End of runway for Jet: SC orders liquidation, nixes revival plan
Allows Lenders’ Consortium To Forfeit JKC’s ₹350cr
Dhananjay.Mahapatra @timesofindia.com 07.11.2024
New Delhi : Hopes of Jet Airways getting fresh wings crashed on Thursday as the Supreme Court ordered its liquidation, with the successful bidder — Jalan Kalrock Consortium — failing to deposit even the first tranche of ₹350 crore of the ₹ 4,783 crore resolution plan for years, thereby burdening SBI-led lenders with huge financial liabilities. Noting the gross violations of the plan by JKC, comprising UAE-based NRI Murari Lal Jalan and Florian Fritsch, who holds shares in Jet Airways through his Cayman Islands-based investment holding company Kalrock Capital Partners, the SC exercised its rarely-exercised omnibus powers under Article 142 of the Constitution to order liquidation of the unviable airline.
Court must ensure such debts stop running at some point of time’ In a 169-page judgment which provided guidelines for future Insolvency and Bankruptcy Code (IBC) proceedings and streamlining the processes before company law tribunals NCLT and NCLAT, the bench accepted arguments of additional solicitor general N Venkataraman and SBI counsel Sanjay Kapur to allow SBI-led lenders consortium to forfeit the ₹250 crore deposited by JKC as well as its ₹150 crore performance bank guarantee. Writing the judgment for the bench, Justice Pardiwala said, “The amount of ₹200 crore already infused by the SRA (successful resolution applicant in JKC) stands forfeited. The lenders/creditors are further permitted to encash the performance bank guarantee of ₹150 crore furnished by the SRA. We order accordingly.” The bench said, “In the peculiar and alarming circumstances as discussed in this judgment and also keeping in mind the fact that almost five years have elapsed since the Resolution Plan was duly approved by the NCLAT and there being no progress worth the name, we are left with no other option but to invoke our jurisdiction under Article 142 of the Constitution and direct that Jet Airways be taken in liquidation.
The NCLT, Mumbai shall now take appropriate steps for appointment of liquidator and all other nec essary formalities for commencement of liquidation of Jet Airways.” Faulting NCLAT for allowing JKC to adjust performance bank guarantee of ₹150 crore to meet the shortfall in the deposit of first tranche of ₹350 crore which was to be made good by May 22, 2022, the bench said for five years, the resolution plan has remained in limbo during which period several dues including airport dues to be paid by Jet Airways have increased due to the fault of JKC. “The court must ensure that such debts stop running at some point of time,” it said. The bench said although IBC was enacted to ensure survival of bankrupt entities, the same must not come at the cost of efficiency. Full report on www.toi.in
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