DELHI- In a significant development that could lead to an early resumption of flight operations for Jet Airways, the National Company Law Appellate Tribunal (NCLAT) affirmed, on March 12, the transfer of ownership of the grounded airline to Jalan Kalrock Consortium (JKC).
This decision comes after the National Company Law Tribunal (NCLT) had already granted approval for the ownership transfer to JKC in January of the previous year.
Jet Airways: NCLAT Upholds JKC Ownership
The appellate tribunal has now directed the lenders to facilitate the transfer within the next 90 days, simultaneously urging JKC to secure an air operator’s certificate within this timeframe.
Additionally, the NCLAT has permitted JKC to deduct Rs. 150 crores from its bank guarantee to offset the initial installment of Rs. 350 crores owed to the lenders.
For more than a year, Jalan Kalrock Consortium (JKC) and the lenders of Jet Airways have been embroiled in a legal dispute regarding the airline’s ownership transfer to the successful bidder.
In January, while refraining from intervening in other matters, the Supreme Court overturned the NCLAT’s decision that allowed JKC to offset Rs 150 crore from its bank guarantee.
Grounded Since 2019
Jet Airways, grounded in 2019 due to escalating financial challenges, faced insolvency proceedings initiated by its largest lender, the State Bank of India (SBI), before the NCLT Mumbai. The company was subsequently admitted to the resolution process. In 2021, JKC emerged as the successful resolution applicant with plans to revive the airline’s operations.
Amidst claims from JKC that the lenders hadn’t initiated the ownership transfer process and counterarguments from the lenders stating that JKC hadn’t injected any funds into Jet Airways, tensions persisted.
In February 2023, the lenders contested the NCLT’s order on ownership transfer, prompting them to approach the NCLAT. However, the NCLAT declined to issue an injunction favoring the lenders on the matter.
As the dispute between the lenders and JKC continued, the NCLAT, in September 2023, granted permission for JKC to use its Rs 150 crore performance bank guarantee to inject Rs 350 crore into Jet Airways.
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