The Supreme Court on Monday agreed to hear the State Bank of India-led consortium of lenders’ appeal against the National Company Law Appellate Tribunal’s order that upheld the transfer of ownership of grounded Jet Airways to Jalan Kalrock Consortium (JKC). The NCLAT verdict has come almost a year after it permitted the transfer of ownership to the successful bidder in January last year.
Additional Solicitor General Venkatraman, who appeared for the lenders, told a bench led by Chief Justice DY Chandrachud that the NCLAT order is “shocking” and is “completely unacceptable. It reverses a Supreme Court ruling on the Rs 150-crore bank guarantee. We are supposed to collect Rs 4,400 crore, they are struggling to repay Rs 300 crore now.”
However, senior counsel Mukul Rohatgi, who appeared for JKC, objected to the ASG using the word ‘shocking,’ saying “such words cannot be used for a court order.”
While the bench was initially inclined to issue notice to JKC and the monitoring committee on the SBI’s appeal, it accepted the counsel’s request to finish the hearing at the earliest. The CJI, accordingly, kept the case for further hearing on Friday.
The appellate tribunal had in its March 12 order directed lenders to affect the transfer to JKC in 90 days.
The consortium of lenders in their appeal claimed that their total admitted claim was of Rs 7800 crore, but JKC had offered Rs 4783 crore payable in tranches in five years.
“The first tranche payment of Rs 350 crore was required to be made by March 21, 2022 (which has not been paid till date despite several extensions given by NCLT/NCLAT/Supreme Court),” the lenders said.
“The resolution plan has failed; the same was approved by the NCLT on June 22, 2021. However, till date even the first tranche payment has not been received,” the appeal stated, adding that even the appellate tribunal directing the successful bidder (belatedly) create security by mortgaging Dubai properties within 30 days had not been complied with.
Stating that the NCLAT had modified the approved resolution plan, SBI contended that the performance bank guarantee of Rs 150 crore given by JKC towards implementation of its resolution plan has now been directed to be adjusted towards the first tranche payment, thus lenders have been “left with no security,” they alleged.
As per the resolution plan, the airport dues and parking charges of Rs 475 crores (now around Rs 1000 crore) were required to be paid upfront by JKC in 180 days. However, the March order has confined this liability only to Rs 25 crore towards airport dues, SBI said.
Jet Airways, once India’s biggest private carrier, stopped operations in April 2019, unable to cope with its financial liabilities. In 2020, its committee of creditors approved a resolution plan submitted by the UK’s Kalrock Capital and UAE-based entrepreneur Murari Lal Jalan to revive and operate the airline. Subsequently, a monitoring committee comprising the lenders, the consortium and the resolution professional was formed to oversee the operationalisation of the airline.
The consortium has yet to implement the plan.