Jet Airways Ownership Transfer: NCLAT Approves Jalan Kalrock Consortium Takeover

The National Company Law Appellate Tribunal (NCLAT) has upheld the resolution plan for grounded carrier Jet Airways, paving the way for the transfer of its ownership to the Jalan Kalrock Consortium. The NCLAT bench, comprising two members, directed the Jet Airways monitoring committee to complete the transfer of ownership within 90 days.

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Approval of Resolution Plan

The NCLAT upheld the impugned order passed by the Adjudicating Authority NCLT Mumbai on January 13, 2023, which had approved the resolution plan submitted by the Jalan Kalrock Consortium. The consortium had offered a resolution plan to revive the airline and clear its debts.

Adjustments and Payments

The NCLAT directed the lenders of Jet Airways to adjust the Rs 150 crore paid by the consortium as a performance bank guarantee (PBG) towards the first tranche payment of Rs 350 crore. The consortium had already paid Rs 200 crore, and with the adjustment of the PBG, the first tranche payment will be completed.

The NCLAT also directed the monitoring committee and lenders of Jet Airways to take steps for the creation of a charge over the three Dubai-based properties within 30 days from the date of the order. Payments from the first tranche of Rs 350 crore shall be made to the workmen, employees, and creditors as per the resolution plan within 60 days from the date of the judgment.

Revival and Employment

The NCLAT emphasized the importance of implementing the resolution plan for the revival of Jet Airways and the positive impact it will have on employment generation and revenue creation. The tribunal noted that the non-implementation of the plan directly affects workers and employees who have not received their payments.

While acknowledging the lenders' right to protect their financial interests, the NCLAT stressed that the primary objective of the Insolvency and Bankruptcy Code (IBC) is the revival of the corporate debtor and payments to other stakeholders, including workmen and employees.

Dispute and Legal Tussle

The monitoring committee, comprising a consortium of lenders led by SBI, and the Jalan Kalrock Consortium were engaged in a legal tussle over the management handover. The NCLAT observed that the implementation of the resolution plan requires positive action from all parties, including the lenders.

The lenders had approached the Supreme Court, which declined to interfere in the matter and directed the NCLAT to take a decision on the issue. The NCLAT's order provides clarity and paves the way for the transfer of ownership and the revival of Jet Airways.

The NCLAT's approval of the Jet Airways resolution plan is a significant step towards the revival of the grounded carrier. The transfer of ownership to the Jalan Kalrock Consortium, subject to regulatory approvals, will enable the airline to resume operations and contribute to the aviation industry in India.