Delhi High Court pulls up Kalanithi Maran for 'calculated gamble', dismisses plea against SpiceJet

The Delhi High Court on Friday dismissed appeals filed by businessman Kalanithi Maran and KAL Airways against SpiceJet and its promoter Ajay Singh, holding that the appellants had engaged in a “calculated gamble” by delaying the filing and re-filing of their challenge to a 2023 arbitral award ruling..A division bench of Justices C Hari Shankar and Ajay Digpaul found no merit in condoning the 55-day delay in filing and 226-day delay in re-filing the appeals, terming the conduct of the appellants as lacking in bona fides and amounting to deliberate concealment from both the Court and the opposite parties.“This is not a simple case of delay… It is a case of deliberate and wilful concealment of facts both from the Division Bench as well as from the respondents and a calculated gamble taken by the appellants,” the Court observed..The case stems from a 2015 commercial dispute between Maran, KAL Airways, and Singh over the control and operation of SpiceJet. An arbitral tribunal of three retired Supreme Court judges had passed an award on July 20, 2018. Both sides filed petitions under Section 34 of the Arbitration and Conciliation Act, 1996, to challenge portions of the award.These petitions were dismissed by a single judge on July 31, 2023. The single judge delivered two judgments in July 2023 to uphold the arbitral tribunal's 2018 award directing SpiceJet to refund ₹270 crores to Maran.SpiceJet and Singh appealed the dismissal within the statutory 60-day period in August 2023. Those appeals were heard on multiple occasions and decided in May 2024, with the division bench remanding the matter back to the single judge for fresh consideration. In effect, the ₹270 crore refund ordered in favour of Maran was put on hold..Maran and his company, KAL Airways (appellants) then approached the Supreme Court against the May 17 High Court division bench judgment, but the apex court dismissed their Special Leave Petitions on July 26, 2024, affirming the remand for fresh consideration by a different single judge bench.Just four days later, the appellants removed defects and refiled their long-pending appeals against the single judge's 2023 ruling, in so far as it dismissed their petitions challenging some portions of the arbitral tribunal's 2018 ruling. .In a scathing assessment of the appellants’ conduct, the division bench noted that Maran and KAL Airways had “concealed” the filing of these appeals even while actively participating in the proceedings related to timely appeals filed by SpiceJet.“This is not a case in which the appellants bona fide filed the present FAOs in time and were merely indolent or even negligent in removing objections in refiling the FAOs. This is a case in which the appellants took a calculated gamble.”The Court found it impossible to believe the appellants’ claim of inadvertence.“The alacrity with which the appellants effected service of the present FAOs on the respondents, removed the objections in the FAOs and refiled the FAOs within four days of the Supreme Court order on 26 July 2024, indicates that the entire exercise was carefully orchestrated.”The Court further said that such behaviour disqualified the appellants from seeking equitable relief.“Limitation is a statute of equity and repose, and if the delay, whether in filing or refiling, is found to be lacking in bona fides, it has to be sternly dealt with.”.The Court noted that only after the Supreme Court rejection did Maran and KAL Airways refile their defective appeals. In this regard, the High Court drew attention to a revealing admission in the appellants’ own condonation application:“Aggrieved by the Judgment dated 17.05.2024... the management of the Applicant decided to challenge the said judgment before the Hon’ble Supreme Court as well as refile the captioned Appeal......The only inaccuracy in this admission is that the appellants did not decide to revitalize the present appeals, by removing the objections therein, even after the judgment... but only after the SLPs... were also dismissed.”. Concluding that the delay was not only unexplained, but part of a strategic litigation posture, the Court dismissed the appeals:“The facts of the present case do not attract the general principles regarding leniency in the matter of condonation of delay in refiling... In such circumstance, it hardly matters whether the delay is in filing or in refiling of the appeals.”The Court declined to delve into the technical rules around re-filing and held,“Accordingly, we decline to condone the delay of 55 days in filing and 226 days in re-filing the present appeals... The appeals also stand dismissed on the ground of delay without going into merits.”.Kalanithi Maran was represented by Senior Advocate Gaurav Pachnanda with Advocates Nandini Gore, Sonia Nigam, Swati Bhardwaj, Akarsh Sharma, Akhil Abraham Roy and Shreya Bansal from Karanjawala & Co. Kal Airways was represented by Advocates Gauhar Mirza (Partner) Hiral Gupta (Director) and Sukanya Singh (Senior Associate) from Cyril Amarchand Mangaldas. .SpiceJet was represented by Senior Advocate Amit Sibal, with Advocates KR Sasiprabhu, Goutham Shivshankar, Chinmayi Chatterjee and Darpan Sachdeva..[Read Judgment]