The lenders of Jet Airways, led by State Bank of India, have challenged a National Company Law Appellate Tribunal’s (NCLAT) decision that upheld the resolution plan proposed by the Jalan-Kalrock consortium for the bankrupt airline.
In its order last month, the NCLAT directed the airline’s lenders to transfer the company to its successful bidder, the Jalan-Kalrock consortium (JKC), within 90 days. A Supreme Court bench, headed by Chief Justice D.Y. Chandrachud, is expected to hear the lenders’ challenge on Monday.
The NCLAT decision in March had brought a glimmer of hope for the bankrupt airline, brightening prospects for its revival. However, if the lenders’ plea in the Supreme Court is accepted, it might once again cast uncertainty over the airline’s future.
In its order, the appellate tribunal instructed the consortium to obtain an air operator’s certificate as part of the handover process. It also directed Jet’s lenders to establish security on three Dubai-based immoveable properties offered by JKC within 30 days.
Subsequently, the lenders would need to offset the security against a performance bank guarantee of ₹150 crore, with JKC required to complete its first tranche of ₹350 crore as a condition precedent to taking ownership of Jet Airways. The appellate tribunal noted that JKC has already raised ₹200 crore for the first tranche.
Additionally, the appellate tribunal instructed JKC to settle dues towards the airline’s workmen, employees, creditors, and other costs of the resolution process from the first tranche of ₹350 crore.
“We hope and trust that all parties will take steps to implement the resolution plan to make the first Corporate Insolvency Resolution Process (CIRP) of the aviation company in the country successful,” remarked NCLAT chairperson justice Ashok Bhushan while pronouncing the order.
The National Company Law Tribunal (NCLT) had in January 2023 permitted the transfer of Jet Airways’ ownership to the Jalan-Kalrock consortium. However, the airline’s lenders contested this, alleging non-compliance by JKC with the resolution plan.
On June 22, 2021, the NCLT had approved a resolution plan submitted by JKC, which consists of Murari Lal Jalan, a UAE-based non-resident Indian holding shares in Jet Airways in his personal capacity, and Florian Fritsch, who holds shares through his investment holding company Kalrock Capital Partners Ltd, Cayman.
