Supreme Court Asks SpiceJet & Kal Airways To Reconsider Settling Share Transfer Dispute

The Supreme Court on Thursday asked SpiceJet and Kal Airways to consider settling the share transfer dispute between SpiceJet and its former promoter Kalanithi Maran, and his firm Kal Airways. A Bench headed by CJI Ramana asked SpiceJet to consider Kal Airways' proposal and pay the amount of interest it owes to Kal Airways. The Bench asked both Senior Advocate Mukul Rohatgi appearing for SpiceJet and Senior Advocate Dushyant Dave appearing for Kal Airways to talk to each other and their clients and reach a settlement. During the hearing, Senior Advocate Mukul Rohatgi appearing for SpiceJet reiterated his earlier offer, that SpiceJet is proposing a final settlement, where entire amount of 300 crores can be paid to the respondents. This amount of 300 crores will be in addition to the 308 crores already paid by Spice Jet. Further, a sum of 100 crores can be released from the bank guarantee of 270 crores deposited before the Delhi High Court and the proceedings of the Section 34 petition before Single Judge can be ordered to be heard. Senior Advocate Dushyant Dave appearing for Kal Airways however did not agree with the offer. He later proposed that SpiceJet may pay some amount out of the interest that it owes to the respondent now and the remaining amount may be paid in the next three years, at the rate of interest decided by the Court. Mr Rohatgi at the outset explained the dispute between the parties. He submitted that "The matter started award in 2016 where court directed deposit of 579 crores in cash. This was modified by division bench to 250 in cash and 359 in bank guarantee. The Tribunal delivered an award against me for 579 crores which single judge had ordered. It added pre award and post award interest which was a high figure and a high rate and is a major part of the dispute" He added that when the first execution was filed 250 crores were released to other side and 58 crores were released in the second execution. He added that an amount of 308 crores which has already been paid is lying in cash with other side, and there's a bank guarantee of 270 crores in the High Court. "The next date of hearing in High Court of the 34 petition is 19th April. The current SLP is against third execution, you can't have an execution everyday!", Mr Rohatgi said. Mr Rohatgi submitted that the SpiceJet airline was given to his client for 2 rupees as it had huge debts of 2000 crores and to incentivise his client to buy the airlines he was given 300 odd crores. "I've been running this airlines for last years and I'm trying to settle this. The pandemic has finished my business in two years. I persuaded the client to settle the winding up," Mr Rohatgi said. The Bench then asked Mr Dave's response to Mr Rohatgi's offer of settlement. Mr Dave submitted that there are two different figures of 308 crores and 270 crores involved in the case with 308 crores released to the respondent and 270 crores being in a bank guarantee. However according to Mr Dave this amount was given by the respondent to SpiceJet in the first place, hence it is the respondent's money which is coming back to the respondent . "The Question is if on that money, the interest is payable or not. The Act says the amount shall carry interest at rate of 2% above the bank rate" Mr Dave said. The Bench however observed that if it directs the payment of interest to the respondent, nothing will remain to be adjudicated in the Section 34 petition before the High Court. "If he gives 300 crore interest above 600 crores there's no difficulty. 600 is the principal amount," Mr Dave said. "What will remain in 34 if everything is paid," Mr Rohatgi remarked. The Bench then asked Mr Rohatgi to consider paying some amount of interest and finish the dispute. While reiterating that their approach is to settle the dispute, Mr Rohatgi agreed to get instructions from his client in this regard. On last occasion, the Supreme Court was informed by Kal Airways that it has refused to accept SpiceJet's following offer for full settlement of the share transfer dispute: Spicejet will give 300 Crores, but there will be final settlement of the dispute and there would be no further litigation. Or Out of the Bank Guarantee of 270 Crores deposited by Spicejet with the High Court it will give 100 Crore and the Court may pass direction regarding expeditious hearing of the Section 34 petitions pending before the Delhi High Court. Senior Advocate Maninder Singh appearing for Kal Airways had informed the Bench that after considering SpiceJet's offer they have decided to not accept it as the total amount owed by them is more than 920 crores. Senior Advocate Mukul Rohatgi for SpiceJet had submitted that the court may hear the case in two weeks or direct the High Court to hear the Section 34 petition expeditiously. The Bench was hearing an application filed by...

Supreme Court Asks SpiceJet & Kal Airways To Reconsider Settling Share Transfer Dispute

Srishti Ojha

This is a premium content
Available exclusively to
Our subscribers

INR 1099+GST

Tags

Srishti Ojha

Supreme Court Asks SpiceJet & Kal Airways To Reconsider Settling Share Transfer Dispute

Srishti Ojha

This is a premium content Available exclusively to Our subscribers

INR 1099+GST

Tags

Srishti Ojha

This is a premium content
Available exclusively to
Our subscribers