or fundamental policy of law and thus have failed to make out a case for the award to be set aside,” the court ruled on July 31, 2023.
In 2018, the arbitral tribunal directed SpiceJet to refund ₹270 crore. Besides payment of refund, the tribunal also directed SpiceJet to pay interest of 12% per annum on the amounts paid towards warrants and 18% per annum on the sums awarded to Maran if the money transfer is delayed.
The dispute between Maran and SpiceJet dates back to 2015 when Singh bought SpiceJet back from Maran. Maran in 2015 transferred 58.46% of his stake in the airline to Singh for ₹2. The deal was supposed to get redeemable warrants in return for the money invested by him during his tenure as a promoter of the airline.
Maran was liable to get 18 crore warrants, which had translated to 26% shareholding in SpiceJet. But since he did not get his share of the money and neither convertible warrants nor preference shares, he approached the Delhi high court.
In his petition, Maran claimed that he suffered damages of over ₹1300 crore. The high court thereafter referred the dispute to arbitration.
