New Delhi:

The Supreme Court has come down hard on SpiceJet Chairman and Managing Director Ajay Singh, warning him he will be sent to Tihar jail for non-compliance with its order on making payment to global investment bank and financial services firm Credit Suisse AG.

The top court asked Mr Singh to pay $ 5,00,000 towards an instalment to the Swiss firm along with USD 1 million defaulted amount.

“We have to move to the next drastic step. We are not worried even if you shut down,” a bench of Justices Vikram Nath and Ahsanuddin Amanullah observed.

Irked over the “dilly-dally business”, the bench told Mr Singh he will have to abide by the consent terms and warned, “We are not bothered even if you die. It is too much. We will send you to Tihar jail, if you do not pay.” The court’s fulmination came on Monday when it asked Mr Singh and the company secretary of SpecieJet to be present during the hearings and make the payment. It posted the matter for further hearing on September 22.

According to the Swiss firm, SpiceJet had availed the services of SR Technics, Switzerland, for maintenance, repair, and overhaul of aircraft engines, modules, components, assemblies, and parts, which were mandatory for its operations. An agreement for such services was entered into between SpiceJet and SR Technics on November 24, 2011 for 10 years. The terms of payments were also agreed upon.

SR Technics had given Credit Suisse the right to receive payments from SpiceJet for the services.

The Supreme Court had on July 25 given additional time to SpiceJet to make the payment to Credit Suisse as per the consent terms agreed upon by the two parties.

The top court was hearing a plea by the Swiss firm seeking initiation of contempt proceedings against Singh and SpiceJet over “a wilful and intentional disobedience” of court orders and failure to pay dues as per a settlement between the two sides.

On August 14, the bench while issuing contempt notices to Singh and SpiceJet had noted the submission of the Swiss firm that the court had granted indulgence and withdrawn the airline from liquidation only in view of the consent terms dated May 23, 2022 by which USD 500,000 was to be paid every month by the low cost carrier to the company from July 15, 2020.

“It was submitted that, though as of now more than 6.5 million US dollars has to be deposited, but only a little over 2 million US dollars has been deposited,” the bench had noted the submission of counsel appearing for Credit Suisse in its August 14 order.

SpiceJet and Credit Suisse had told the Supreme Court on August 18, 2022 about the resolution of their financial dispute which led to the withdrawal of an appeal by the low-cost airline against a Madras High Court order for its winding up due to alleged non-payment of dues to the Swiss firm.

“There is a settlement which has taken place on May 23, 2022, as per the consent terms. In view of it, both the parties are satisfied with the settlement and want to withdraw the SLP (special leave petition) filed by the petitioner.

“Accordingly, the application is allowed,” the top court had said in its order.

The court had directed the parties to abide by the consent terms.

On the appeal of SpiceJet, the top court had on January 28, 2022 stayed the publication of the winding up notice and the order directing the official liquidator attached to the Madras High Court to take over the assets of the low-cost airline.

It had also asked SpiceJet to resolve the financial dispute with the Swiss firm.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

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Spicejet and its promoter Ajay Singh on August 23 approached the Delhi High Court challenging a single-judge order upholding an arbitral award asking them to refund ₹579 crore plus interest to media baron Kalanithi Maran.

The appeals came up before a division bench of Justices Yashwant Varma and Dharmesh Sharma which initially listed it for hearing on September 15 as the counsel for Spicejet and Mr. Singh were not present.

Later, Spicejet’s counsel mentioned the matter before the bench which then listed it for hearing on Thursday.

On July 31, the single judge had upheld the award announced by the arbitration tribunal on July 20, 2018 in favour of Maran and his company Kal Airways.

“There is nothing in the impugned award to suggest that it suffers from patent illegality and the findings therein are perverse and will shock the conscience of this court.”

“In the instant case, the petitioners have not been able to prove that the impugned arbitral award is patently illegal, against public policy of India or fundamental policy of law and thus have failed to make out a case for the award to be set aside,” the single judge bench had said in its verdict.”

It had said the court was barred from entering into the merits of an award unless there was an error that was apparent on the face of the record or an illegality that goes to the root of the matter.

Ajay Singh had approached the high court challenging the arbitral award.

The High Court had said the petitioners had failed to substantiate the grounds for setting aside the arbitral award and dismissed the two petitions by Spicejet and Ajay Singh.

The case dates to January 2015, when Mr. Singh, who owned the airline earlier, bought it back from Maran after it was grounded for months due to resource crunch.

While the tribunal had asked Maran to pay Singh and the airline ₹29 crore in penal interest, Singh was asked to refund ₹579 crore plus interest to Maran.

The tribunal, created in 2016 on the orders of the Delhi High Court to adjudicate the share transfer dispute, had held that there was no breach of a share sale and purchase agreement reached between Maran and current promoter Ajay Singh in late January 2015.

In a relief to Ajay Singh, the tribunal had, however, rejected Maran’s appeal for damages of ₹1,323 crore from the Gurugram-based carrier.

In February 2015, Maran of the Sun Network and Kal Airways, his investment vehicle, had transferred their 58.46% stake in SpiceJet to Mr. Singh along with ₹1,500 crore debt liability, after the airline was grounded due to a severe cash crunch. Mr. Singh was the first co-founder of the airline and is now its chairman and managing director.

As part of the agreement, Maran and Kal Airways had claimed to have paid Spicejet ₹679 crore for issuing warrants and preference shares. However, Maran approached the Delhi high court in 2017, alleging SpiceJet had neither issued convertible warrants and preference shares nor returned the money.