New Delhi: Low-cost airline SpiceJet on Monday told the Delhi High Court about potential insolvency risks if compelled to pay an additional Rs 100 crore to former promoter Kalanithi Maran.
The airline proposed settling the dues through an equity issuance instead.
During the hearing on Monday, the court expressed skepticism over SpiceJet’s insolvency claims, highlighting that such pleas are common among debtors. The court also noted that Maran could not be compelled to accept shares as a settlement.
Meanwhile, the court also summoned the airline’s Chairman and Managing Director Ajay Singh to be present in the court on the next hearing.
This isn’t the first summons for Singh in this case, earlier he was asked to appear before the court in August this year.
The case, revolving around the enforcement of a 2018 arbitral award directing SpiceJet to pay Rs 578 crore plus interest to Maran and KAL Airways, has been adjourned to January 10.
The matter was initially with Justice Yogesh Khanna but has now been transferred to Justice Manoj Kumar Ohri. SpiceJet has contested the arbitral award in the high court’s division bench, leading to an ongoing legal dispute.
Maran claims Rs 440 crore in interest, while SpiceJet maintains it has paid Rs 100 crore following a court directive in August, owing only Rs 194 crore more.
Senior lawyer Amit Sibal, representing SpiceJet, emphasised the airline’s financial distress, citing operational losses, a negative net worth, and employee obligations that could lead to insolvency.
Sibal urged the court to withhold judgement until the division bench rules on the arbitration dispute.
The court raised questions about SpiceJet’s contingency plan should the division bench uphold the arbitral award. Sibal attributed the airline’s financial challenges to the grounding of Boeing 737 Max aircraft, pandemic impacts, and fuel cost spikes due to the Ukraine conflict.
