Jalan Kalrock Consortium (JKC), which was handed over the grounded air carrier Jet Airways, on Tuesday informed the Supreme Court that the creditors had delayed the resolution process by raising pleas at every stage of compliance. The National Company Law Appellate Tribunal (NCLAT) on March 12 had upheld the resolution plan of the grounded air carrier and approved the transfer of its ownership to the consortium.
A bench comprising Chief Justice D Y Chandrachud and Justices JB Pardiwala and Manoj Misra was hearing an appeal of State Bank of India, Punjab National Bank and JC Flowers Asset Reconstruction Private Limited challenging the March 12 verdict of the NCLAT.
The NCLAT had directed the Jet Airways monitoring committee to complete the transfer of ownership within 90 days.
The consortium, having won the bid to revive the once-grounded airline, is facing a complex legal battle over the compliance with the resolution plan.
Additional Solicitor General N Venkatramani, appearing for the appellant banks and others, had submitted that the successful resolution applicant (SRA) had defaulted on payments prescribed under the resolution plan.
The law officer had said that the consortium was four years behind on its payment schedule at the moment.
Senior advocate Mukul Rohatgi, appearing for the consortium, represented by law firm Karanjawala and Company, said that the creditors had delayed the resolution process.
The bench questioned the compliance and merits of the SRA’s performance under the resolution plan.
It sought a clarification on why the consortium had not complied with the court’s previous directives, specifically the infusion of funds in cash and the execution of the Performance Bank Guarantee (PBG).
Rohatgi said the revival of Jet Airways was a commercial endeavour, subject to various external factors and the consortium cannot be held solely responsible for delays caused by security clearances and other procedural hurdles.
He said the creditors had obstructed the resolution process at every stage, causing the consortium to incur more than Rs 600 crore in losses.
The bench will resume the hearing on October 16.
The NCLAT, in its verdict, had approved the transfer of its ownership to the consortium by upholding the NCLT Mumbai’s verdict of January 13, 2023.
The NCLAT had also directed the lenders of Jet Airways to adjust the Rs 150 crore paid by the consortium as PBG.
“The PBG of Rs 150 crore, which is lying with the monitoring committee/MC lenders, shall be adjusted towards the first tranche payment of Rs 350 crore as Rs 200 crore have already been paid by the SRA (JKC). By adjustment of PBG as per the resolution plan, the first tranche of payment of Rs 350 crore shall be completed,” it had said.
Jet Airways, which has remained grounded since April 2019, had in September, 2023, said the new proposed promoters — the Jalan-Kalrock consortium — had completed an additional infusion of Rs 100 crore into the carrier.
With this infusion, it had said, JKC has fulfilled its total financial commitment of Rs 350 crore equity as per the court-approved resolution plan.
The consortium has fulfilled all other commitments to take control of the airline, it had added.
The airline had also said it was looking to re-launch operations from 2024.
After grounding in 2019 owing to a severe liquidity crisis at that time, the full-service carrier underwent an insolvency resolution process. However, it was having a dispute with the lender.
In 2021, JKC emerged as the successful bidder of Jet Airways.
