SC junks Jalan Kalrock appeal against sale of Jet Airways aircraft

Another set back for JKC as SC junks its plea

The Supreme Court on March 7 dismissed a plea by Jalan Kalrock Consortium (JKC), the successful resolution applicant that is tasked to revive Jet Airways, challenging the National Company Law Appellate Tribunal (NCLAT) order permitting the sale of aircraft belonging to the grounded airline.

A bench led by Justice Abhay Sriniwas Oka noted that they did not find anything wrong with the NCLAT order. The court noted that it would in fact benefit JKC as the sale would infuse more funds. 

During the course of the arguments, JKC urged the court to keep the case pending till the NCLAT decides the issue of ownership of Jet Airways as the NCLAT has reserved the case for judgment. However, the court expressed its disinclination to entertain the plea. Three aircrafts belonging to the grounded airline are to be sold to a Malta based company called Ace Aviation. 

In December 2023, the NCLAT dismissed an appeal by JKC noting that the sale of aircraft do not affect the rights of any of the stakeholders in the airline as the sale proceeds will be deposited in an escrow account. The proceeds will subsequently be distributed in accordance with the resolution plan.

The process of sale of three aircraft for Rs 400 crore was put on hold in November 2022 owing to a deadlock in the monitoring committee comprising representatives of the financial creditors, the successful resolution applicant (JKC) and the resolution professional. It emerged that while the airline's lenders were agreeable for the sale of the aircraft, the consortium and the erstwhile workmen were opposed to it.

According to the workmen, the aircraft could not be sold as they have a lien over the aircraft towards non-payment of their gratuity and provident fund dues.

Ace aviation approached NCLT against this deadlock. In October 2023,  NCLT told the committee: "Reinitiate the process and conclude the sale of the aircraft after taking into consideration the applicant as one of the eligible bidders."