Madras High Court quashes I-T order against Kalanithi Maran over SpiceJet

The Madras High Court today set aside a 2014 Income Tax department order declaring Kalanithi Maran as the principal officer of the low-cost carrier SpiceJet and making him liable for the alleged tax dues of the company when it was owned by him.

Justice M Duraiswamy allowed a petition by Maran challenging the November 3, 2014 order of the I-T department related to various financial years when the company was under his ownership.

The I-T department had not produced any material to establish that Maran was responsible for the day-to-day affairs of the SpiceJet, the judge said in his order.

“The main criteria to treat a person as the Principal Officer is that he should have been involved in the management, administration and day-to-day affairs of his company,” he said.

Stating that unless the I-T department make out prima facie case against Maran of his liability and obligation as principal officer of the company under section 278 B of the I-T Act, he could not be prosecuted for the offences committed by the company, he added.

During the hearing of the petition earlier, counsel for Maran had submitted he was only the non-executive chairman and not involved in the company’s day-to-day affairs.

Maran had sold SpiceJet to Ajay Singh in 2015.

HC asks SpiceJet, Maran to resolve dispute by arbitration

HC asks SpiceJet, Maran to resolve dispute by arbitration
HC asks SpiceJet, Maran to resolve dispute by arbitration

SpiceJet was today directed to deposit Rs 579 crore in 12 months before the Delhi High Court which asked the airline and Sun Group chief Kalanithi Maran alongwith his Kal Airways to appoint an arbitral tribunal to decide the share transfer dispute between them in a year.

The order came on Maran and his airline’s plea for issuing them stock warrants in SpiceJet as per a sale purchase agreement (SPA) of 2015 which led to transfer of ownership of the budget carrier to its co-founder Ajay Singh.

Maran and his airline have alleged in their plea that despite giving around Rs 579 crore to SpiceJet, the carrier failed to issue them the warrants or allot them tranche 1 and 2 of Convertible Redeemable Preference Shares and the amount was not utilised for paying statutory dues due to which they were also facing prosecution.

Justice Manmohan Singh directed SpiceJet to deposit the amount of Rs 579 crore in a fixed deposit in the name of Registrar of the Delhi High Court for 12 months.

The amount is to be deposited in five instalments with the first one in August, the court said.

The interim order directing SpiceJet not to issue or transfer its shares to a third party will continue, the court said.

Market regulator SEBI had earlier expressed its inability to approve the board resolution passed by SpiceJet for issue of warrants in favour of Maran and his Kal Airways.

The board resolution was passed on the court’s direction.

Under the SPA, Maran and Kal Airways had transferred their entire 350,428,758 equity shares (58.46 per cent stake) in the airline to Ajay Singh.

According to the SPA, Maran and Kal were to receive the redeemable warrants in return for around Rs 679 crore that they were to give to the airline towards operating costs and debt payment, the petition has claimed.

SpiceJet had earlier told the court that the change of ownership was effected as a rehabilitative measure to address the liability of Rs 2,000 crore incurred by the airline when it was under the management of Maran.

It had also claimed that every penny has been utilised towards operations and discharge of liabilities.

(Source : PTI)

HC clears issuance of warrants in Spicejet to Kalanithi

Spicejet to Kalanithi Maran
Spicejet to Kalanithi Maran

New Delhi,  Delhi High Court today passed an interim order paving the way for issuance of stock warrants in and his Kal Airways Pvt Ltd (KAL) saying there was no impediment before BSE in considering their joint representation seeking approval of the warrant issue.

As per the plea of Sun group head Kalanithi Maran, he and KAL were to be issued stock warrants in Spicejet by the airline under a 2015 sale purchase agreement (SPA) which led to change in ownership of the budget carrier.

Maran had sought that the warrants be issued in terms of an application made to the Bombay Stock Exchange (BSE) on September 18, 2014 and which had been approved by company’s board on September 24, 2014.

In an interim order, Justice Manmohan Singh said, “I am of the view that at present, there is no impediment if BSE may consider application dated September 18, 2014, in light of change of circumstances, because of the reason that earlier respondent 1 (Spicejet) did not provide clarification and now since clarification is available coupled with subsequent events, application dated September 18, 2014 can be considered by BSE…”

“Accordingly, as agreed, parties will file fresh resolution along with letter of authorization before the BSE within three days from today. In case of any further queries or any clarification required by BSE, the parties are ready to cooperate with each other .

“In view of the same, BSE will decide the application within two weeks from date of submitting the requisite paper,” the court said.

The court also gave various suggestions including one to Maran and KAL to release Rs 100 crore to Spicejet as per the SPA.

It also suggested that Spicejet’s board “shall pass a resolution jointly authorising representative of KAL/Maran and the company to represent and pursue application with BSE/SEBI seeking approval for issue of warrants”.

“Thereafter, company (Spicejet) shall pass board resolution for issuing Convertible Redeemable Preference Shares (CRPS) in terms of provisions of SPA,” the court also suggested.

SpiceJet asked to pay Rs 60 K for losing luggage

SpiceJet asked to pay Rs 60 K for losing luggage
SpiceJet asked to pay Rs 60 K for losing luggage

The apex consumer court has asked SpiceJet airline to pay compensation and penalty of Rs 60,000 to a Tripura resident for losing his luggage in one of its flights.

Justice J M Malik asked the air carrier to pay the compensation amount to Agartala resident Dr Atanu Ghosh whose one out of five registered ‘check-in’ baggages was lost during his flight and could not be found.

Both the lower fora had granted compensation of Rs 50,000 in favour of Ghosh. Thereafter, the airline approached the National Consumer Disputes Redressal Commission (NCDRC) against the orders of the fora and claimed that the amount awarded to Ghosh was on the higher side.

However, NCDRC said that “the compensation already granted by the fora below is on the lower side” and dismissed the airline’ petition with additional costs of Rs 10,000, to be given to Ghosh.

“The consumer court is bound to take the ‘down to earth’ view. It must be borne in mind that a hand-baggage/attache, without any contents, itself costs about Rs 9,000 to Rs 10,000. The statement made by the complainant (Ghosh) clearly mentions that the luggage contained goods worth Rs 90,000.

“In the instant case, the deficiency on the part of the petitioners (airlines) stands established. The compensation already granted by the fora below is on the lower side. We, therefore, dismiss the revision petition with costs of Rs 10,000,” it said, while directing the airline to pay the money to the complainant.

According to Ghosh, out of five registered ‘check-in’ baggages, one was missing and could not be traced and a complaint was lodged with SpiceJet officials in Kolkata and an FIR was lodged with the police.

He claimed that the baggage contained goods, such as video camera, digital camera, cosmetics and clothes, all worth Rs 90,000.

( Source – PTI )