Jet asked to pay Rs 478-crore dues to Sahara

Bombay high court on Wednesday asked Jet Airways to pay Sahara India Rs 478 crore (Rs 4.78 billion) in two weeks on account of default in its obligations toward the Rs 1,450 crore (Rs 14.5 billion) take-over deal of Sahara Airlines (now Jetlite).

Justice Dhananjay Chandrachud, however, rejected the petition filed by Sahara claiming Rs 2,000 crore (Rs 20 billion) as the total sum for the take over instead of the renegotiated amount of Rs 1,450 crore (Rs 14.5 billion) agreed between Jet and Sahara.

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The judge held that Jet Airways was liable to pay Sahara Rs 478 crore (Rs 4.78 billion), which includes interest at 9 per cent per annum.

This amount was computed on the principal amount of Rs 402 crore (Rs 4.02 billion), the court said in a verbal order.

Jet bought Sahara Airlines in April, 2007, for Rs 1,450 crore (Rs 14.5 billion) after an arbitration award.

It paid Rs 900 crore (Rs 9 billion) and agreed to pay the balance in four installments.

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Jet contended that in March, 2008, the Income Tax Department had demanded tax dues of Rs 107 crore (Rs 1.07 billion) from Sahara.

According to Jet, this amount was due from Sahara Group as it pertained to the period before the acquisition.

While paying Sahara an installment of Rs 137 crore (Rs 1.37 billion) in March, 2008, Jet deducted Rs 37 crore (Rs 370 million) against I-T dues.

Again in 2009, Jet deducted another Rs 50 crore (Rs 500 million) towards tax dues.

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Sahara contended that it was not liable to pay tax dues since the airline had been taken over by Jet Airways.

During the course of the hearing, certain properties of Jet were attached.

Jet had given an undertaking in the high court that it will not dispose of the property till the payment is made to Sahara or till the dispute is settled between them.

The court held that this undertaking would stand dissolved once the dues are paid because by then, the solvency of Jet Airways would be established.

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Sahara had in March, 2009, moved the high court contending that the Naresh Goyal-led airline was liable to pay Rs 2,000 crore (Rs 20 billion), instead of the renegotiated amount of Rs 1,450 crore (Rs 14.5 billion) agreed between them as it had defaulted on payment.

Sahara submitted that the takeover price had been brought down to Rs 1,450 crore (Rs 14.5 billion) from Rs 2,000 crore (Rs 20 billion) provided Jet Airways would not default on payment.

Sahara said Jet had defaulted on payment and, therefore, concession on the takeover deal was not tenable.