The Supreme Court on Thursday directed the liquidation of Jet Airways, grounded since 2019, citing “peculiar and alarming” circumstances due to the unresolved implementation of the airline’s resolution plan for five years. A Bench led by Chief Justice DY Chandrachud, along with Justices JB Pardiwala and Manoj Misra, reversed an order by the National Company Law Appellate Tribunal (NCLAT) that transferred Jet Airways’ ownership to the Jalan-Kalrock Consortium (JKC).
The court allowed an appeal by the State Bank of India (SBI) and other creditors, who argued that the NCLAT had misinterpreted legal principles and improperly upheld the transfer to JKC. This decision underscores concerns regarding the Insolvency and Bankruptcy Code (IBC) and NCLAT’s procedures.
Using extraordinary powers under Article 142, the Supreme Court nullified NCLAT’s earlier decision to approve JKC’s resolution plan and ownership transfer without ensuring full creditor payments. The court stated that liquidation was the only viable option as JKC had failed to fulfill the plan terms five years post-approval.
Originally, NCLAT had permitted JKC’s acquisition of Jet Airways in March, setting deadlines for securing an air operator’s certificate and a ₹175 crore payment to SBI. However, JKC had only paid ₹200 crore of the ₹350 crore initial payment and failed to renew its Air Operator Certificate, which expired in September 2023.
SBI, Punjab National Bank, and JC Flowers Asset Reconstruction had challenged NCLAT’s decision, expressing concerns about outstanding payments and the expiration of regulatory approvals. This ruling concludes an extensive legal battle, signaling a liquidation path for Jet Airways in the absence of a viable resolution plan.
