Updated May 22nd, 2024 at 14:09 IST

SpiceJet to seek refund of Rs 450 crore from Kalanithi Maran

The court ruling overturns a single-judge bench, giving SpiceJet right to reclaim a significant portion of the funds.

Reported by: Business Desk
SpiceJet | Image:Republic
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Respite for cash-strapped airline: Low-cost carrier SpiceJet and its promoter Ajay Singh received some respite in the share transfer dispute with former promoter Kalanithi Maran and his firm, KAL Airways as Delhi High Court has asked SpiceJet to seek refund of Rs 450 crore from Maran, said a company statement. 
Following the court's order on May 17, SpiceJet is poised to seek a refund of Rs 450 crore out of the INR 730 crore previously paid to Maran and KAL Airways,” the statement added. The court ruling overturns a prior decision by a single-judge bench, giving SpiceJet the right to reclaim a significant portion of the funds based on legal counsel, the statement added. 

Much-needed funds 

The airline had paid a total of Rs 730 crore, which included Rs 580 crore in principal and an additional Rs 150 crore as interest, to Maran and KAL Airways. With the recent decision, SpiceJet is set to receive a refund of Rs 450 crore.
The appeals lodged by SpiceJet and Ajay Singh contested several key aspects of the previous order, particularly concerning the award of the refund and the justification for the interest charges, the statement further added. “The Division Bench found substantial merit in these appeals, highlighting that these issues were inadequately addressed in the prior judgment dated July 31, 2023,” it said. 
The court ruled that the Single Judge had erred in dismissing the Section 34 petitions filed by Ajay Singh and SpiceJet, failing to duly consider claims of patent illegality and the unjust refund order against SpiceJet, despite acknowledged breaches by KAL Airways and Kalanithi Maran.
Besides, the court noted that penal interest had been charged despite SpiceJet not being in breach of the Share Purchase Agreement. Given these oversights, the appeals by Ajay Singh and SpiceJet have been upheld, and the previous judgment from July 31, 2023, has been annulled, it added. 

 

 

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Published May 22nd, 2024 at 14:09 IST