Supreme Court invokes plenary powers, orders liquidation of Jet Airways
The top court directed the NCLT (Mumbai) to commence the liquidation process and appoint a liquidator as early as possible.
by Krishnadas Rajagopal · The HinduA three-judge Bench headed by Chief Justice of India D.Y. Chandrachud invoked its plenary powers under Article 142 of the Constitution to order the liquidation of Jet Airways.
Justice J.B. Pardiwala, who authored the judgment, ordered the amount of ₹200 crore paid by Jalan Kalrock Consortium (JKC) towards the initial tranche payment of ₹350 crore to the creditors to be forfeited.
Justice Pardiwala said the fact that resolution plan had not progressed despite the lapse of five years was both “peculiar and alarming”.
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The court set aside the NCLAT direction to the lenders of Jet Airways to adjust the ₹150 crore paid by JKC the consortium as performance bank guarantee (PBG). The top court directed the NCLT (Mumbai) to commence the liquidation process and appoint a liquidator as early as possible.
The Supreme Court judgment was based on an appeal filed by State Bank of India-led consortium of creditors which had challenged the March 12 verdict of the NCLAT.
The NCLAT had upheld the resolution plan of the grounded air carrier and approved the transfer of its ownership to the JKC. It had further ordered the Jet Airways monitoring committee to complete the transfer of ownership within 90 days.
In its appeal before the apex court, the SBI consortium, which included the Punjab National Bank and JC Flowers Asset Reconstruction Private Limited, said the situation was a “nightmare” for the lenders.
The lenders described the NCLAT verdict of March 12 as “ shocking” and a deviation from the Supreme Court direction of January 18, 2024.
The judgment saw the court agree with the banks before ordering for the liquidation of the airline company. The court said it had no choice now and understood that “liquidation remains the last resort”.
The lenders had argued in the hearing that they were even bearing the burden of airport dues, which came to ₹1000 crore and ₹22 crore a month. Besides, the “clock [was] ticking” on the maintenance of aircrafts lying dormant on the tarmac before they turned junk.
The JKC denied the allegations, arguing that it had spent ₹700 crore to revive the airline and the lenders, keen on liquidation, was stonewalling its very move.
Published - November 07, 2024 12:35 pm IST