5 days Ago By Mid-day
The on Thursday exercised its extraordinary constitutional powers and ordered the liquidation of grounded air carrier Jet Airways' assets, reported news agency PTI. A bench of Chief Justice D Y Chandrachud and Justices J B Pardiwala and Manoj Misra set aside the National Company Law Appellate Tribunal (NCLAT) decision upholding the resolution plan of and approved the transfer of its ownership to Jalan Kalrock Consortium (JKC), reported PTI. Pronouncing the judgement for the bench, Justice Pardiwala allowed the plea of SBI and other creditors against the NCLAT decision that upheld the resolution plan of Jet Airways in favour of JKC.
It said the liquidation of the air carrier was in the interest of creditors, workers and other stakeholders. The bench rapped NCLAT for its decision. The top court used its powers under Article 142 of the Constitution which gives it the power to make orders and decrees to ensure complete justice in any matter or cause pending before it, reported PTI.
The NCLAT on March 12 upheld the resolution plan of the grounded air carrier and approved the transfer of its ownership to JKC. The SBI, (PNB) and JC Flowers Asset Reconstruction Private Limited have challenged the NCLAT verdict. In January this year, the Supreme Court ordered JKC, the successful resolution professional bidder for the cash-strapped airline, to deposit Rs 150 crore in an escrow account jointly held by the State Bank of India and JKC, reported IANS.
It had cautioned that legal consequences would follow if the JKC failed to furnish the bank guarantee. It had also asked the NCLAT to decide by the end of March 2024 on the lenders' plea challenging the ownership of the grounded Airways to JKC, reported IANS. The consortium had undertaken an infusion of Rs 350 crore equity per the court-approved resolution plan to assume ownership of Jet Airways, reported IANS.
A three-member bench of the NCLAT had agreed to an adjustment of Rs 150 crore from the Performance Bank Guarantee (PBG) towards the payment of Rs 350 crore, reported IANS. The appellate tribunal had also accepted an undertaking given by the consortium committing to pay Rs 100 crore by August 31 last year and another Rs 100 crore by September 30, 2023. Due to severe financial distress, Jet Airways, once one of India's largest and most popular airlines, entered the corporate insolvency resolution process under the Insolvency and Bankruptcy Code (IBC) in June 2019.
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