On Thursday, the Supreme Court ruled against the National Company Law Appellate Tribunal’s (NCLAT) decision that supported the transfer of Jet Airways’ ownership to the Jalan-Kalrock Consortium (JKC) under the resolution plan that has been approved, and instead ordered the liquidation of the airline.
State Bank of India (SBI) and creditors challenged the NCLAT ruling, and a bench consisting of Chief Justice of India Dhananjaya Y Chandrachud and Justices JB Pardiwala and Manoj Misra upheld their plea. The court claimed that because the resolution procedure has been delayed for five years, it was forced to use its authority under Article 142 to order the liquidation of the indebted airline.
The long-running legal dispute over Jet Airways, which was grounded in April 2019 because of financial difficulties, has concluded with the ruling. It came after discussions about whether creditors had the authority to pursue liquidation and whether JKC, the victorious resolution applicant, had fulfilled its responsibilities. The resolution plan for Jet Airways was affirmed by the March NCLAT verdict. It gave JKC to take over and gave them ninety days to finish the ownership transfer. NCLAT ordered JKC to amend a performance bank guarantee of ₹150 crore.
According to the top court, this change was “perverse” and went against previously issued orders from January of this year, the resolution plan’s parameters, and established legal precedents.
In an appeal to the Supreme Court, the creditors—represented by SBI, Punjab National Bank, and JC Flowers Asset Reconstruction Private Limited—contested the NCLAT’s March ruling. They contended that JKC had failed to satisfy important responsibilities, such as providing the ₹350 crore infusion on schedule and fulfilling other financial promises, like mortgaging Dubai real estate.
According to the top court, JKC violated the resolution plan’s conditions by meeting the financial commitments and failing to fulfill its responsibilities. JKC claimed in the previous hearings that its efforts were hampered by procedural hold-ups, such as security clearances. It stated that these delays caused JKC to suffer large losses of over ₹600 crore and confirmed that the consortium had met its financial obligations, including a further ₹100 crore infusion as recently as September 2023. After winning the proposal to revitalize the airline in 2021, Jet Airways hinted to a possible 2024 restart.
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