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Business News/ Companies / News/  Supreme Court to hear Jet Airways lenders' plea against NCLAT order on Friday
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Supreme Court to hear Jet Airways lenders' plea against NCLAT order on Friday

The lenders, led by State Bank of India, termed the NCLAT's decision to approve the resolution plan proposed by Jalan-Kalrock consortium as shocking

in March, the NCLAT allowed JKC to adjust the security against a performance bank guarantee of ₹150 crore. AFP PHOTO/Sajjad HUSSAINPremium
in March, the NCLAT allowed JKC to adjust the security against a performance bank guarantee of 150 crore. AFP PHOTO/Sajjad HUSSAIN

NEW DELHI:The Supreme Court on Monday deferred hearing on a plea by Jet Airways' lenders, challenging the decision of the National Company Law Appellate Tribunal (NCLAT) to approve the resolution plan proposed by the Jalan-Kalrock consortium for the bankrupt airline.

The court will now hear the case on Friday.

During Monday's proceedings, lenders, led by the State Bank of India (SBI), termed the NCLAT's judgment as "shocking", citing its deviation from a previous Supreme Court ruling on the encashment of a 150 crore bank guarantee. 

Also Read: Jet Airways' lenders move SC against NCLAT decision to uphold resolution plan

Initially, the bench led by chief justice D.Y. Chandrachud intended to issue a notice in response to the plea. However, upon the request of the lenders' counsel, the court deferred the hearing till Friday without issuing any notice.

The lenders referenced a previous judgment on 18 January by a three-judge bench, led by the chief justice, which had set aside the NCLAT's order from 28 August, 2023, allowing JKC to submit the 150 crore performance bank guarantee to fulfill the total obligation.

However, in March, the NCLAT allowed JKC to adjust the security against a performance bank guarantee of 150 crore, from which JKC will be required to complete its first tranche of 350 crore as a condition precedent to taking ownership of Jet Airways. According to the appellate tribunal, JKC has already raised 200 crore for the first tranche.

The NCLAT also directed the airline's lenders to transfer the company to its successful bidder, the Jalan-Kalrock consortium (JKC), within 90 days. 

The appellate tribunal had asked the consortium to obtain an air operator’s certificate as part of the handover process.

Additionally, NCLAT had instructed JKC to pay dues to the airline’s workmen, employees, creditors, and other costs of the resolution process from the first tranche of 350 crore.

The NCLAT decision in March had brought a glimmer of hope for the bankrupt airline, brightening prospects for its revival. However, uncertainty looms over the airline's future once again with the lenders moving Supreme Court.

Also Read: At long last, Jet Airways revival in sight

Jet Airways had outstanding debt of more than 8,000 crore to lenders.

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 22 June, 2021, the NCLT 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

 

 

 

 

 

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ABOUT THE AUTHOR
Krishna Yadav
Krishna, a lawyer turned journalist, is a key member of Mint's corporate team. He covers major legal battles in Delhi's courtrooms, with a focus on finance, markets, and policy. Additionally, he crafts easy-to-understand explainers for complex stories and holds a PG Diploma from the renowned Asian College of Journalism.
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Published: 22 Apr 2024, 07:51 PM IST
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