No revival of Jet Airways as Supreme Court orders liquidation of carrier's assets
New Delhi: The Supreme Court has ordered the liquidation of Jet Airways’ assets, exercising its special powers under Article 142 to overturn a tribunal's ruling that allowed ownership transfer to the Jalan-Kalrock Consortium (JKC) despite incomplete payment to creditors, media reports said.
Article 142 grants the court authority to pass orders ensuring "complete justice," which it deemed necessary given the "peculiar and alarming" situation involving unfulfilled obligations under the resolution plan.
Chief Justice DY Chandrachud, along with Justices JB Pardiwala and Manoj Misra, supported the lenders' petition, emphasizing that liquidation is the only viable option since the resolution plan is no longer implementable, reported NDTV.
The court noted that liquidation aligns with the best interests of creditors, employees, and other stakeholders.
"Liquidation must be available to lenders as a last resort... since resolution plan is no longer capable of implementation," Chief Justice DY Chandrachud and Justices JB Pardiwala and Manoj Misra were quoted a saying by NDTV.
This will allow creditors, including the State Bank of India and the Punjab National Bank, to plea seeking direction from the court to have their dues paid.
On March 12, the National Company Law Appellate Tribunal (NCLAT) cleared JKC's ownership transfer despite the consortium’s failure to make a required initial payment of Rs 350 crore, part of the overall Rs 4,783 crore plan.
The Supreme Court criticized the NCLAT's decision, highlighting the importance of full payment to creditors, according to the report.
As part of its order, the court directed that Rs 200 crore previously infused by JKC be forfeited and instructed the NCLAT’s Mumbai bench to appoint a liquidator, it added.
This decision follows JKC’s unsuccessful request to transfer Rs 200 crore to an escrow account, a plea it withdrew in May after the tribunal denied relief.
Jet Airways has faced prolonged financial and legal challenges since its grounding in April 2019.
Two years after Jet Airways a consortium JKC successfully bid for ownership.
JKC comprises NRI Murari Jalan based in United Arab Emirates, and Florian Fritsch, a Jet shareholder via an offshore holding company called Kalrock Capital Partners Limited.
In 2021, JKC won the ownership bid, and a monitoring committee was established to oversee the implementation.
However, financial delays and incomplete filings, including the announcement of delayed financial results for March 2024, hindered progress, leading to the Supreme Court’s decisive order for liquidation, the report added.
Support Our Journalism
We cannot do without you.. your contribution supports unbiased journalism
IBNS is not driven by any ism- not wokeism, not racism, not skewed secularism, not hyper right-wing or left liberal ideals, nor by any hardline religious beliefs or hyper nationalism. We want to serve you good old objective news, as they are. We do not judge or preach. We let people decide for themselves. We only try to present factual and well-sourced news.
