Opinion
Mint Quick Edit | Jet Airways’ failed take-off: An IBC let-down
Summary
- The Supreme Court has ordered the liquidation of an airline that was in limbo for half a decade, although the Jalan Kalrock Consortium was expected to take it over. That confusion prevailed for so long over its revival plan reflects poorly on India’s bankruptcy process.
Revival hopes for Jet Airways received a mortal blow on Thursday as the Supreme Court ordered its liquidation. Since the non-operational airline’s acquisition bid-winner Jalan Kalrock Consortium had failed to infuse ₹350 crore as an initial tranche and meet other obligations under a resolution plan, the apex court said it was left with “no choice but to send Jet Airways into liquidation".
It overturned a decision of the National Company Law Appellate Tribunal to uphold an order for its ownership transfer to the consortium and held it at fault for letting a ₹150 crore performance bank guarantee be adjusted against the ₹350 crore infusion.
Also read: Jet Airways liquidation: A wake-up call for India’s insolvency code
The airline, grounded since 2019, has witnessed twists and turns over its status. The consortium alleged that its lenders who took charge after pushing it into insolvency were not turning its ownership over, while the banks said the acquirer needed to infuse funds as required by the plan.
Meanwhile, those whose dues had to be paid were kept waiting. That confusion prevailed for so long reflects poorly on India’s bankruptcy process. Quick rescues were a key aim of the new code enacted in 2016. This case has been a high-profile let-down.
