New Delhi,7th Nov 2024:
By Aviation World Desk
In one of the biggest jolt to the Indian Aviation sector, the Supreme Court invoked its extraordinary powers under Article 142 of the Constitution to order the liquidation of Jet Airways in view of the “peculiar and alarming” circumstance that the resolution plan has not been implemented for five years.
NCLAT had earlier, upheld the transfer of ownership of the airline to the Jalan Kalrock Consortium (JKC) as part of the Corporate Insolvency Resolution Process (CIRP). The Supreme Court, while issuing an order observed that JKC failed to comply with the resolution as it failed to infuse Rs 150 crore, the first trench of Rs 350 crore to clear the outstanding of workers and airport among other essential costs. The latest judgement marks the end of the airline’s struggle to revive itself.The Court also directed the NCLT Mumbai Bench to appoint a liquidator forthwith and forfeit Rs 200 crores as paid by the Successful Resolution Applicant(SRA).
The Court set aside the NCLAT Order which allowed Jet Airways’ ownership transfer to the SRA without complete payment in accordance with the resolution plan.
The bench of CJI DY Chandrachud and Justices JB Pardiwala and Manoj Misra had reserved the judgment on October 16. The NCLAT order was challenged by SBI-led lenders of the cash-strapped Airlines.
“This litigation is an eyeopener, has taught us many lessons about the IBC and the functioning of NCLAT,” Justice Pardiwala orally said before the pronouncement.The Court held that the NCLAT order allowing the adjustment of the first tranche of payment of Rs 350 crores against the Performance Bank Guarantee (PBG) was in “flagrant disregard” of the order of the Supreme Court passed on January 18 and was “perverse.”
“We have no doubt that the NCLAT acted contrary to settled legal principles and it incorrectly interpreted our order,” the Court observed in the judgment.
