Delhi high court gives SpiceJet four weeks to deposit ₹144.5 crore, rejects title deed offer

The Delhi High Court on Wednesday rejected SpiceJet’s proposal to furnish an immovable property as security in place of depositing ₹144.51 crore in its dispute with former promoter Kalanithi Maran and KAL Airways Pvt Ltd.

A bench of Justice Subramonium Prasad, however, granted the low-cost carrier four weeks to deposit the amount, providing limited relief even as it rejected the alternative arrangement suggested by the airline.

During the hearing on Tuesday, the low-cost carrier told the high court that it was unable to comply with the earlier direction to deposit the amount within six weeks.

The airline submitted that nearly 40% of its flights to Gulf destinations have been cancelled due to the ongoing conflict in the Middle East, impacting revenues and aggravating its cash flow position.

“We are not in financial distress — I’m not saying that. But we do have a liquidity issue,” Sibal submitted, while seeking relaxation of the earlier order that required the amount to be deposited within six weeks.

In a bid to secure relief, SpiceJet and its chairman Ajay Singh had offered to place an immovable property valued at around ₹148 crore before the court as security in lieu of an upfront cash deposit.

“We have unencumbered security and we have based the valuation on that of a registered valuer. I have the original title deeds with me. This was originally encumbered, but it was released to me, and therefore I have the original title deeds and can deposit them with the registry,” Sibal submitted.

The fresh application follows the Supreme Court’s refusal last month to interfere with the high court’s January 19 order directing payment of ₹144.51 crore.

The apex court had also imposed a cost of ₹1 lakh each on the airline and Singh for prolonging the litigation.

The dispute relates to a 2015 share transfer agreement under which Maran and KAL Airways transferred their 58.46% stake in SpiceJet to Ajay Singh.

The high court has earlier noted that SpiceJet had not fully adhered to the Supreme Court’s 2023 directions on settling the dues arising out of the arbitration award.

As per submissions recorded in court, the airline has acknowledged a total liability of ₹194.51 crore. After adjusting ₹50 crore already deposited, the remaining ₹144.51 crore is yet to be paid.