Legal counsel for lenders to the insolvent Jet Airways (JAI, Mumbai International) told India's Supreme Court last week that the would-be new owners, the Jalan-Kalrock Consortium (JKC), have failed to comply with any of the conditions set down to transfer ownership and that the court-approved resolution plan should be set aside. However, counsel for JKC say the lenders have simply changed their mind about the resolution plan and think they would get a better return by selling off assets.

The lenders are in court appealing a March 2024 National Company Appellate Law Tribunal ruling that upheld a 2023 NCLT decision ordering the ownership transfer, per the original resolution agreement. That decision came after two years of legal battles.

N Venkataraman, appearing for the lenders, told India's top court on September 26, 2024, that the drawn-out proceedings were a "gross abuse" of the country's bankruptcy and insolvency regime. "Enough is enough," the Mint outlet reports him saying. "The court must make it clear that the Insolvency and Bankruptcy Code is not for abuse but a genuine facilitator for takeovers. Operators like this cannot come and play with the courts."

"The (leader lender) State Bank of India (SBI) believes that they will get more money by selling the assets than what they will get under the plan," JKC's counsel Mukul Rohatgi told the court in a hearing on October 1. "They haven't lifted a finger to help... SBI has created hindrances every step of the way."

Jet Airways ceased operations in 2019. In mid-2021, a resolution plan submitted by Murari Lal Jalan and Florian Fritsch of Kalrock Capital Partners Ltd was approved by India's specialist bankruptcy court, the National Company Law Tribunal (NCLT). Under the plan's terms, agreed to by lenders, ownership of Jet Airways would transfer to JKC contingent upon it making good on a series of payments, which, according to the lenders, the consortium has not done. Consequently, the lenders have refused to sign the release certificate allowing the ownership transfer to happen, and the matter has become bogged down in litigation.

Venkataraman told the court that his clients, led by the State Bank of India, had only received INR2 billion rupees (USD23.9 million) out of the INR47.83 billion (USD571.5 million) promised per the resolution plan and payable over five years. "We are struggling to get the first tranche of INR3.5 billion (USD41.8 million)," he said. In addition, Venkataraman said airport dues of INR4.75 billion (USD56.8 million) and employee dues of INR2.89 billion (USD34.5 million) remain unpaid.

"The consortium doesn't have an airworthiness certificate," Venkatraman said. "They don't even have a security clearance." Rohatgi said this was because the consortium does not yet have control of the company.

Heading the three judge bench hearing the matter, Chief Justice D.Y. Chandrachud questioned why JKC had failed to deposit a INR1.5 billion (USD17.9 million) payment with the lenders in January, as ordered. ""We didn't give you an option," he told Rohatgi. "If you don't have it, then that means you are not compliant with the resolution."

The Supreme Court will continue hearing the lender's appeal on October 3.