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Sahara: No out-of-court settlement with Jet

May 07, 2009 09:41 IST

The legal battle over the terms of Jet Airways' takeover of Sahara India group's airline has taken a twist with the latter's counsel saying there'll be no out-of-court settlement.

This is after last month's advice from the high court in Mumbai to both parties to resolve their dispute on income tax liabilities from the takeover.

Judge D Y Chandrachud was hopeful of a solution if the two parties sat and discussed their differences and had adjourned the case till May 6. Both lawyers had said their clients would meet and talk.

The HC will, it appears, pass an order on Friday.

Jet had bought Sahara Airlines from the Sahara group 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 instalments.

In March 2008, the income-tax department demanded tax dues of Rs 107 crore (Rs 1.07 billion) from Sahara India Airlines. Jet decided this should come from Sahara as it pertained to the period before the acquisition.

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

BS Reporter in Mumbai