Supreme Court pulls up SpiceJet, asks to pay entire arbitral amount to Kalanithi Maran

In a jolt to low-cost airlines SpiceJet, the Supreme Court on Friday refused to extend the time for making payment to media baron Kalanidhi Maran and his Kal Airways in pursuance of an arbitral award of Rs 578 crore related to a share-transfer dispute, saying these are "luxury" litigations.

While refusing to extend the time, the Delhi High Court had on June 1 directed SpiceJet to deposit "forthwith" Rs 75 crore that has to be paid to Maran and his Kal Airways towards interest on the arbitral award.

Prior to this, the top court had ordered that the bank guarantee of Rs 270 crore furnished by SpiceJet to Maran and his firm must be encashed immediately if the airlines failed to pay Rs 75 crore towards interest on the arbitral award by May 13.

The bench of Chief Justice of India DY Chandrachud and Justice PS Narasimha pulled up SpiceJet for filing the application.

The top court said that it will not grant any extension to SpiceJet as commercial morale must be upheld.

The top court while dismissing the plea observed that the present application is nothing but a delay tactic of SpiceJet to not pay money even when there are court orders directing the same.

The apex court had in February directed the SpiceJet to pay Rs 75 crore to the decree holders i.e., Kal Airways and Kalanithi Maran within a period of 3 months towards its interest liability under the arbitral award. 

The Supreme Court had also made it clear in its order that in the event of failure by SpiceJet to pay, the entire award would become executable in entirety in favour of Kal Airways and Kalanithi Maran. 

In this regard, pleas were moved by SpiceJet seeking extension of time for two more months as the three-month time period had expired on May 13, 2023 and SpiceJet failed in honoring the Supreme Court’s Order.

During the hearing at the top court today, Senior Advocate Mukul Rohatgi, Senior Advocate Malak Manish Bhat appeared for SpiceJet and Senior Advocate Maninder Singh appeared for the Kal Airways Pvt Ltd and Kalanithi Maran.

When the matter was taken up Singh submitted that SpiceJet is not honoring the orders passed by any of the courts. SpiceJet had earlier failed to comply with the order passed by the High Court of Delhi dated November 4, 2020 directing the SpiceJet to file its affidavit of disclosure of its assets and the same is not filed till date. SpiceJet is also not even complying with the order of the  Supreme Court, Singh added. 

Rohatgi requested the Supreme Court for the matter to be listed after 3-4 days to present its case and work out the way to resolve the matter as the SpiceJet is facing financial issues.

To this, the bench observed that the SpiceJet is not obeying the orders of the courts and the arguments taken in application seeking extension of time are unreasonable with sole purpose to delay the execution of award and avoid payment of the arbitral amount despite the orders of the apex court. 

Following the same, the Supreme Court further observed that a clear message needs to be sent across that the orders of this Hon’ble Court ought to be followed, especially in commercial matters.

Supreme Court dismissed the application filed by SpiceJet and directed the award to be executed fully.

(With PTI inputs)