KAL Airways and its owner, Kalanithi Maran, had moved the top court challenging Delhi High Court’s May order that dismissed their claim of Rs 1,323 crore in damages against low cost airline SpiceJet in a long-standing share transfer dispute.
In May, a division bench of the high court had come down heavily on KAL and Maran for the delay in filing their appeals, suppressing material facts related to their pending applications, and for unjustifiably delaying the proceedings.
It observed that Maran, a former promoter of SpiceJet, had engaged in a “calculated gamble” by delaying the filing and re-filing of their appeals. “The delay in refiling is completely lacking in bona fides and represents a gamble by the unsuccessful litigant (KAL Airways) keeping all, including the successful litigant (SpiceJet), in the dark,” the high court had said.
The high court also found KAL and Maran’s conduct to be lacking in bona fides, amounting to “fence sitting” and deliberate concealment.
“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 regarding the filing of the present FAOs, and of their languishing under objections,” the court said.On July 20, 2018, the arbitral tribunal had rejected Maran’s claim of damages of Rs 1,323 crore for not issuing warrants to him and KAL Airways but awarded him a refund of Rs 579 crore with interest.Both sides challenged the arbitral award and the petitions were dismissed by a single judge of the Delhi High Court in July 2023.
SpiceJet and its chairman, Ajay Singh, promptly appealed against the dismissal within the statutory 60-day period. Their appeals were heard and in May last year, the division bench found merit in SpiceJet’s contentions and remanded the matter back to the single judge for fresh consideration.
Following this, KAL Airways and Maran appealed to the single-judge bench seeking the same amount in damages, which was also rejected by the court. Even the appeals were filed after 55 days of delay and also failed to cure procedural defects for another 226 days.
The case relates to a share transfer dispute between SpiceJet chairman Ajay Singh and Maran and his KAL Airways. In February 2015, Maran and KAL Airways transferred their entire 58.46% stake in the airline to Singh. In 2017, Maran and KAL Airways moved the high court demanding that 180 million warrants redeemable as equity shares be transferred to them. The court, on July 29, 2016, asked both parties to settle the share transfer dispute under arbitration.
SpiceJet’s shares had eroded early losses and hit day’s high of 40.42. The shares were last trading 2.7% higher at Rs 39.12 apiece, while BSE Sensex was up 0.3%.
