Supreme Court Declines Relief to SpiceJet in ₹144.5 Crore Deposit Case, Imposes Costs for Prolonged Litigation

YUGCHARAN | 27/02/2026

In a significant judicial setback for budget airline SpiceJet, the Supreme Court of India on Friday refused to stay a Delhi High Court order directing the carrier and its promoter Ajay Singh to deposit ₹144.51 crore in connection with a long-running arbitration dispute involving Kalanithi Maran and KAL Airways Pvt. Ltd. The apex court also imposed a cost of ₹1 lakh on SpiceJet, strongly signalling its displeasure over what it described as repeated and prolonged litigation in the matter.

The refusal to grant interim relief means that SpiceJet is now legally bound to comply with the High Court’s direction to deposit the outstanding amount within the stipulated timeframe, unless it succeeds in securing further relief through other legal avenues. Legal observers believe the order underscores the Supreme Court’s increasingly firm stance against what it views as attempts to delay compliance with binding judicial directions, particularly in commercial and arbitration-related disputes.

The matter was heard by a bench comprising Justices P.S. Narasimha and Alok Aradhe, who declined to interfere with the Delhi High Court’s order dated 19 January. During the hearing, the bench made pointed remarks about the nature and duration of the litigation, indicating that the dispute had seen “tons and tons of litigation” with no apparent end in sight. The judges expressed concern over the repeated approaches made to courts at different stages, despite clear directions already having been issued in the past.

Senior advocate Amit Sibal, appearing on behalf of SpiceJet, urged the court to refrain from imposing costs, arguing that the airline was merely pursuing its legal remedies. The bench, however, remained unconvinced. It observed that continued litigation without final resolution burdens the judicial system and undermines the authority of previous court orders. The court not only imposed ₹1 lakh as costs but also warned that the amount could be enhanced to ₹2 lakh should similar pleas continue in the future.

The Delhi High Court’s January order, which is now set to be enforced, recorded that SpiceJet had admitted that ₹194.51 crore was due and payable under earlier Supreme Court directions. After adjusting ₹50 crore that had already been deposited, the balance outstanding amount was calculated at ₹144.51 crore. The High Court took the view that there was no justification for further delay, especially when the liability itself was not disputed in principle.

In its reasoning, the High Court emphasised that previous directions issued by the Supreme Court in February and July 2023 were clear and unambiguous. Those directions required SpiceJet to comply with payment obligations within specific timelines, failing which the arbitral award would become fully executable. The court found that these directions had not been fully complied with, despite the passage of considerable time.

Rejecting SpiceJet’s argument that enforcement proceedings should await the final outcome of challenges to the arbitral award, the High Court held that orders of the Supreme Court cannot be kept in abeyance indefinitely. Referring to Article 144 of the Constitution, which mandates that all authorities act in aid of the Supreme Court, the High Court observed that continued non-compliance erodes judicial authority and the rule of law. Consequently, it directed SpiceJet and Ajay Singh to deposit the outstanding amount with the court registry within six weeks.

The origins of the dispute date back more than a decade, to January 2015, when Kalanithi Maran and KAL Airways transferred their 58.46% stake in SpiceJet to Ajay Singh through a share sale and purchase agreement. At the time, the airline was facing severe financial distress and operational challenges. As part of the transaction, Maran and KAL Airways infused approximately ₹679 crore into the airline through convertible warrants and preference shares, intended to stabilise operations and support revival efforts.

Subsequently, Maran alleged that under the new management, these financial instruments were never issued as agreed. He sought a refund of the amounts invested, leading to the dispute being referred to arbitration. A three-member arbitral tribunal, which included retired Supreme Court judges, was constituted to adjudicate the matter.

In July 2018, the tribunal delivered its award, rejecting Maran’s claim for ₹1,323 crore in damages but directing SpiceJet to refund ₹579 crore along with interest in relation to the warrants and preference shares. While the award provided partial relief to both sides, it did not bring closure. Instead, it marked the beginning of a prolonged legal battle, with both parties challenging different aspects of the award before the Delhi High Court under the Arbitration and Conciliation Act.

The litigation entered a more complex phase with multiple enforcement petitions, appeals, and interim orders. In February 2023, the Supreme Court intervened decisively, directing the encashment of a ₹270 crore bank guarantee and ordering SpiceJet to pay ₹75 crore towards interest within a specified period. The court also warned that failure to comply would render the award fully executable, a warning that now appears to have materialised.

Despite these directions, enforcement proceedings continued alongside substantive challenges, with Maran alleging repeated non-compliance by SpiceJet. The Supreme Court’s latest refusal to stay the deposit order suggests that the judiciary is no longer inclined to entertain arguments that effectively delay compliance with financial obligations acknowledged under prior orders.

For SpiceJet, the ruling comes at a particularly challenging time. The airline has, in recent years, faced significant liquidity pressures, aircraft groundings due to unpaid dues, and insolvency petitions from certain lessors and creditors. Industry analysts note that while the airline has undertaken efforts to stabilise operations, ongoing legal liabilities continue to weigh heavily on its financial health and investor confidence.

Queries sent to SpiceJet seeking a response to the Supreme Court’s order remained unanswered at the time of publication. Market participants are now closely watching how the airline plans to arrange the required funds and whether the deposit will have any immediate operational impact.

From a broader perspective, legal experts say the case highlights the judiciary’s growing impatience with prolonged commercial litigation, particularly where arbitration awards are involved. Courts have repeatedly stressed the importance of finality and enforcement in arbitration, viewing delays as contrary to the spirit of alternative dispute resolution.

The Supreme Court’s decision also sends a clear signal to corporate litigants that repeated challenges and interim pleas may attract not only dismissal but also financial penalties. By imposing costs and warning of higher penalties in the future, the court has sought to deter what it perceives as misuse of the judicial process.

As matters stand, SpiceJet and its promoter are required to deposit ₹144.51 crore within the prescribed timeframe. Failure to do so could expose the airline to further enforcement action, including attachment proceedings. For now, the ruling marks another decisive chapter in a dispute that has spanned more than a decade, reinforcing the principle that compliance with court orders is not optional, regardless of the commercial pressures involved.