New Delhi, May 19 The Supreme Court on Tuesday allowed beleaguered low-cost airline SpiceJet and its Chairman Ajay Singh to approach the Delhi High Court for modification of a direction requiring a cash deposit of Rs. 144.51 crore in its long-running arbitration dispute with Kalanithi Maran and Kal Airways Private Limited.
A bench of Justices P.S. Narasimha and Alok Aradhe disposed of the special leave petition (SLP) filed by SpiceJet and Ajay Singh, permitting them to approach the Delhi High Court afresh in light of recent developments arising from the West Asia crisis and the Centre’s Emergency Credit Line Guarantee Scheme (ECLGS) 5.0.
The apex court clarified that it was not expressing any opinion on the merits of the dispute pending before the Delhi High Court under Section 34 of the Arbitration and Conciliation Act.
Senior advocate Mukul Rohatgi, appearing for SpiceJet, submitted before the Justice Narasimha-led Bench that the airline sector had been severely impacted by the ongoing West Asia crisis, including rising fuel prices and operational disruptions. He argued that SpiceJet, being the smallest player in the aviation sector, was facing acute financial distress and sought time to clear the dues.
Rohatgi further submitted that the Centre had introduced a bailout and emergency credit line scheme for airlines, under which funds were expected to be released by November.
The senior counsel stated that the airline had offered immovable property as security and was taking steps to sell it, but immediate liquidation was not feasible as required under the Delhi High Court’s order.
The dispute arises out of execution proceedings linked to an arbitral award in favour of Maran and Kal Airways. The proceedings are being heard alongside SpiceJet’s challenge to the award under Section 34 of the Arbitration and Conciliation Act.
Earlier, the Delhi High Court had directed SpiceJet and Ajay Singh to deposit Rs 144.51 crore — an order the Supreme Court had declined to disturb.
Subsequently, applications moved by SpiceJet and Ajay Singh seeking substitution of the cash deposit with immovable property were dismissed by the Delhi High Court on March 18, followed by dismissal of review petitions on May 4.
According to the SLP filed before the Supreme Court, SpiceJet contended that the outbreak of hostilities in West Asia had caused "around 35 per cent decrease in operational revenue" due to closure and restriction of airspace in the Middle East. The airline also referred to sharp increases in aviation turbine fuel costs, longer flying routes, and higher insurance costs.
The plea further referred to the Union government’s approval of ECLGS 5.0 on May 5, 2026, stating that the scheme was intended to help “eligible borrowers to tide over any short-term liquidity mismatches in view of the West Asia Crisis”. In its petition, SpiceJet claimed that it had already paid Rs 729 crore to the respondents, including Rs 579 crore towards principal and Rs 150 crore towards interest, and argued that insisting on immediate cash security of Rs 144.51 crore could adversely impact airline operations.
For the respondents/decree holders, senior advocate Jayant Mehta appeared along with advocates from Karanjawala & Co.
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