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Our Bureau

Mumbai, March 31 Almost two years after acquiring Sahara Airlines, the Naresh Goyal-promoted Jet Airways is back in the court, after Sahara India Commercial Corporation Ltd (SICCL) moved an application in the Bombay High Court on Monday, claiming the airline had defaulted in its payment commitments.

This is the second time that the two groups are involved in a legal tussle, the first being even before the deal was sealed in April 2007.

Jet Airways acquired Sahara Airlines in an all-cash deal for Rs 1,450 crore and since renamed the latter, Jet Lite. Jet paid Rs 900 crore at the time the deal was inked, committing to pay the remaining Rs 550 crore in four equal annual and interest-free instalments in four years beginning March 2008.

Claiming that Jet had defaulted on payment of the instalment, SICCL sought court direction for attachment of some of the carrier’s movable properties.

Jet, in its response, claimed that the Income-Tax department has raised certain demands on Sahara Airlines for the period prior to the takeover and “unrelated to the activities of Jet Lite after the takeover”.

“It is the position of Jet Airways that this liability is to be borne by SICCL and since arrangements for payment of this liability were not made by SICCL, these amounts deposited by Jet Lite were deducted from the instalments payable under the Award,” Jet Airways said in a statement.

The Bombay High Court on Tuesday gave Jet a temporary reprieve, staying attachment of Jet property.

The next hearing in the case has been fixed for April 9. According to the buy-out agreement, Jet Airways is to pay the Sahara Group Rs 550 crore in four instalments of Rs 137.50 crore each from March 2008. Sources said Jet paid an amount of Rs 100 crore as the first instalment, deducting Rs 37.50 crore.

This was after the Income-Tax department raised a tax demand of Rs 107 crore, which, Jet claims, is for a period prior to the takeover. Hence, it deducted Rs 37.50 crore from the first instalment, as the airline claimed that it had deposited the amount.

Claiming that this was a default on the part of Jet, the Sahara Group has sought attachment on some of the movable properties of the airline, including the 40 leased aircraft.

More Stories on : Airlines | Mergers & Acquisitions | Jet Airways (India) Ltd

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