NCLT MUMBAI IN JET AIRWAYS CASE: REVIEW OR RECONSIDERATION IS IMPERMISSIBLE IN LAW

NCLT MUMBAI IN JET AIRWAYS CASE: REVIEW OR RECONSIDERATION IS IMPERMISSIBLE IN LAW

An application under Rule 11 of NCLT Rules, 2016 was sought before The National Company Law Tribunal Court, Mumbai Bench on 8th October, 2020 before the two Judges Bench comprising of Hon'ble Member (Judicial), Janab Mohd. Ajmal and Hon'ble Member (Technical), Shri V. Nallasenapathy.

The Bhartiya Kamgar Sena and Jet Airways Cabin Crew Association (applicants) had filed an application against an order passed on 11th June, 2020 praying for some part of sale proceeds be distributed towards the employees of the Corporate Debtor and some reasonable amount be released to the employees of the Jet Airway.

The Applicants submitted that they are the employees of Jet Airways (India) Limited, the Corporate Debtor against whom Corporate Insolvency Resolution Process ("CIRP") was ordered by this Tribunal on 20th June, 2019 and that in response to the invitation of claims from the creditors by the Resolution Professional ("RP") the members of the Applicants' Associations filed claims before the Resolution Professional and the said claims are pending.

The Applicants asserted that the observation made by this Tribunal on 8th January, 2020 depicts the concern for the employees and their livelihood and it is expected from 'Respondent 1' Ashish Chhawchharia, (Resolution Professional for Jet Airways) & 'Respondent 2' Committee of Creditors of Jet Airways (India) Ltd. (COC) to act upon immediately by releasing some reasonable funds for the employees and to secure their livelihood until the Resolution Process is successfully completed.

The Applicants submit that R1 & R2 not only conveniently ignored the order dated 8th January, 2020 but also never pointed out this Order at the time of hearing by the Principal Bench of this Hon'ble Tribunal. It is submitted that when a part of the amount of the proposed sale proceeds is distributed among the Applicants, no prejudice will be caused to either HDFC ('Respondent 3') or US Exim Bank or R1 & R2.

R1 defended that it had received the permission of this Bench to sell the non-core asset of the Corporate Debtor, at Mumbai Suburban District ('said Premise'), in order to make payment of USD 13 Million to US Exim Bank so that six Aircrafts worth around USD 100-120 Million can be released by the US Exim Bank for utilisation by the Corporate Debtor.

Since there was no other source of finance for making payment to US Exim Bank, the 'COC' decided to sell this property and accordingly permission of NCLT Principal Bench was obtained by an order dated 11th June, 2020. It was also contended by Respondent 3 that the aforesaid payment for workmen dues would have been paid from the realisation of the security interest over the premises for R3's claim which at that point would have only increased from Rs. 495 Crores.

The Respondent(s) are bound to take necessary steps to protect Corporate Debtor's title to the Aircrafts which are of substantial value by payment of USD 13 Million as per Section 25(1) of the Code and Regulation 29 of CIRP Regulation.

The bench after hearing counsel for Applicants and Respondent finally observed that "....there is no provision under the Insolvency and Bankruptcy Code, 2016 and the National Company Law Tribunal Rules, 2016 for review or reconsideration of the order passed by the Adjudicating Authority."

The reliefs sought were for interim payment to the employees of the Applicants Associations, whereas there is no provision in the Code for payment to any creditors including these Applicants when the CIRP is under progress.

Hence the contention of the Applicants that this Tribunal can invoke Rule 11 of NCLT Rules 2016 for modifying the Order passed by this tribunal which is appealable and on which an appeal is pending before Hon'ble NCLAT cannot be accepted and application was dismissed.