Supreme Court refuses to interfere NCLAT's order on Payment of Dues to former employees of Jet Airways
The Supreme Court upheld the order passed by the National Company Law Appellate Tribunal’s (in short NCLAT) and refused
Supreme Court refuses to interfere NCLAT's order on Payment of Dues to former employees of Jet Airways
The Supreme Court upheld the order passed by the National Company Law Appellate Tribunal's (in short NCLAT) and refused to hear the plea filed by Jalan Fritsch consortium, the successful bidder of debt-laden Jet Airways.
The NCLAT order had directed to clear the unpaid provident fund and gratuity dues of Rs. 250 crore to the former employees of the grounded airline.
Chief Justice DY Chandrachud while refusing to interfere with the NCLAT's order stated, "anyone stepping in would know that there are overriding labour dues. There has to be a finality. We will not interfere."
Senior Counsel Saurabh Kripal representing the consortium, stated that an extra Rs. 200 crore of investment would make it difficult to revive the airline. He argued that the resolution plan once approved cannot be modified or taken back.
The plea moved by the Jalan Fritsch consortium stated that the Appellate Tribunal had dismissed the consortium's prayer to cap its payment liability at Rs. 475 crore under the approved resolution plan. Since the provident fund and gratuity dues were not part of the approved resolution plan, which had classified only Rs. 52 crore (out of total Rs. 475 crore kept for settlements to all stakeholders) toward payment of employees dues, there has been a tussle over unpaid dues since November.
In October 2020, the resolution plan submitted by the consortium of the UK's Kalrock Capital and the UAE- based entrepreneur Murari Lal Jalan, the airline's committee of creditors had approved the resolution plan.
Meanwhile, the NCLT Mumbai had approved the Jalan-Kalrock Consortium's (in short JKC) resolution plan in June 2021, it had earlier this month approved the transfer of ownership of the bankrupt airline to the winning bidder. The ownership currently stays with the monitoring committee comprising Jet's lenders, JKC executives and the resolution professional.
JKC is said to spend Rs. 1,375 crore to Rs. 900 crore as capital infusion and Rs. 475 crore to paid to creditors, out of which Rs. 380 crore will be paid to financial creditors. It is reported that JKC will have eighty-nine per cent stake while nine per cent shall be vested with the lenders.