The Supreme Court has directed the liquidation of Jet Airways, invoking Article 142 of the Indian Constitution to set aside a tribunal decision that upheld a resolution plan transferring ownership to the Jalan-Kalrock Consortium (JKC). The court's decision comes in light of what it described as "peculiar and alarming" circumstances involving the consortium's failure to fulfill payment obligations to creditors.
The court ruled that liquidation is the only viable option for the airline, which has been grounded since April 2019, as the resolution plan "is no longer capable of implementation." The decision was issued by Chief Justice DY Chandrachud and Justices JB Pardiwala and Manoj Misra, who granted a plea from creditors, including the State Bank of India and Punjab National Bank.
The National Company Law Appellate Tribunal (NCLAT) had previously upheld JKC’s resolution plan on March 12, which included transferring ownership of Jet Airways to the consortium. However, this decision was challenged by creditors after JKC reportedly failed to pay ₹350 crore as an initial installment. The consortium was required to pay a total of ₹4,783 crore under the resolution plan.
The court ordered that ₹200 crore already infused by JKC be forfeited and directed NCLAT's Mumbai bench to appoint a liquidator. The tribunal had earlier denied JKC’s request to move the ₹200 crore into an escrow account, and the consortium subsequently withdrew this plea in May, following the denial.
Jet Airways, once a prominent player in India's aviation sector, has faced a series of financial and legal obstacles since JKC, a consortium led by Murari Jalan and Florian Fritsch, successfully bid for ownership in 2021. Despite the formation of a monitoring committee to oversee the plan's implementation, the process encountered delays, with Jet Airways postponing the announcement of financial results for the quarter and year ending March 2023.
This liquidation decision represents a significant development for the airline, marking the end of efforts to revive the grounded carrier and opening the way for asset distribution among creditors and stakeholders.
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