Spicejet said it will seek a refund of ₹450 crore from its former promoter Kalanithi Maran and his firm, KAL Airways, after the former received a favourable ruling from the Delhi High Court.
What Happened: The Division Bench of the Delhi High Court has overturned a previous decision by a single-judge bench, paving the way for SpiceJet and its promoter, Ajay Singh, to seek a substantial refund. The airline had earlier paid ₹730 crore to Maran and KAL Airways, which encompassed ₹580 crore in principal and an additional ₹150 crore as interest.
The tussle dates back to 2015 when Maran and KAL offloaded a 58.46% stake in Spicejet to Singh but later alleged that warrants and preference shares they had paid for were not allotted to them.
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SpiceJet and Ajay Singh’s appeal contested several pivotal issues related to the refund award and the interest justification in the case. The Division Bench found considerable merit in these challenges, which were not sufficiently addressed in the previous order dated July 31, 2023.
The court also observed that penal interest had been levied despite SpiceJet not violating the Share Purchase Agreement. Given that these facts were overlooked by the single judge, the appeals of Ajay Singh and SpiceJet have been granted, and the contested judgment dated July 31, 2023, has been annulled.
Price Action: Spicejet stock rose 2% to ₹62.47 on Wedesday’s trading session.
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