Jet Airways Lenders Move Supreme Court Against NCLAT Order Upholding Jalan-Kalrock Consortium RP
Jet Airways Lenders Move Supreme Court Against NCLAT Order Upholding Jalan-Kalrock Consortium RP
The matter will be heard on 26 April
The Jet Airways lenders, including the State Bank of India (SBI), have approached the Supreme Court challenging the National Company Law Appellate Tribunal’s (NCLATs) order, which upheld the resolution plan (RP) proposed by the Jalan-Kalrock Consortium (JKC).
A bench of Chief Justice of India DY Chandrachud and Justice JB Pardiwala issued the notice on the plea and listed the matter for hearing on 26 April. This was done on behalf of the lenders’ counsel, senior advocate CS Vaidyanathan.
On 13 January, the Mumbai bench of the National Company Law Tribunal (NCLT) allowed the Consortium of Murari Lal Jalan and Florian Fritsch, the successful RP applicants, to take over Jet Airways India.
The tribunal allowed JKC to infuse funds into the bankrupt airline, take over its control and management, and execute the necessary documents to implement the approved RP. It granted an additional six months to the Consortium to pay the lenders, including the creditors and employees, stating that it was done to meet justice and to achieve the primary objective of the maximization of Jet Airlines’ assets.
However, the lenders opposed the move and sought a two-week stay on the order, which the tribunal turned down.
Thereafter, the lenders approached the NCLAT, which upheld the NCLT order. Aggrieved by it, they approached the apex court.
In 2019, on an application by the Consortium, the NCLT initiated the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code (IBC). Ashish Chhawchharia was appointed as the resolution professional to monitor the process.
Jet Airways owed over Rs.8,000 crores to the lenders. The airline had a debt of accumulated losses worth Rs.13,000 crores, vendor dues of over Rs.10,000 crores and salary dues of over Rs.3,000 crores.
The Jalan-Kalrock Consortium successfully bid for the airline company. The Consortium included Jalan, who held shares in his capacity, and Fritsch, who held shares through his investment holding company, Kalrock Capital Partners.
JKC deposited bank guarantees of Rs.150 crores in compliance with the approved RP, effective 20 May 2022.
The Consortium must make cash payments of Rs.185 crores to the financial creditors and will infuse Rs.1,375 crores to pay the other stakeholders and Rs.900 crores for the capital expenditure.
