New Delhi: The Supreme Court Thursday ordered liquidation of cash-strapped Jet Airways, saying that the resolution plan, approved five years ago, is no longer capable of implementation.
A Bench, headed by CJI D.Y. Chandrachud, allowed the lenders’ plea against the transfer of ownership of the grounded airline to Jalan Kalrock Consortium (JKC).
The Bench, also comprising Justices J.B. Pardiwala and Manoj, invoked its extraordinary powers under Article 142 of the Constitution “for doing complete justice” between the parties and ordered the appointment of a liquidator forthwith.
Further, it ordered the forfeiture of Rs 200 crore infused by the JKC and directed lenders to invoke Rs 150 crore Performance Bank Guarantee (PBG).
In the plea filed before the apex court, the Committee of Creditors (CoC), led by the State Bank of India, has said that the proposed revival plan was not in the best interest of lenders and questioned the National Company Law Appellate Tribunal (NCLAT) order upholding the resolution plan.
In January this year, the Supreme Court ordered JKC, the successful resolution professional bidder for the cash-strapped airline, to deposit Rs 150 crore in an escrow account jointly held by the State Bank of India and JKC.
It had cautioned that legal consequences would follow if the JKC failed to furnish the bank guarantee.
It had also asked the NCLAT to decide by the end of March 2024 on the lenders’ plea challenging the ownership of the grounded Airways to JKC.
The consortium had undertaken an infusion of Rs 350 crore equity per the court-approved resolution plan to assume ownership of Jet Airways.
A three-member Bench of the NCLAT had agreed to an adjustment of Rs 150 crore from the PBG towards the payment of Rs 350 crore.
The appellate tribunal had also accepted an undertaking given by the consortium committing to pay Rs 100 crore by August 31 last year and another Rs 100 crore by September 30, 2023.
Due to severe financial distress, Jet Airways, once one of India’s largest and most popular airlines, entered the corporate insolvency resolution process under the Insolvency and Bankruptcy Code (IBC) in June 2019.
