MUMBAI- On July 28, the Jet Airways (9W) Jalan Kalrock Consortium (JKC) informed the National Company Law Appellate Tribunal (NCLAT) that despite obtaining all the necessary permissions from the government, the Committee of Creditors (CoC) is preventing them from initiating operations.
JKC stated that they acquired the Air Operator’s Certificate (AOC) for a one-year period starting from 2022-23. However, due to constant objections from the CoC regarding the ownership transfer at each stage, they were unable to commence their operations.
Jet Airways JKC Vs Creditors NCLAT Case
Krishnendu Dutta, the consortium’s Senior Advocate, conveyed to the appellate tribunal that if the airline did not begin its operations promptly, the slots they acquired would be reassigned to other parties.
JKC expressed to the court that they find themselves uncertain due to ongoing litigation pursued by DGCA against them in multiple forums.
The Committee of Creditors (CoC) is presenting contradictory positions in different forums, and the consortium urges the NCLAT to settle the matter regarding their ownership decisively.
Representing the CoC, ASG Venkatraman contended that the National Company Law Tribunal (NCLT) had allowed JKC to take ownership of Jet Airways based on specific conditions. However, the consortium has failed to meet any of these conditions.
ASG informed the court that JKC has not injected the necessary funds nor initiated operations.
Moreover, the validity of the AoC has been extended for a limited period, and its renewal by DGCA after September remains uncertain.
Due to JKC’s failure to fulfill its obligations and the impending expiration of permits and certificates, the Supreme Court was approached for the liquidation of Jet Airways to be considered, as restarting operations might not be feasible.
After listening to both parties, the tribunal agreed to initiate the hearing of the case on August 7th.
CoC says Airline Should be Liquidated
The CoC informed the Supreme Court on July 10 that the airline should be liquidated as the resolution plan approved by the NCLT was not feasible.
Once a company is admitted to insolvency, a CoC is formed, representing the interests of stakeholders. The voting power in this committee is proportionate to the financial institution’s lending to the insolvent company.
On July 5, the CoC stated in court that they had already spent Rs 470 crore since the implementation of the Corporate Insolvency Resolution Process (CIRP) without any return on investment. They also mentioned incurring monthly expenses of Rs 23 crore.
The Jet Airways Workmen Association supported the CoC’s stance and informed the court that they had not received their dues.
In April 2019, Jet Airways suspended its operations due to escalating losses and an accumulated debt of approximately Rs 8,000 crore. Subsequently, in October 2020, the Jalan-Kalrock consortium’s revival plan was approved by the airline’s CoC.
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