Jet Airways Ltd , India’s No. 1 private carrier, will pay the remaining Rs 203 crore to Sahara India within two weeks after Bombay HC directed it to pay dues incurred for acquiring Air Sahara, a Jet official said on Wednesday.
The Bombay High Court asked Jet Airways to pay Rs 478 crore to the Sahara Group, including interest at 9 percent per annum. Jet’s stock fell more than 6 percent after the court ruling.
Jet had made an upfront payment of Rs 900 crore to Sahara in 2007 and has already deposited Rs 275 crore more with the court in installments, said M Shivkumar, Senior Vice President, Finance, at Jet Airways.
In 2007, Jet Airways acquired Sahara Airlines for Rs 1,450 crore and renamed it as JetLite. But both parties have since been engaged in a legal battle over payment issues.
The court on Wednesday rejected Sahara’s petition claiming Rs 2000 crore as the total amount for the deal, instead of the renegotiated Rs 1,450 crore.
Jet had deducted some amount from the pending installments after the income tax department raised certain tax obligations from Air Sahara relating to its pre-acquisition days, he said.
Jet’s remaining payment of Rs 203 crore includes Rs 87 crore the airline had paid to the tax authorities as the deducted amount, which has recently been refunded to the airline, he said.
Jet’s stand was that the liability should be borne by Sahara, a position that Sahara had refused to accept and then moved the High Court for appropriate relief.
“This has been the subject matter of debate in all these years whether we were right in deducting and whether Sahara was right in not giving indemnity obligations,” he added.
Jet Airways shares closed down 4.88 percent at Rs 447.1 in BSE.