India's Supreme Court has reserved its judgement on a plea by the State Bank of India and other creditors of Jet Airways (Mumbai International) to overturn a National Company Law Appellate Tribunal decision upholding the airline's resolution plan and ownership transfer to the Jalan Kalrock consortium (JKC).
The creditors want India's top court to exercise its powers under Article 142 of the country's constitution and order the airline's liquidation, saying that the resolution plan has failed. Jet Airways ended operations in 2019. In 2021, the National Company Law Tribunal cleared JKC to buy the airline after the parties had agreed to a resolution plan, also ratified by the court, to serve as a roadmap for the sale process.
The plan was contingent on JKC meeting certain conditions, which the banks and other creditors say it has failed to do. The ownership transfer has subsequently become bogged down in litigation and has failed to finalise.
A three-judge panel declined to decide on the matter during an October 16 hearing and bound it over to a yet-to-be-determined date. Other parties appealing the NCLAT decision included the Punjab National Bank and JC Flowers Asset Reconstruction Private Limited.
Counsel for the lenders told the court this week that JKC had defaulted on the prescribed payments and the agreed-to resolution plan had "failed miserably". Counsel for the consortium said the banks now want to liquidate Jet Airways rather than sell it and said they are deliberately hindering the sale.
The Supreme Court may decide JKC has stuck to the terms of the resolution plan and is entitled to take ownership of Jet Airways. Alternatively, it may decide the consortium has not abided by the terms and void the resolution plan, paving the way for either a new one or the airline's liquidation.
The matter, the State Bank of India v. the Consortium of Mr Murari Lal Jalan and Mr Florian Fritsch (case no: 005023 - 005024/2024), is expected to be back in court within the next week.
