The Jalan Kalrock Consortium (JKC), the winning bidder for the revival of the grounded airline Jet Airways, voiced concerns in the Supreme Court on Tuesday, claiming that creditors have been obstructing the resolution process through continuous legal challenges at every step.
During the hearing, a bench led by Chief Justice D.Y. Chandrachud, along with Justices J.B. Pardiwala and Manoj Misra, examined the ongoing appeal by major creditors including State Bank of India, Punjab National Bank, and JC Flowers Asset Reconstruction Private Limited. These banks challenged the National Company Law Appellate Tribunal’s (NCLAT) March 12 decision that approved JKC’s takeover of Jet Airways.
The NCLAT had previously directed the Jet Airways monitoring committee to ensure the transfer of ownership within 90 days. However, complexities arose as creditors disputed various aspects of compliance with the resolution plan approved by the tribunal.
Represented by senior advocate Mukul Rohatgi and law firm Karanjawala and Company, JKC argued that the repeated legal interventions by creditors had not only delayed the process but also led to significant financial losses exceeding Rs 600 crore.
Additional Solicitor General N Venkatramani, representing the appellant banks, countered by alleging that JKC had defaulted on its payment obligations under the resolution plan, noting a current delay of four years in the scheduled payments.
The court sought clarity on JKC’s failure to comply with earlier directives, particularly concerning the infusion of funds and the execution of the Performance Bank Guarantee (PBG). In response, Rohatgi emphasized the commercial nature of the airline’s revival, which he said was hampered by external factors like security clearances and other procedural issues, asserting that the consortium could not be solely blamed for the delays.
The NCLAT, affirming the decision of the NCLT Mumbai from January 2023, also directed the lenders to adjust Rs 150 crore paid by JKC as PBG towards the first tranche of payment of Rs 350 crore, of which Rs 200 crore had already been paid.
Jet Airways, which ceased operations in April 2019 due to a severe liquidity crisis, had announced in September 2023 that the Jalan-Kalrock consortium completed an additional infusion of Rs 100 crore. This move marked the fulfillment of JKC’s financial commitment of Rs 350 crore in equity, as stipulated in the court-approved resolution plan.
