Jet Airways: NCLAT refuses to entertain Jalan Kalrock's plea to keep Rs 200 cr in escrow

NCLAT rejects JKC's plea

The National Company Law Appellate Tribunal (NCLAT) on May 28 refused to entertain an application by Jalan Kalrock Consortium (JKC) - the successful resolution applicant of the grounded airline Jet Airways - to keep the Rs 200 crore it had given to the lenders in 2023 in an escrow account till the shares in the airline are transferred.

JKC chose to withdraw the plea after the appellate tribunal opined that it was not inclined to entertain the plea. NCLAT opined that JKC could not have filed an application before it while an appeal against its order is pending in the Supreme Court.

During the course of the hearing, senior advocate Krishnendu Dutta, who appeared for JKC, argued that it is in the interest of both the parties to keep the money in an escrow account. However, Additional Solicitor General (ASG) Venkatraman who appeared for the vendors, vehemently opposed this plea and urged the appellate tribunal to dismiss it. According to the ASG, the NCLAT has already disposed the case and JKC was only trying to prolong the same by filing a fresh application.

The court asked JKC to either withdraw the plea or face its dismissal as it was not maintainable. JKC chose to withdraw the same.

On March 12, the NCLAT upheld the transfer of ownership of the grounded airline to JKC. The National Company Law Tribunal (NCLT) had already permitted the transfer of ownership to JKC back in January last year.

The appellate tribunal further directed the lenders to effect the transfer in 90 days, while asking JKC to obtain an air operator's certificate with in this window. The lenders have challenged this order in the Supreme Court.

In September 2023, the NCLAT permitted JKC to pay Rs 350 crore with the lenders. JKC paid Rs 200 crore in cash, and it asked the lenders to adjust Rs 150 crore from an existing bank guarantee. This led a round of litigation in the Supreme Court, whereby the apex court set aside the order and directed JKC to deposit Rs 150 crore in a designated bank account. 

The application JKC had moved sought to keep the Rs 200 crore it gave to the lenders in September 2023 in an escrow account till the lenders transfer all the shares in the airline.

SC is expected to hear the case on July 16.