The Supreme Court is scheduled to deliver its verdict on Thursday on a plea by State Bank of India (SBI) and other creditors challenging the decision of the National Company Law Appellate Tribunal (NCLAT) that upheld the resolution plan of the airline Jet Airways grounded and approved the transfer of its ownership to the Jalan Kalrock Consortium (JKC).

A bench comprising Chief Justice DY Chandrachud and Justices JB Pardiwala and Manoj Misra will deliver the reserved verdict on October 16. On March 12, the NCLAT confirmed the grounded airline’s resolution plan and approved the transfer of its ownership to JKC. .

The appellate court further ordered Jet Airways’ monitoring committee to complete the transfer of ownership within 90 days. Further, the NCLAT had also directed Jet Airways’ lenders to adjust Rs 150 crore paid by the consortium as performance bank guarantee (PBG).

The SBI, Punjab National Bank (PNB) and JC Flowers Asset Reconstruction Private Limited have challenged the March 12 NCLAT verdict. The consortium had maintained that creditors, including the SBI, were unjustifiably seeking to liquidate Jet Airways.

The banks referred to certain media reports and stated that public lenders are unjustifiably responsible for the closure of private airlines and that the companies face insolvency proceedings. The JKC argued that the obligations under the resolution plan were contingent on the effective date, which marks the beginning of the consortium’s obligation to make payments under the plan.
He had opposed the lenders’ allegation that the consortium defaulted and made the resolution plan unviable.

READ | Sunil Mittal’s Airtel joins the Indian Army, becoming the only private company in…

The consortium has taken all necessary positive steps for the implementation of the resolution plan and it is now up to the lenders to fulfill their obligations, he said. Banks said the JKC failed to fulfill its financial obligations, including infusion of Rs 350 crore within the stipulated period of 180 days from the effective date under the resolution plan.

The lenders had further maintained that the consortium failed to meet other key obligations such as pumping in Rs 150 crore in cash and mortgaging three Dubai properties as required by the resolution plan.
On October 15, the consortium objected to the lawyer’s submissions and said it was the creditors who had delayed the resolution process. It had said that the revival of Jet Airways was a commercial endeavour, subject to several external factors and that the consortium cannot be held solely responsible for delays caused by security clearances and other procedural hurdles.

The NCLAT, in its verdict, approved the transfer of its ownership to the consortium by upholding the NCLT Mumbai verdict of January 13, 2023. The NCLAT had also directed the lenders of Jet Airways to adjust the Rs 150 crore paid by the consortium as PBG.

After being grounded in 2019 due to a severe liquidity crisis at the time, the full-service airline underwent an insolvency resolution process. However, he was having a dispute with the lender. In 2021, JKC turned out to be the successful bidder for Jet Airways.

(Except for the headline, this story has not been edited by DNA staff and is published by PTI)