SpiceJet told the Delhi high court it could “collapse” if forced to immediately deposit ₹144.5 crore in its long-running dispute with Kalanithi Maran and KAL Airways Pvt. Ltd., citing disruptions caused by the West Asia conflict and rising aviation turbine fuel prices.
Appearing for the airline, senior advocate Mukul Rohatgi told the bench of Justice Subramonium Prasad on Monday that SpiceJet’s operations and cash flows have been severely impacted, particularly due to restrictions on flights to the Gulf.
“The entire business is held up… I am the smallest of the big three airlines. If my accounts are attached for non-deposit, the entire system will collapse—at least I will collapse,” Rohatgi told the court, seeking time to arrange funds.
After hearing the submissions, the court adjourned the matter to 15 April.
SpiceJet moved a review petition on 7 April seeking relief from the high court’s earlier direction requiring it to deposit ₹144.5 crore by 14 April. The airline also proposed to furnish a one-acre commercial property in Gurugram as security instead of making an immediate cash payment.
Rohatgi submitted that the property is unencumbered and owned by the company and that SpiceJet is willing to deposit the title deeds before the court. He said the airline has already taken steps to monetize the asset by appointing real estate advisory firm CBRE but argued that such transactions could take several months and should not be forced into a distress sale.
“We should not have a crash sale which will give me 50%,” he said, urging the court to grant additional time so that the asset can be sold at a fair value.
Government package
Rohatgi further submitted that the broader aviation sector is under stress and indicated that the government may step in with relief measures.
“I am told that the government is bringing out a package which will grant me a chance to get loans from PSU banks on governmental sovereign security. The government will stand security for the airlines,” he said.
In this backdrop, the airline urged the court to defer the deposit deadline and grant interim protection, arguing that immediate enforcement could disrupt operations, affect employees and passengers and worsen its financial position.
The prolonged legal battle between SpiceJet and Maran has been through multiple rounds of litigation across forums. In January, the Delhi high court directed SpiceJet and its promoter Ajay Singh to deposit ₹144.5 crore, after recording that a total of ₹194.51 crore remained due under earlier directions. After adjusting ₹50 crore already deposited, the outstanding amount stood at ₹144.51 crore.
SpiceJet challenged this order in the Supreme Court, which on February 27 refused to interfere and imposed costs on the airline for prolonging the litigation. This effectively required the airline to comply with the high court’s order.
Subsequently, SpiceJet moved the high court in early March seeking modification of the deposit condition. It proposed to furnish immovable property worth around ₹148 crore as security instead of depositing cash. However, on 18 March, the high court rejected this plea, reiterating its direction that the amount must be deposited within four weeks.
Faced with the looming deadline, the airline filed a review petition, arguing that there were errors in the earlier order and pointing to supervening circumstances, including the impact of the West Asia conflict on its business.
Dispute origins
The dispute dates back to January 2015, when Maran and KAL Airways transferred their 58.46% stake in SpiceJet to Ajay Singh during acute financial distress for the airline. As part of the transaction, Maran and KAL Airways had infused about ₹679 crore into the airline through convertible warrants and preference shares.
Maran later alleged that these instruments were not issued by the new management and sought a refund, leading to arbitration proceedings before a three-member tribunal comprising retired Supreme Court judges. In July 2018, the tribunal rejected Maran’s claim for over ₹1,300 crore in damages but directed SpiceJet to refund ₹579 crore along with interest in relation to the warrants and preference shares.
Both parties challenged aspects of the award in the Delhi high court, triggering a series of enforcement proceedings, appeals and interim orders. SpiceJet maintained it has already paid about ₹730 crore to Maran and KAL Airways, including the principal amount and interest.
However, disputes over the remaining dues and interest calculations continued to keep the matter alive in courts. The case remains a significant financial and legal overhang for SpiceJet, which has in recent years faced liquidity pressures, aircraft groundings due to unpaid dues, and insolvency petitions from lessors and creditors.
