Bombay High Court Denies Sky One Relief Over ₹52.50 Lakh Delay, Says Belated Offer Can't Show Readiness

The Bombay High Court on 5 October dismissed Sky One Airways Private Limited's petition seeking to freeze shares held by Heligo Charters' sellers and restrain actions affecting the company, holding that the airline's belated offer to pay the overdue Rs. 52.50 lakh instalment did not establish timely compliance with the share-purchase terms.

Justice Amit Borkar held that a party seeking interim protection in an acquisition dispute cannot establish readiness and willingness to perform its obligations by offering to pay an overdue instalment after the dispute has arisen. The Bench observed:

“Readiness and willingness cannot be shown only by an offer made after the dispute has started when an important payment had remained unpaid earlier.”

Sky One proposed to acquire Heligo Charters under a term sheet dated 4 April 2026, which recorded a transaction valued at Rs. 25 crore. The parties restructured the arrangement on 9 May, when Sky One agreed to pay Rs. 5 crore for Heligo's entire paid-up share capital and make specified infusions towards its liabilities.

For an initial 9.5% shareholding, Sky One paid Rs. 47.50 lakh. A further Rs. 52.50 lakh was payable for another 10.5% either upon completion of due diligence or on the 30th day after the term sheet, whichever occurred earlier. The Court noted that the instalment fell due on 8 June 2026, even though due diligence remained incomplete.

Sky One also advanced more than Rs. 23.45 crore towards Heligo's liabilities. The parties disputed whether these advances counted towards the share-purchase price or arose under a separate inter-corporate loan agreement.

Heligo issued a termination notice on 16 August 2026. Sky One subsequently approached the High Court under Section 9 of the Arbitration and Conciliation Act, 1996, seeking interim protection pending arbitration. It asked the Court to preserve escrowed and other shares and restrain actions affecting Heligo's shareholding, board, aircraft, permits, contracts and assets. Sky One also offered to deposit the overdue Rs. 52.50 lakh in Court.

Sky One argued that its advances of more than Rs. 23.45 crore demonstrated substantial performance. It also alleged that the sellers had failed to fulfil their obligations, including providing creditor confirmations and taking steps towards regulatory approvals.

The sellers argued that the advances arose under the separate inter-corporate loan agreement and could not count towards the share-purchase price. They also contended that Sky One had failed to meet its funding commitments and that the acquisition remained subject to conditions and definitive agreements that the parties never completed.

The Court held that the 9 May term sheet bound the parties but did not constitute an unconditional, completed sale, as the acquisition remained subject to due diligence, regulatory approvals and other conditions. It found that a substantial part of the Rs. 23.45 crore advances arose under the separate loan agreement and did not establish payment towards the Rs. 5 crore share-purchase price. It held:

“The contracts can be read together wherever required, but each contract must retain the legal character given to it by its own language.”

Further, the Bench rejected Sky One's contention that incomplete due diligence postponed the Rs. 52.50 lakh instalment. It interpreted the term sheet's “whichever is earlier” clause to mean that payment fell due on 8 June, regardless of whether due diligence had concluded.

It further held that payments under the separate loan agreement could not substitute for the specific share-purchase instalment, observing that “amounts paid under another contract cannot be treated as compliance with this particular instalment.”

Heligo had asked the escrow agent to maintain the status quo on 20 August, reducing the immediate risk of the escrowed shares being released. However, the Bench left the validity of Heligo's termination and the parties' disputed claims unresolved. It found the requested restraints too broad, dismissed the petition and allowed the parties to seek interim relief from the arbitral tribunal.

Accordingly, the High Court dismissed Sky One's petition for interim protection.

Appearances for petitioner (Sky One Airways Private Limited): Advocates Abhinav Chandrachud, Pranit Kulkarni, Nihar P. Mankad, Anirudh Sharma, Pravin D. Kadam.

Appearances for respondent (Nayan Arun Jagjivan & Ors.): Advocates Venkatesh Dhond, Karishma Rao, Amey Hadwale, Nikita Lundwani, Anjali Yadav.