Delhi HC asks SpiceJet to pay ₹100 cr to Kalanithi Maran by September 10, SpiceJet vs. Kalanithi Maran.
A longstanding legal dispute between SpiceJet and its former promoter, Kalanithi Maran, has once again taken center stage as the Delhi High Court issued an order for SpiceJet and its Chairman and Managing Director (CMD), Ajay Singh, to pay ₹100 crore to Maran by September 10, 2023. This decision comes in the midst of a seven-year-old feud over share transfers, shedding light on a convoluted legal battle that holds significant implications for both the aviation industry and corporate governance.
Delhi High Court’s Directive; SpiceJet vs. Kalanithi Maran.
In a recent development, the Delhi High Court has made its stance clear, demanding that SpiceJet fulfill its financial obligation by disbursing ₹100 crore to Kalanithi Maran by September 10, 2023. The court has warned SpiceJet’s CMD, Ajay Singh, of severe repercussions in case of non-compliance. These consequences include the attachment of the airline’s assets, as well as the possibility of Singh’s arrest.
This ruling is a pivotal point in an ongoing legal conflict concerning a share transfer dispute between SpiceJet and its former promoter. Despite SpiceJet’s plea of financial distress and its inability to deposit ₹75 crore within the stipulated timeframe, the court remains resolute in prioritizing the settlement of liabilities owed to Maran.
The Genesis of the Dispute
The roots of the discord lie in a share transfer agreement dating back to 2015. Kalanithi Maran and his investment vehicle, KAL Airways, transferred their controlling stake in SpiceJet to Ajay Singh, the current CMD of the airline. However, Maran alleged that the stipulated warrants and preference shares were never issued in accordance with the agreement’s terms.
In July 2018, an arbitration panel sided with Maran, mandating that SpiceJet refund ₹579 crore along with accrued interest. This verdict set the stage for Maran to pursue the enforcement of this ruling, resulting in a series of legal skirmishes and court interventions.
Struggles of SpiceJet
While SpiceJet has cited financial constraints and potential insolvency as justifications for non-compliance with the court’s orders, the Delhi High Court remains focused on resolving the dispute with Maran.
Senior counsel Maninder Singh, representing Maran, sought the attachment of SpiceJet’s profits, which amounted to ₹204 crore for the quarter ending on June 30, 2023, to cover the outstanding liabilities.
However, the court stood firm on its decision to ensure Maran’s claims were met, irrespective of the airline’s financial difficulties.
Maran’s Relentless Pursuit
Kalanithi Maran’s unwavering determination to enforce the arbitration award against SpiceJet remains a prominent feature of this legal battle.
In August 2023, Maran had escalated the conflict by filing an application seeking the attachment of 50 percent of SpiceJet’s daily revenues, totaling ₹393 crore – the sum owed to him by the airline.
This move escalated the legal battle, prompting the Delhi High Court to summon SpiceJet and demand the submission of financial statements, assets, and liabilities affidavits within a week.
Maran’s legal representation accused SpiceJet of deliberately defying court orders and employing a strategy to evade compliance.
Complexities of Legal Proceedings
In a significant development, in July, the Delhi High Court upheld the validity of the arbitral award against SpiceJet, and this decision authorized Maran to press for the award’s enforcement.
However, despite this legal victory, the failure on SpiceJet‘s part to provide an affidavit detailing its assets and liabilities, coupled with its non-compliance with previous court orders, compelled the court to demand Ajay Singh’s personal appearance.
Further, SpiceJet’s attempt to challenge the Delhi High Court’s orders in the Supreme Court yielded mixed results.
While the apex court initially granted a stay on the order, it later authorized the execution of the arbitral award.
Who is Kalanithi Maran?
Kalanithi Murasoli Maran is the visionary founder of the Sun Group; his portfolio spans television channels, newspapers, weeklies, FM radio stations, DTH services, a cricket team (Sunrisers Hyderabad), and a movie production house. His influential role within the Indian airline SpiceJet from 2010 to 2015 added yet another layer to his diverse achievements.
His Journey
Maran’s journey began in 1990 with the launch of the Tamil monthly magazine “Poomaalai.” He established Sun TV on April 14, 1993, and the listing of Sun TV on the Bombay Stock Exchange in April 2006, following a capital infusion of $133 million for a 10% stake, catapulted him into the realm of billionaires.
His recognition extended to participating in a roundtable discussion with then-US President Bill Clinton.
By 2010, Maran had ascended to become the 17th richest Indian, commanding a considerable net worth of US$4 billion. He earned the distinction of being India’s highest-paid business executive, a title he shared with his wife, Kavery. Together, they occupied a significant position in the Indian executive pay charts with a combined package of ₹62 crore (US$7.8 million).
Maran’s contributions to the media industry earned him prestigious accolades, such as the Young Businessman Awards from CNBC and Ernst & Young. Forbes magazine dubbed him the “Television King of Southern India,” a testament to his far-reaching impact on the media landscape.
Personal Insight
Beyond his professional achievements, Kalanithi Maran is the son of former Union Minister of India Murasoli Maran and the grandnephew of former Tamil Nadu Chief Minister M. Karunanidhi. His younger brother, Dayanidhi Maran, has also served as a former minister.
As of 2023, Kalanithi Maran’s net worth stands at an impressive US$2.3 billion; this, coupled with his substantial influence in the media sector, firmly establishes him as a significant figure in both business and public life.
The Last Bit, As the legal battle continues to unfold, India’s aviation industry, corporate governance, and legal enforcement are set to feel the repercussions of the SpiceJet vs. Kalanithi Maran.
