SC halts proceedings in Jet-Sahara cases

14 July 2006

Mumbai: The Supreme Court has stayed all proceedings on separate petitions filed by Jet Airways and Air Sahara against each other in the Mumbai and Lucknow courts following the failed Rs2,300 crore ($500 million) acquisition deal.

A three-judge bench headed by Chief Justice Y K Sabharwal issued notice to Air Sahara on Jet''s petition to transfer all suits filed in a Lucknow court to the Bombay High Court. The apex court directed Air Sahara to file its reply within two weeks and asked Jet Airways to file its reply within another week. The court deferred hearing on the matter for three weeks.

The interim order of the Lucknow district court to freeze the escrow account opened for the acquisition would continue till further orders.

Jet Airways had, in January, agreed to buy Air Sahara for Rs2,300 crore in cash. But, the deal collapsed in June for want of regulatory approvals, including security clearance for Jet chief Naresh Goyal to join Air Sahara''s board.

Air Sahara moved the Lucknow district court seeking to stop Jet from operating the escrow account opened for the purpose, even before expiry of the June 21-midnight deadline for completing the share purchase agreement. Jet, too, filed a petition in the Bombay High Court.