Extending the interim order freezing the escrow account opened for Jet Airways' proposed takeover of Air Sahara, the district court in Lucknow on Friday restrained the former from selling the latter's share worth Rs 500 crore (Rs 5 billion).
After three hours of inconclusive arguments during which Jet questioned the maintainability of Sahara's petition, District and Sessions Judge Shiv Charan Sharma posted further hearing to June 30 and said if necessary it will continue on July 1.
The court said its order on freezing of the escrow account and on the Sahara share sale will continue till further orders. Senior advocate Abhishekh Singhvi, appearing for Jet, contended that since the petition on the issue was filed by Naresh Goyal-promoted airlines before the Bombay high court, the Lucknow court has no jurisdiction to entertain Sahara's petition.
Jet has also challenged the impleadment of ICICI Bank in the petition along with Sahara, contending that the bank was not party to the failed Rs 2,300 crore (Rs 23 billion) deal.
However, Sahara, which on Wednesday, had succeeded in restraining the Jet from withdrawing the escrow account, opposed argument on maintainability of its petition saying that the deal was signed in Lucknow as such the court in Lucknow has full jurisdiction on the issue.
Further, senior advocate Dushyant Dave, appearing for Sahara submitted that the Bombay high court has not yet taken cognizance of Jet's petition.
Deal with Jet still 'subsisting': Air Sahara
Air Sahara meanwhile has claimed before a court in Lucknow that the Rs 2,300 crore takeover deal with Jet Airways was 'still subsisting' despite the expiry of deadline of the share-purchase agreement on June 21.
"As far as Sahara is concerned, the deal is still subsisting. Only Jet is saying that the deal has come to an end," Dushyant Dave appearing for the Subrata Roy-promoted airline submitted before District and Sessions Judge Shiv Charan Sharma.
He said after the agreement was signed everything was handed over to the Jet and now the fate of 4,500 Sahara employees were at stake, besides the money involved in the deal.
Casting apprehension over Jet's intention to get the deal scrapped, Dave said: "We wonder if Jet has done it intentionally."
"If Jet is allowed to walk away with the money it will sound death knell for Sahara," he said conceding that Air Sahara has lost up to five per cent of market share after the deal, which collapsed after expiry of the share purchase agreement on June 21.
