Delhi High Court
Kalanithi Maran vs Spicejet Limited & Anr on 14 March, 2016
Author: Manmohan Singh
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Order delivered on: 14th March, 2016
+ O.M.P.(I) (COMM.) No.71/2016
KAL AIRWAYS PRIVATE LIMITED ..... Petitioner
Through Mr.Rajiv Nayar, Sr. Adv. with
Mr.Anirban Bhattacharya, Mr.Gauhar
Mirza, Mr.Abhishek & Mr.Aditya
Vikram, Advs.
versus
SPICEJET LIMITED & ANR ..... Respondents
Through Mr.Paras Kuhad, Sr. Adv. with Mr.Atul
Sharma, Mr.Milanka Chaudhury,
Ms.Satakshi Sood, Mr.K.R.Sariprabhu,
Mr.Vishnu Sharma, Mr.J.Chaturvedi &
Ms.Swati Vijayvergiya, Advs. for R-1.
Mr.Sandeep Sethi, Sr. Adv. with
Mr.Atul Sharma, Mr.Milanka
Chaudhury & Ms.Satakshi Sood, Advs.
for R-2.
+ O.M.P.(I) (COMM.) No.72/2016
KALANITHI MARAN ..... Petitioner
Through Mr.Kapil Sibal, Sr. Adv. and
Dr.Abhishek M. Singhvi, Sr. Adv. with
Mr.Anirban Bhattacharya, Mr.Gauhar
Mirza, Mr.Abhishek & Mr.Aditya
Vikram, Advs.
versus
OMP(I) (COMM.) Nos.71/2016 & 72/2016 Page 1 of 6
SPICEJET LIMITED & ANR ..... Respondents
Through Mr.Paras Kuhad, Sr. Adv. with Mr.Atul
Sharma, Mr.Milanka Chaudhury &
Ms.Satakshi Sood, Mr.K.R.Sariprabhu,
Mr.Vishnu Sharma, Mr.J.Chaturvedi &
Ms.Swati Vijayvergiya, Advs. for R-1.
Mr.Sandeep Sethi, Sr. Adv. with
Mr.Atul Sharma, Mr.Milanka
Chaudhury & Ms.Satakshi Sood, Advs.
for R-2.
CORAM:
HON'BLE MR.JUSTICE MANMOHAN SINGH
MANMOHAN SINGH, J. (ORAL)
1. The abovementioned two petitions have been filed under Section 9 of
the Arbitration and Conciliation Act, 1996, seeking various interim reliefs,
inter-alia, for restraining the respondents No.1 & 2 from allotting/transferring/
issuing/alienating and/or creating any third party interest and/or encumbrance
on any shares of the Company.
2. When these petitions were listed on 11th March, 2016, Mr.Kapil Sibal,
learned Senior counsel appearing on behalf of the petitioner in O.M.P. (I)
(COMM.) No.72/2016 had informed the Court that the petitioner Mr.Kalanithi
Maran has issued the 'General Lien Letter' dated 24th February, 2015 to the
Chief Manager, City Union Bank Limited, Mandaveli Branch, Chennai-
600028, requesting him to take delivery of the deposit of Rs.100 crores duly
discharged in favour of the said Bank and hold the same as security for the
credit facilities sanctioned up to an overall limit of Rs.100 crores. The
submissions of the petitioner are controverted by the learned Senior counsel
appearing on behalf of the respondents.
3. Various other issues were discussed by both the parties. Learned Senior
counsel appearing on behalf of the respondents had also relied upon various
paras of the reply dated 9th October, 2015 to the notice. After small
submissions, both the parties agreed that the resolution would be passed by
the Board of the respondent No.1-Company, authorizing an Agent to appear
and represent the Company before the Bombay Stock Exchange
(BSE)/Securities and Exchange Board of India (SEBI) in the matter of
issuance of warrants and place the same before the BSE to consider the
application dated 18th September, 2014. Thereafter, the matter was adjourned
for today for the purposes of drafting the resolution to be passed by the Board
as well as authorization to appear and represent the respondent No.1-
Company in the matter of issuance of warrants.
4. It is pertinent to mention here that on 24th August, 2014, the Board
Resolution was passed for the issuance of (i) 81,680,629 and (ii) 107,410,749
Warrants. On 18th September, 2014, 'in-principle' application for issuance of
warrants was made by respondent No.1-Spicejet to BSE. On 24th September,
2014, the general meeting was held and thereafter, on 29 th January, 2015,
Share Purchase Agreement was executed between the parties. The entire
shareholding of the petitioners was transferred to Mr.Ajay Singh, respondent
No.2 herein. The BSE thereafter on 27th March, 2015 sent a letter to
respondent No.1-Company seeking undertaking from banks for the pledged
shares. On 10th July, 2015, the BSE also sent another letter to respondent
No.1-Company closing the 'in-principle' application dated 18th September,
2014, as the said Company did not provide clarification. It is a matter of fact
that respondent No.1 sent a letter dated 5th August, 2015 to BSE stating that
entire shareholding has been transferred, therefore, clarification/undertaking
was not required. Respondent No.1 thereafter on 7th January, 2016 made
representation to the SEBI for approval on the 'in-principle' application.
5. Learned counsel for respondent No.1 has informed the Court that the
aspect of closing of the application dated 18th September, 2014 is now
pending before SEBI.
6. Learned counsel for the petitioners submits that as far as the compliance
of deposit of the sum of Rs.100 crores is concerned, the same was deposited in
time and a letter was also issued to the Chief Manager, City Union Bank
Limited, Mandaveli Branch, Chennai. He says that after the application is
closed, the same should be reconsidered by the BSE, as the respondents are
agreeable to submit the fresh resolution by the Board before the BSE along
with the authorization letter so that in the application, appropriate order be
passed and thereafter, the respondents may issue the warrants as agreed.
7. Certain suggestions are given without prejudice. The same are read as
under:-
a) In terms of Clause 6.3.2 of the SPA, Rs.100 crores to be
released to the Company forthwith.
b) The Board of the Company shall pass a resolution jointly
authorizing the representative of KAL Airways/
Mr.Kalanithi Maran and the Company to represent and
pursue the application seeking approval for the issue of
warrants with the BSE/SEBI.
c) Thereafter the Company shall pass a board resolution for
issuing the CRPS shares in terms of the provisions of the
SPA.
d) On receipt of approval of BSE/SEBI, the warrants are to be
issued on the same terms as approved in the General
Meeting dated 24th September, 2014.
e) Since, the Company has paid the statutory dues stated in
Schedule 1 of the SPA to the extent of the principle amount,
as required under the amended Schedule H of the SPA and
as the penal action has not been launched due to any
breach/default of the terms of the SPA thus there is no
breach of the undertaking given under the SPA. As the penal
action has been launched despite payment of the statutory
dues stated in Schedule 1, and has in fact been initiated prior
to the SPA, the matter is in the domain of a dispute and
would have to be adjudicated in an appropriate proceedings.
8. In view of the entire gamut of the matter, I am of the view that at
present, there is no impediment if the BSE may consider the application dated
18th September, 2014 in the light of change of circumstances, because of the
reason that earlier the respondent No.1-Company did not provide clarification
and now, since the clarification is available coupled with the subsequent
events, the application dated 18th September, 2014 can be considered by the
BSE and the said subsequent events can also be informed to SEBI who is
dealing with the representation made by respondent No.1 for approval.
9. Accordingly, as agreed, the parties will file the fresh resolution along
with the letter of authorities before the BSE within three days from today. In
case of any further queries or any clarification required by the BSE, the parties
are ready to cooperate with each other. In view of the same, the BSE will
decide the application within two weeks from the date of submitting the
requisite papers. As soon as if the orders are passed 'in-principle' application
dated 18th September, 2014, consequently there would be no impediment on
the part of the respondents to issue the warrants without any delay.
10. List these petitions on 7th April, 2016 for further directions.
11. Copies of this order be given dasti to the learned counsel for the parties,
under the signatures of the Court Master and copies thereof be also
communicated to the BSE & SEBI for information.
(MANMOHAN SINGH)
JUDGE
MARCH 14, 2016
