SpiceJet (SG, Delhi International) has secured a legal victory after the Delhi High Court dismissed an appeal by former backer Kalanithi Maran and his investment vehicle KAL Airways, in which he sought damages of INR13.23 billion rupees (USD155 million). Court records show the matter was disposed of on May 23.
The dispute stems back to a 2015 share transfer between Maran and the current SpiceJet promoter and majority shareholder, Ajay Singh. Under the agreement, Singh acquired a 58.46% shareholding in SpiceJet plus INR6.79 billion (USD79.5 million) in investment funds in return for redeemable warrants and preference shares. Neither the warrants nor shares ever materialised. Maran and his investment vehicle began litigating the matter the following year, and it has been cropping up regularly in the high court and India's Supreme Court ever since.
Last year, Maran said he would appeal a previous single-judge Delhi High Court decision and an arbitration review by three retired Supreme Court judges that rejected his claim, which was based not only on the initial amount lent but also damages, compounding interest, and costs. However, the most recent high court decision was critical of Maran's management of the case.
"The case presents a classic example of fence-sitting, keeping, in the process, the respondents [Spicejet], the division bench of this court, as well as the Supreme Court, completely in the dark," the Economic Times reports the two judges as saying. Maran's many delaying tactics, they said, lacked bona fides and needed to be "sternly dealt with."
SpiceJet noted the decision in a May 26 Bombay Stock Exchange filing, saying Maran's claims had "been studied and thoroughly rejected."
Maran acquired majority ownership of SpiceJet in 2010 but sold out five years later. The airline was in considerable financial distress at the time. Singh paid INR2 (USD0.02) to take control of the carrier but also took on debts of INR15 billion (USD176 million). Maran has not indicated whether he will appeal last week's decision.
