Supreme Court Tightens Noose on SpiceJet, Upholds ₹144.51 Crore Deposit Order in Maran Dispute

India’s prolonged aviation corporate battle between SpiceJet and its former promoter Kalanithi Maran escalated on Friday, with the Supreme Court declining to stall enforcement of a ₹144.51 crore payment order and warning against further litigation delays.

A bench of Justices P.S. Narasimha and Alok Aradhe refused to interfere with a 19 January ruling of the Delhi High Court that directed the airline and its promoter, Ajay Singh, to deposit ₹144.51 crore within six weeks. The court also imposed a cost of ₹1 lakh, remarking that the dispute had already seen “tons and tons” of litigation and indicating that costs could rise to ₹2 lakh if similar pleas persisted.

The immediate consequence: SpiceJet must arrange ₹144.51 crore in fresh deposits within the stipulated timeline

The ₹194.51 Crore Admission and Court’s Position

The Delhi High Court had earlier recorded that SpiceJet acknowledged ₹194.51 crore as payable under prior Supreme Court directions. After adjusting ₹50 crore already deposited, the remaining outstanding amount stood at ₹144.51 crore.

The high court observed that the Supreme Court had issued compliance directions in February 2023 and July 2023 with defined timelines. It rejected arguments that payment enforcement should wait until challenges to the arbitral award are finally decided, holding that apex court directions cannot be suspended indefinitely.

Referring to Article 144 of the Constitution, which requires all authorities to act in aid of the Supreme Court, the high court emphasized that judicial orders must be implemented irrespective of pending appeals.

By declining relief, the Supreme Court has effectively reinforced that position.

From ₹679 Crore Infusion to ₹579 Crore Award

The roots of the dispute trace back to January 2015. At the time, SpiceJet was facing acute financial distress when Kalanithi Maran and KAL Airways Pvt. Ltd transferred their 58.46% stake to Ajay Singh under a share sale agreement.

As part of that transition, Maran and KAL Airways infused approximately ₹679 crore into the airline via convertible warrants and preference shares. Maran later alleged that these instruments were not issued as agreed and sought a refund, along with damages.

The matter moved to arbitration before a three-member tribunal of retired Supreme Court judges.

In July 2018, the tribunal:

• Rejected Maran’s ₹1,323 crore damages claim
• Directed SpiceJet to refund ₹579 crore
• Ordered payment of interest on the amount

Subsequent court proceedings focused on enforcement and interim payments.

In February 2023, the Supreme Court ordered encashment of a ₹270 crore bank guarantee. It also directed SpiceJet to pay ₹75 crore toward interest, cautioning that failure to comply would make the arbitral award executable.

Multiple enforcement petitions, appeals, and compliance disputes followed, prolonging the litigation cycle.

Financial Implications for the Airline

The ₹144.51 crore deposit, while part of a larger arbitration matrix, adds to the ongoing financial strain at SpiceJet. The airline has, in recent years, faced liquidity challenges, aircraft groundings due to unpaid dues, and insolvency petitions from certain lessors and operational creditors.

The total monetary trail in the case now includes:

• ₹679 crore initial infusion
• ₹579 crore arbitral refund order
• ₹1,323 crore damages claim (rejected)
• ₹270 crore bank guarantee encashed
• ₹75 crore interest payment direction
• ₹194.51 crore acknowledged payable
• ₹144.51 crore current deposit directive
• ₹1 lakh cost imposed by the Supreme Court

With the Supreme Court declining interim protection, the litigation shifts back to compliance and continuation of substantive challenges to the 2018 arbitral award.

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