Jet Airways case: Jalan Kalrock has no intention to implement resolution plan, lenders in SC filing

Jet Airways

Lenders of the grounded airline Jet Airways told in a Supreme Court filing that the airline's Successful Resolution Applicant (SRA) Jalan Kalrock Consortium has no intention to implement the National Company Law Tribunal (NCLT) approved resolution plan.

"Their inaction in implementing the Resolution Plan and instead creating various hurdles goes to indicate that Jalan Kalrock has no intention whatsoever to implement the Resolution Plan," the filing said.

The filing further alleges that Florian Fritsch, JKC 's foreign partner has never come forward or even met the lenders at any stage though requested by Lenders.

According to the filing, which Moneycontrol has reviewed, "The financial package offered by SRA in the Resolution Plan is Rs 4,783 crore, which is payable in tranches in 5 years. The appellants, at present, are struggling to get even an amount of Rs 350 crore towards first tranche payment, even after 2 years of the approval of the resolution plan."

Furthermore, the lenders have alleged that Jalan Kalrock Consortium (JKC) was supposed to infuse Rs 350 crore in the first tranche, but has managed to infuse only Rs 200 crore and adjusted the rest from an existing bank guarantee. It has also been alleged that an entity other than JKC paid Rs 13 crore.  The filing noted that the financial creditors are not getting a single penny from this infusion.

The lenders have stated that JKC's delay in infusing funds has cost them heavily as they have spent Rs 386.72 crore excluding airport dues towards maintaining  Jet Airways. The filing states "JKC is not serious and has not taken appropriate steps to meet their obligations as per the Resolution Plan, approved on June 22, 2021.

The lenders in their filing cited various instances which in their opinion are instances where JKC has sought an extension instead of making payments.

According to the lenders, Florian Fritsch, JKC 's foreign partner "has never come forward or even met the lenders at any stage though requested by the lenders."

The lenders have stated that they have learnt of the fact that Fritsch has been subject to investigation for serious fraud, breach of trust and money laundering by regulatory authorities in three jurisdictions namely Lichtenstein, Austria and Switzerland.

Owing to this, they have filed an application at the National Company Law Tribunal (NCLT) Mumbai to ask JKC to disclose their source of funds and to

resubmit an affidavit confirming their eligibility and continued compliance.

Jet Airways' lenders are fighting against JKC at NCLT Mumbai, NCLAT and the Supreme Court on various issues.

The latest case filed by the lenders at the SC challenges an NCLAT order, which permitted JKC time to September 30 to make Rs 350 crore payment to the lenders. SC is set to hear this case on October 12.

On  October 4, the lenders questioned the source of the Rs 200 crore JKC deposited during a hearing at NCLAT.  NCLAT is expected to hear the case on October 12.

In May 2023, the NCLAT granted Jalan Kalrock Consortium, which emerged as a successful bidder to take over Jet Airways, more time to make payments to the State Bank of India (SBI).

On January 13, NCLT allowed the transfer of the beleaguered airline to the consortium led by London-based Kalrock Capital and UAE-based entrepreneur Murari Lal Jalan.

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 Committee of Creditors approved the revival plan submitted by the Jalan-Kalrock consortium.