In a set back for Jalan Kalrock Consortium (JKC), the successful resolution professional of the grounded airline Jet Airways, the Supreme Court on January 18 directed it to deposit Rs 150 crore by January 31 (two weeks from now).
The amount is to be kept in an escrow account between State Bank of India and JKC.
The apex court has held that in case JKC does not furnish the bank guarantee, the consequences of law will follow. The NCLAT will now have to decide the appeal by State Bank of India challenging the transfer of Jet Airways' ownership to JKC by end of March 2024.
The court has thus set aside the order of National Company Law Appellate Tribunal (NCLAT) from August 2023, permitting JKC to adjust of Rs 150 crore from an existing performance bank guarantee for infusing Rs 350-crore payment. As per the consortium's undertaking, they will pay Rs 100 crore by August 31, Rs 100 crore by September 30, and the remaining Rs 150 crore will be adjusted from an already existing performance bank guarantee.
The lenders of the airline had vehemently contested against the NCLAT permitting JKC to adjust the Rs. 150 crore bank guarantee on the ground that was a back up and cannot be utilised at this stage.
On August 18 2023, when the consortium proposed the payment schedule, the appellate tribunal asked it to file an application to this effect in 24 hours. The CoC told the appellate tribunal that they may choose not to pursue the appeal against the transfer of the airline's ownership to the Jalan Kalrock Consortium if it pays Rs 350 crore towards fulfilling condition precedents.
The lenders form a part of committee of creditors, which is formed once a company is admitted to insolvency. It is a body of financial creditors that represents the interest of stakeholders. The voting percentage in the panel is proportional to the amount a financial institution has lent to the company in insolvency.
On January 13 2023, NCLT allowed the transfer of the beleaguered airline to the consortium led by London-based Kalrock Capital and UAE-based entrepreneur Murari Lal Jalan. However, the CoC took it to NCLAT opposing the transfer.
Jet Airways was grounded in April 2019 over growing losses and a debt of about Rs 8,000 crore. In October 2020, the airline's CoC approved the revival plan submitted by the Jalan-Kalrock consortium.
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