NCLAT reserves order in Jet Airways plea challenging aircraft sale

JKC had challenged the National Company Law Tribunal (NCLT) order, which permitted the sale, asking the airline’s monitoring committee to proceed with it.

During the hearing, counsel for JKC argued that the NCLT’s order was beyond its jurisdiction. JKC disputed the effective date of the resolution plan’s implementation and insisted the sale should be halted until then. Once implemented, the sale process should go to the consortium rather than the airline’s monitoring committee.

Meanwhile, the airline’s workers oppose the sale, citing unpaid gratuities and provident fund dues, fearing the sale would harm their interests. The former Resolution Professional clarified that sale proceeds would go into escrow for equitable distribution.

The airline’s workers have also opposed the sale, citing unpaid gratuities and provident fund dues, fearing the sale would harm their interests. The former Resolution Professional of the airline has clarified that sale proceeds would go into escrow for equitable distribution.

Lenders, however, advocate the sale, stressing the urgency due to mounting airport dues and wastage of public funds. They informed the tribunal that they have incurred about ₹900 crore in airport dues, emphasizing the need for quick action.

On 29 September, JKC said it had fulfilled the financial commitment of ₹350 crore and the new promoters are determined to resume operations of the airline in 2024.

JKC had completed the transfer of money to the lenders as per NCLAT’s directive instruction. According to the payment schedule, approved by the NCLAT on 28 August, JKC was required to pay ₹200 crore to the lenders. The NCLAT had instructed them to pay the due amount of ₹350 crore by 30 September, with ₹150 crore to be encashed from the performance bank guarantee.

However, lenders voiced concerns about the consortium’s source of funding, hinting at potential money laundering on 4 October.

Jet Airways stopped flying in April 2019 after running into financial difficulties. However, ownership transfer has been hanging fire amid continuing differences between the lenders and the consortium. On 22 June 2021, the NCLT approved the resolution plan for Jet Airways.

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Published: 12 Dec 2023, 03:50 PM IST