A bench of Chief Justice of India DY Chandrachud and justices JB Pardiwala and Manoj Misra upheld a plea by the State Bank of India (SBI) and other creditors
The Supreme Court on Thursday ordered the liquidation of Jet Airways while setting aside the National Company Law Appellate Tribunal (NCLAT) ruling that upheld the transfer of the defunct airline’s ownership to the Jalan-Kalrock Consortium (JKC) under an approved resolution plan.
A bench of Chief Justice of India Dhananjaya Y Chandrachud and justices JB Pardiwala and Manoj Misra upheld a plea by the State Bank of India (SBI) and other creditors challenging the NCLAT order. It said the court had to exercise its power under Article 142 to order the liquidation of the debt-ridden air carrier because of the five-year delay in the completion of the resolution process.
The judgment ends the protracted legal battle over Jet Airways, which was grounded in April 2019 due to financial distress. It followed deliberations on whether JKC, the successful resolution applicant, fulfilled its obligations and whether creditors acted within their rights by seeking liquidation.
The NCLAT ruling in March upheld the resolution plan for Jet Airways. It authorised JKC’s takeover and set a 90-day deadline for completing the transfer of ownership. The NCLAT directed the adjustment of a ₹150 crore performance bank guarantee by JKC.
The top court said this adjustment was “perverse” and in contravention of a previous order of January this year, the terms of the resolution plan, and settled principles of law.
The creditors, represented by SBI, Punjab National Bank, and JC Flowers Asset Reconstruction Private Limited, appealed to the Supreme Court, challenging the NCLAT’s March decision. They argued that JKC had not fulfilled key obligations, including the infusion of ₹350 crore within the required time frame and meeting other financial commitments, such as mortgaging properties in Dubai.
The top court said that JKC failed to fulfil its obligations and contravened the terms of the resolution plan by meeting the financial commitments. JKC, during the earlier proceedings, argued that procedural delays, including security clearances, obstructed its efforts. It said that JKC incurred significant losses, exceeding ₹600 crore, due to these delays and affirmed that the consortium had fulfilled its financial commitments, including an additional ₹100 crore infusion as recently as September 2023.
In 2021, JKC won the bid to revive the airline, and Jet Airways then indicated a potential relaunch in 2024.
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