SpiceJet To Seek ₹450 Cr Refund From Former Owner Kalanithi Maran After Delhi High Court Ruling; Shares Surge Over 2%

The Budget carrier, SpiceJet Limited on Wednesday announced through an exchange filing that the airline is planning to ask for a refund of Rs 450 crore from the Rs 730 crore it had paid to its former owner, Kalanithi Maran, and his company, KAL Airways. This decision by the airline come after a ruling by Delhi High Court on May 17.

The airline has paid a total of Rs 730 crore to Maran and KAL Airways, which included Rs 580 crore as the main account and an additional Rs 150 crores as an interest. With the setting aside of the impugned order, SpiceJet is now set to receive a refund of Rs 450 crores.

About the legal tussle

The legal tussle dates back to a dispute over share transfers, with SpiceJet having paid a total of Rs 730 Crores to Maran and KAL Airways, including principal and interest. However, the recent ruling by a Division Bench overturned a previous decision, paving the way for SpiceJet to claim a significant refund based on legal advice.

The appeal brought by SpiceJet and Ajay Singh challenged various aspects of the previous order, including the award of refund and the justification of interest.

"The Division Bench of the Delhi High Court ruled on May 17 in favour of SpiceJet and its promoter, Ajay Singh, in the long-standing share transfer case against former promoter Kalanithi Maran and his firm, KAL Airways," the company said in the regulatory filing.

"The Division Bench found substantial merit in these challenges, noting that they were not adequately addressed in the previous order dated July 31, 2023," added the filing.

The court held that the Single Judge had made errors in dismissing certain petitions without proper consideration of key issues. It noted breaches on the part of KAL Airways and Kalanithi Maran and pointed out that penal interest had been charged to SpiceJet despite it not being in breach of the Share Purchase Agreement.

As per the regulatory filing, "The Court has also noted that interest amounting to penal interest had been charged despite SpiceJet not being in any breach of the Share Purchase Agreement. These facts not being considered by the single judge, the appeals of Ajay Singh and SpiceJet have been allowed, and the impugned judgment dated July 31, 2023, has been set aside."

SpiceJet Shares

The shares of SpiceJet on Wednesday at 1:54 pm IST were trading at Rs 62.31, up by 2.15 per cent.