The Supreme Court of India has ordered the liquidation of Jet Airways under the Insolvency and Bankruptcy Code (IBC), overturning an earlier ruling by the National Company Law Appellate Tribunal (NCLAT) that had allowed the transfer of the defunct airline to the Jalan Kalrock Consortium (JKC).
Background on Jet Airways’ Financial Struggles and Ownership Dispute
Jet Airways ceased operations in 2019 due to severe financial distress, prompting the State Bank of India (SBI) to initiate insolvency proceedings. In 2020, a resolution plan submitted by the Jalan Kalrock Consortium—a partnership between UAE businessman Murari Lal Jalan and UK-based Kalrock Capital—was approved by the Committee of Creditors (CoC) as the airline’s prospective buyer. The NCLT approved the plan with conditions, including securing an air operator certificate and settling dues, estimated at Rs 8,000 crore.
Supreme Court’s Decision to Liquidate
The Supreme Court ruled that JKC had not met its financial commitments, specifically the required Rs 150 crore, part of the initial Rs 350 crore meant to cover worker dues and airport charges. This non-compliance led the court to determine that liquidation was the best course for the airline. The court also criticized NCLAT for failing to fully assess JKC’s financial readiness.
Previous Legal Proceedings and Challenges
Despite NCLT and NCLAT approvals for the consortium, lenders—led by SBI—contested the takeover due to unmet conditions. When the NCLAT upheld JKC’s ownership in March 2023, it directed JKC to secure an air operator certificate within 90 days and allowed access to Rs 150 crore of its bank guarantee. However, lenders escalated the issue to the Supreme Court, arguing that JKC had no genuine intention to fulfill its obligations, including airport dues of Rs 1,100 crore.
Supreme Court’s Final Ruling Using Article 142
After reviewing the case, the Supreme Court invoked its authority under Article 142 to order Jet Airways’ liquidation, officially ending attempts to revive the airline after years of legal battles.
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