Indian budget airline SpiceJet told a court on Thursday it was “struggling to stay afloat” as it was ordered to make a payment to its former owner over money owed.
In 2018, SpiceJet lost an arbitration case arising out of share transfers from former owner Kalanithi Maran to the company’s new management in 2015, making the airline liable to pay Rs 583 crore plus interest.
In a Delhi High Court hearing on Thursday on Maran’s case demanding the dues, SpiceJet said it was struggling financially.
“We are struggling to stay afloat,” the airline’s lawyer Amit Sibal told the judge.
The Delhi High Court refused to stay a single judge order upholding the arbitral award.
SpiceJet offered to deposit Rs 75 crore within 10 days, but the judge ordered the airline to pay Rs 100 crore by September 10 and warned it could consider seizing the company’s assets to recover the dues, if it fails to comply.
SpiceJet said in a statement it would honour the court order and “make the specified payment within the prescribed timeframe”.
The order comes days after the Supreme Court, in a separate case, asked SpiceJet’s managing director Ajay Singh to appear in court and defend allegations by Credit Suisse claiming certain unpaid dues.
Both the Delhi High Court case and the Supreme Court case will next be heard on September 11.
A division bench of Justices Yashwant Verma and Dharmesh Sharma on Thursday issued notice and sought response of Maran and his company Kal Airways on an appeal filed by Singh and SpiceJet challenging the single judge’s July 31 order.
On July 31, the single judge had upheld the award announced by the arbitration tribunal on July 20, 2018 in favour of Maran and his company Kal Airways.
Singh had approached the single judge bench of the high court challenging the arbitral award.
The case dates to January 2015, when Singh, who owned the airline earlier, bought it back from Maran after it was grounded for months due to resource crunch.
While the tribunal had asked Maran to pay Singh and the airline Rs 29 crore in penal interest, Singh was asked to refund Rs 579 crore plus interest to Maran.
The arbitral tribunal was created in 2016 on the orders of the Delhi High Court to adjudicate the share transfer dispute. It had held that there was no breach of a share sale and purchase agreement reached between Maran and current promoter Singh in late January 2015.
