In a landmark decision, the Supreme Court ordered the liquidation of the defunct carrier Jet Airways, overturning a previous decision that had approved the transfer of ownership to the Jalan Kalrock Consortium (JKC). The ruling, delivered by a bench led by Chief Justice of India DY Chandrachud, comes as a significant blow to the revival plans laid out during the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code (IBC).
The National Company Law Appellate Tribunal (NCLAT) had earlier upheld the transfer, marking a promising turn for JKC, a consortium led by UAE-based entrepreneur Murari Lal Jalan and UK-based Kalrock Capital. However, the Supreme Court has now deemed the NCLAT’s order as “perverse,” pointing out that it misrepresented evidence. The bench highlighted the specific mismanagement around the required performance bank guarantee of ₹150 crores, which JKC had failed to settle in accordance with the ₹350 crores stipulated in the resolution plan.
The apex court observed that the non-compliance and failure to meet financial commitments led to the failure of the resolution process. “NCLAT acted against settled legal principles,” the bench noted. It further emphasized that the terms of the resolution plan had been contravened by JKC, rendering the plan unimplementable. “Since the resolution plan is not possible to be implemented, we have to ensure that liquidation remains an option for the corporate creditor,” the judgment read.
Directing the National Company Law Tribunal in Mumbai (NCLT) to appoint a liquidator immediately, the Supreme Court exercised its plenary powers to mandate the liquidation process. This directive effectively sets aside the previous order of the NCLAT and comes as a culmination of a protracted legal battle involving the airline’s lenders, led by the State Bank of India (SBI), who had challenged the ownership transfer in the apex court.
Jet Airways, which ceased operations in 2019 due to severe financial distress, saw initial hopes of revival when JKC was declared the successful bidder in 2021. Despite the NCLT’s conditional approval of the ownership transfer, disputes over the fulfilment of preconditions—particularly regarding financial commitments and the acquisition of an air operator’s certificate—led to a complex litigation trajectory.
This Supreme Court verdict marks a conclusive end to the ongoing disputes and directs the forfeiture of ₹200 crores while allowing lenders to encash the performance bank guarantee. The ruling underscores the complexities of corporate insolvency resolutions and sets a precedent for the handling of high-stakes liquidations in the Indian aviation sector.
