The Supreme Court has set aside an order National Company Law Appellate Tribunal and ordered the liquidation of Jet Airways’ assets. The three-member bench rapped the NCLAT for its order and observed the appellate body acted against settled legal principles.
The court issued the judgement, invoking ‘extraordinary’ powers under Article 142 to set aside a tribunal’s decision to uphold a resolution plan and transfer ownership – to the Jalan-Kalrock Consortium – without full payment to creditors. Article 142 allows the court to make orders for ‘complete justice’ in any pending matter.
Pronouncing the verdict, a three-member bench comprising Chief Justice D.Y. Chandrachud and Justices J.B. Pardiwala and Manoj Misra set aside NCLAT’s verdict approving the resolution plan of the grounded airline and transfer of ownership to Jalan Kalrock Consortium (JKC).
“Liquidation must be available to lenders as a last resort… since resolution plan is no longer capable of implementation,” said Chief Justice DY Chandrachud and Justices JB Pardiwala and Manoj Misra said, allowing a plea by creditors, including the State Bank of India and the Punjab National Bank.
The court said liquidation would best serve the interests of creditors, workers and other stakeholders, and also rapped the National Company Law Appellate Tribunal for its decision.
Jet Airways was grounded in 2019 owing to financial issues. The airline’s creditors led by the State Bank of India moved the National Company Law Tribunal and initiated insolvency proceedings. In 2021, Jalan Kalrock Consortium–a consortium led by UAE-based entrepreneur Murari Lal Jalan and UK-based Kalrock Capital–emerged as the successful bidder for the airline’s revival.
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