New Delhi [India], August 31 (ANI): The Delhi High Court on Monday declined to interfere at this stage with the issue of SpiceJet Ltd.’s non-payment of the first ₹50 crore instalment towards the ₹144.51 crore amount it had undertaken to deposit in the long-running dispute with KAL Airways Pvt. Ltd. and Kalanithi Maran.
Justice Subramonium Prasad did not pass any interim order against SpiceJet and Ajay Singh and left it open to KAL Airways and Maran to take appropriate steps in accordance with law. The court directed that any application moved by the respondents in this regard be listed on September 21, 2026, when SpiceJet’s bona fides are already scheduled to be considered.
Senior advocate Mukul Rohatgi, appearing for SpiceJet and Ajay Singh, sought more time to comply with the payment schedule recorded by the court. He submitted that SpiceJet had received the first tranche under the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0 in June following the West Asia crisis.
Rohatgi said the first tranche had been utilised for the airline’s operational requirements, including Aviation Turbine Fuel, airport charges, aircraft engine lease payments and salaries. He submitted that SpiceJet had expected a second tranche to be released by now.
According to Rohatgi, the airline would have deposited the ₹50 crore instalment had the second tranche been released. However, the expected funds had not yet been received.
The court was informed that SpiceJet had applied for the second tranche with concern Bank on June 26 and that the application was still under process. In its application, the airline said, based on information from the lending bank, it expected the tranche to be released around September 15, subject to the bank’s approvals.
Rohatgi pointed out that the matter was already listed for September 21 to examine SpiceJet’s bona fides and requested the court not to pass any adverse or interim order before that date. He submitted that the airline was only seeking that the matter be taken up on the date already fixed.
During the hearing, the court observed that the request appeared to be in the nature of anticipatory relief. Rohatgi reiterated that SpiceJet was not seeking any final relief but only requested that no interim order be passed before September 21.
The payment dispute stems from the High Court’s July 13 order, under which SpiceJet and Ajay Singh had undertaken to deposit ₹50 crore within 45 days and the remaining ₹94.51 crore within 90 days, towards the total amount of ₹144.51 crore. The court had said the payment would be considered as a measure to test their bona fides.
With the first instalment due on August 27, SpiceJet has now sought a four-week extension for making the ₹50 crore deposit. It has also sought a corresponding extension for depositing the remaining ₹94.51 crore.
In its application, SpiceJet said it had applied for ₹1,000 crore under ECLGS 5.0 and had received ₹151 crore as the first tranche. The airline said the amount was immediately utilised for expenses required to keep its operations running.
The airline has attributed the delay in making the payment to the non-release of the second tranche. It said the amount was crucial for stabilising its operations and finances and that it was continuing to make efforts to secure its release.
SpiceJet has further stated that its daily flight operations had reduced from around 160 flights on February 28, 2026, to 73 flights, which it attributed to the impact of the West Asia crisis. It has claimed that being required to make the ₹50 crore payment without receiving the second tranche could severely affect its operations and have ramifications for around 5,169 employees and 5,500 vendors.
The application follows the Supreme Court’s May 19 order, under which the apex court declined to interfere with the High Court’s judgment but permitted SpiceJet and Ajay Singh to approach the High Court in view of the subsequent ECLGS policy.
The High Court subsequently recorded the payment undertaking on July 13 and deferred the hearing of SpiceJet’s Section 34 challenge to the arbitral award. The Section 34 proceedings are now listed for November 3, 2026.
SpiceJet has also relied on the Division Bench’s May 17, 2024 judgment in support of its challenge to the arbitral award. According to its application, the Division Bench had found a strong prima facie case on issues including the award of excessive interest without reasons and the interpretation and application of Section 65 of the Indian Contract Act.
The application states that if SpiceJet succeeds in its challenge to the award on all grounds, the respondents would be liable to repay about ₹449.86 crore to the airline. It further states that even if SpiceJet succeeds only on the challenge to the interest component, it would be entitled to a refund of about ₹179 crore.
For KAL Airways and Maran, senior advocate Jayant Mehta appeared along with Nandini Gore, Sonia Nigam, Akarsh Sharma and Vedant Choudhary. SpiceJet and Ajay Singh were represented by senior advocate Mukul Rohatgi along with K.R. Sasiprabhu. (ANI)
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