Court dismisses SpiceJet's request citing repeated defaults and non-compliance with undertakings; property title documents not accepted as interim security
In a significant ruling delivered on October 13, 2026, the Delhi High Court, presided over by Justice Mr. Vinod Kumar, dismissed the application filed by SpiceJet Limited seeking an extension of time to deposit Rs.144.51 crores as part of an outstanding interest liability under an arbitral award. The Court also declined SpiceJet's request to deposit original title documents of a Gurugram property as interim security.
Background:
The dispute arose from an arbitral award where SpiceJet was directed to pay a substantial interest amount of Rs.294.51 crores, out of which Rs.100 crores had already been paid. The balance sum of approximately Rs.194.51 crores was subject to enforcement proceedings. The Supreme Court had earlier directed SpiceJet to pay Rs.75 crores towards interest pending the disposal of challenges under Section 34 of the Arbitration and Conciliation Act, 1996. Following SpiceJet's failure to comply, the Delhi High Court ordered the deposit of the entire outstanding interest amount.
Extension Requests and Undertakings:
SpiceJet had repeatedly sought extensions, citing financial constraints and delays in receipt of funds under the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0. The Court had granted a structured payment timeline: Rs.50 crores within 45 days and the remaining Rs.94.51 crores within 90 days, based on SpiceJet's undertaking. Despite this, SpiceJet failed to deposit even the first installment, attributing the delay to the non-sanction and non-disbursement of the second tranche of Rs.349 crores under ECLGS.
Property as Security:
SpiceJet also sought permission to deposit title documents of an unencumbered property in Udyog Vihar, Gurugram, valued at approximately Rs.147.77 crores, as interim security. However, the Court rejected this plea, referencing an earlier order that had declined a similar request and emphasizing the importance of compliance with the original undertaking to deposit cash.
Court's Observations and Decision:
Justice Vinod Kumar underscored that while SpiceJet faces financial constraints, the interest of the respondents (KAL Airways Pvt Ltd) must also be protected. The Court noted that SpiceJet had been granted multiple extensions previously and had failed to honor its commitments, including the initial Rs.50 crore deposit. The Court emphasized that mere non-disbursement of anticipated funds under ECLGS does not constitute sufficient grounds for further extensions. The request to accept property documents as security was also denied, highlighting that compliance with the monetary undertaking was paramount.
The Court thus dismissed the application for extension of time and refused to accept the property as interim security, reinforcing the principle that admitted liabilities under an arbitral award must be complied with promptly and that litigants cannot indefinitely delay payments through repeated requests.
Implications:
This ruling reiterates the judiciary's firm stance on enforcement of arbitral awards and the limited tolerance for delay once liabilities are acknowledged. It also clarifies that financial hardships or pending disbursements of anticipated funds, such as under government schemes, cannot indefinitely stall compliance. The judgment serves as a precedent for similar disputes where parties seek extensions based on financial difficulties post-admission of debt.
Bottom Line:
Arbitration and Conciliation Act, 1996 - Petition seeking extension of time to deposit admitted outstanding interest amount under arbitral award - Petitioner having repeatedly sought indulgence and failed to comply even with its own undertaking to deposit first instalment of Rs.50 crores within 45 days - Mere non-disbursement of anticipated ECLGS funds not sufficient ground for further enlargement of time - Prayer to deposit title documents of property as interim security also rejected, such request having been declined earlier and petitioner having failed to honour undertaking.
Statutory provision(s):
Arbitration and Conciliation Act, 1996 Section 34, Code of Civil Procedure, 1908 Section 151
SpiceJet Limited v. KAL Airways Pvt Ltd, (Delhi) : Law Finder Doc Id # 2998881
