Supreme Court dismisses Maran, KAL Airways plea seeking ₹1,323 crore from SpiceJet

A bench of Justices P S Narasimha and Atul S Chandurkar refused to interfere with the high court’s May 23 decision, which had dismissed their appeals on the grounds of delay.

Maran and KAL Airways were seeking compensation exceeding ₹1,300 crore, including ₹679 crore allegedly paid for warrants and preference shares that they said were never issued after they transferred their stake in SpiceJet back to its founder, Ajay Singh, in 2015.

Their damages claim was earlier rejected by a three-member arbitral tribunal comprising retired Supreme Court judges, and subsequently upheld by a single-judge bench and a division bench of the high court.

Following the Supreme Court’s decision, shares of SpiceJet rose more than 3% to ₹39.49 in early trade on the BSE.

The dispute dates back to 2015, when Maran and KAL Airways transferred their 58.46% stake in SpiceJet to Ajay Singh, along with assuming a debt liability of ₹1,500 crore, as the carrier struggled with severe financial difficulties.

As part of the share transfer agreement, Maran and KAL Airways claimed they had paid ₹679 crore to SpiceJet for the issuance of convertible warrants and preference shares.

However, they later alleged that these securities were never issued, prompting them to seek ₹1,323 crore in damages.

In 2017, Maran approached the Delhi High Court, which referred the matter to arbitration.

A panel of three retired Supreme Court judges, appointed as arbitrators, rejected the damages claim in July 2018 but ordered SpiceJet to refund ₹579 crore plus interest.

The award included directions for SpiceJet to pay ₹308 crore in cash with 12% annual interest for 30 months and to return ₹270 crore through compulsory redeemable preference shares or cash, with any failure attracting 18% interest.

Both parties challenged parts of the arbitral award in the Delhi High Court. Maran also moved for its execution after SpiceJet delayed payments, citing a Supreme Court stay granted in 2020. The stay remained in force for over two years before being lifted in February 2023, when the court directed SpiceJet to pay ₹75 crore within three months and allowed Maran to encash a ₹250 crore bank guarantee.

SpiceJet’s subsequent plea for more time was rejected in July 2023.

In July 2024, a single judge of the Delhi High Court upheld the arbitral award, dismissing objections from both sides.

SpiceJet’s appeal against this decision was also dismissed by a division bench in August last year, allowing execution proceedings to continue. The airline was later directed to pay an additional ₹100 crore to Maran.