SpiceJet informed the Delhi High Court that due to the bank holidays on September 9 and 10, it will not be able to meet this deadline. Low-cost airline SpiceJet announced on Tuesday that it had finished paying Sun Group chairman Kalanithi Maran 100 crore as instructed by the Delhi High Court over the execution of an arbitration judgement.
SpiceJet had given Maran a check for 37.5 crore on Monday in court. However, Maran’s legal representative had rejected it and asked SpiceJet to conduct a bank transfer instead. The insolvent airline later said in a statement that it has paid a payment of 77.5 crore and promised to make the final payment on Tuesday.
The Delhi High Court had ordered the airline to pay Maran 100 crore by September 10 in order to satisfy its order from August 24.
SpiceJet had informed the court on Monday that the bank holidays on September 9 and 10 prevented it from meeting the payment deadline.
The remaining payment dispute involving SpiceJet and Maran, for which SpiceJet owes 397 crore, will be heard in court on October 3.
The Maran side had argued that SpiceJet had forfeited its right to a judicial hearing in this arbitration award execution issue by wilfully disregarding directives. If the debt is not paid, they asked the court to seize SpiceJet’s total profit of 204 crore rupees in addition to any future earnings.
In response, SpiceJet said that the Marans wouldn’t gain since they would become operational creditors if they demanded immediate payment, which may cause the airline to go bankrupt. SpiceJet also disclosed that its financial issues were caused by a number of circumstances, such as the purchase of Boeing 737 Max aircraft that were prohibited from flying by authorities, losses from the COVID-19 outbreak, and elevated fuel prices as a result of the crisis in the Ukraine.
The Delhi High Court ordered the low-cost carrier and its owner, Ajay Singh, to reimburse Kalanithi Maran, the airline’s former promoter, for the sum of 579 crore plus interest in its ruling on July 31. The Delhi High Court affirmed the arbitration verdict. When SpiceJet experienced financial difficulties in 2015, Maran surrendered his ownership to Ajay Singh.
In accordance with the agreement, Singh assumed SpiceJet’s liabilities totaling Rs. 1,500 crore. Maran then filed a lawsuit, claiming that neither convertible warrants nor preferred shares had been issued, and that the money had not been returned. The high court directed SpiceJet to deposit 243 crore as interest payment in 2020 after an arbitration tribunal awarded Maran a refund of 579 crore plus interest in 2018.
Citadel versus SpiceJet
Since 2015, a legal dispute between SpiceJet and investment bank Credit Suisse has been going on over unpaid fees totaling over $24 million. The Madras High Court ultimately decided to abolish the airline in 2021 as a result of this disagreement.
The apex court temporarily halted the winding-up decision, allowing the parties to negotiate a resolution.
The Supreme Court ruled on Monday that SpiceJet must pay a Credit Suisse installment of $500,000 by September 22 and an additional $1 million for a defaulted sum. The airline was also threatened with “drastic action” if the payment wasn’t made by the apex court.