SpiceJet Chairman and Managing Director, Ajay Singh, has been summoned for the third time by Delhi High Court. The Court has asked the Chairman to appear in person during the next court proceedings scheduled in February month.
SpiceJet MD Summoned by Delhi High Court
Delhi High Court, for the third time, has asked SpiceJet Managing Director Ajay Singh to appear in person. He has been summoned under the ongoing dispute between SpiceJet and its former promoter, Kalanithi Maran. The dispute is over the dues the airline owes to Maran.
The dispute between Kalanithi Maran and SpiceJet has been delayed since September 2023 because of many changes in the bench hearing the case. Since its inception, the case has been unfolded in front of three different benches. In February as well, a new bench will hear the case. In the February month hearing, Ajay Singh is expected to be present in court.
Kalanithi Maran has claimed that SpiceJet and its current promoter Ajay Singh owe Rs 440 crore to him in the interest of an arbitral award. SpiceJet claims that it paid an amount of Rs 100 crore to Maran in August 2023. It admitted in court that it has to pay Rs 194 crore more to Maran. Furthermore, it has challenged the arbitration. If it is successful, SpiceJet also expects reimbursement of Rs 400 crore from Maran.
SpiceJet vs Maran: The Start
The inception of this conflict dates way back to 2015. Kalanithi Maran and his Special Purpose Vehicle company – KAL Airways, which handled SpiceJet, sold the entire stake to Ajay Singh, the current promoter of SpiceJet. Singh acquired this stake for just Rs 2 and took on the airline’s debt of around Rs 1,500 crore. You might be wondering why Maran sold the airline for pennies.
Maran was expecting the issuance of share warrants and preferential shares. He invested Rs 679 crore in SpiceJet to acquire these shares and warrants. The root of the problem lies here: These shares were never issued by SpiceJet. Since then, Maran filed a case demanding the airline to return the money. In August 2023, after a warning, SpiceJet paid an amount of Rs 100 crore to Maran.
Tackled in Legal Battles
The airline has admitted in court that it is struggling to stay afloat. The counsel representing SpiceJet said that if it pays all dues to creditors, it will go bankrupt and that will not be beneficial for any stakeholder. The airline has blamed the Boeing 737 MAX grounding, high fuel costs, and the Russia-Ukraine conflict for this condition.
Consistently, more and more lessors and service providers are complaining about the airline demanding their remaining dues. The latest example is the petition filed by Alterna Aircraft BV Limited. Alterna has filed a petition in the Delhi High Court demanding $11.4 million from SpiceJet.
In early 2023, SpiceJet lost a court case against Alterna Aircraft BV Limited in the High Court of England & Wales. The court awarded the lessor with arbitration of $11.4 million in two different cases. Alterna has now reached the Delhi High Court to execute this award.