Spicejet shares rise after firm seeks refund of ₹450 crore from Kalanithi Maran and his firm KAL Airways

Shares of Spicejet rose over 2% on Wednesday after the airline stated in an exchange filing it is seeking a refund of ₹450 crore from Kalanithi Maran and his firm KAL Airways. The development comes after the Delhi High Court’s division bench ruled in favour of SpiceJet and Ajay Singh in the share transfer case against the former promoter.

Spicejet pointed out that in the filing, the court ruled in the firm’s favour on May 17 and this ruling overturns a previous decision by a single-judge bench, positioning SpiceJet to claim a substantial refund based on legal advice.

According to the firm, the appeal challenged several critical issues related to the award of a refund and the justification of interest in the case. The Division Bench found substantial merit in these challenges, noting that they were not adequately addressed in the previous order dated July 31, 2023, it said.

The firm further stated that in its ruling, the Division Bench held that the single judge had “erred in dismissing the Section 34 petitions of Ajay Singh and SpiceJet without due consideration of the claims of patent illegality and the order of refund passed against SpiceJet despite admitted breaches on the part of KAL Airways and Kalanithi Maran.”

Spicejet said the Court has also noted that interest amounting to penal interest had been charged despite SpiceJet not being in any breach of the share purchase agreement. “These facts not being considered by the single judge, the appeals of Ajay Singh and SpiceJet have been allowed, and the impugned judgment dated July 31, 2023, has been set aside,” it said.

The airline said it paid a total of ₹730 crore, comprising ₹580 crore in principal along with an additional ₹150 crore towards interest to Maran and KAL Airways. With the setting aside of the impugned order, SpiceJet said it is set to receive a refund of ₹450 crore.

Shares of the company gained nearly 3% since the beginning of the year. The stock has risen over 122% in the last one year.