Jet Airways case: NCLAT defers the hearing of plea by lenders to November 9

Jet Airways, JKC and NCLAT

The National Company Law Appellate Tribunal (NCLAT) on November 1 deferred the hearing of the appeal by the lenders of the grounded airline Jet Airways against the transfer of its ownership to the Jalan Kalrock Consortium (JKC) to November 9.

During today's hearing, Additional Solicitor General (ASG) Venkatraman, who represented the lenders, informed the appellate tribunal that the case was scheduled for a hearing at the Supreme Court on November 7. He requested the appellate tribunal to postpone the case's hearing until after November 7.

Appearing for JKC, senior advocate Krishnendu Dutta argued that the cases at the Supreme Court had no direct connection to the cases at NCLAT and suggested that the appellate tribunal could proceed with the hearing before November 7.

Despite this, NCLAT decided to adjourn the case to the second half of November 9.

On October 4, the lenders of the grounded airline Jet Airways informed NCLAT that Jalan Kalrock Consortium (JKC) had not fully complied with the resolution plan, specifically regarding the deposit of Rs 200 crore. According to the lenders, JKC was expected to make the entire payment through the consortium, but the money was also deposited from other sources. Additional Solicitor General Venkatraman expressed concerns about the source of the funds.

JKC, however, stated that it had fulfilled its total financial commitment of Rs 350 crore ($42.1 million) in equity, as per the court-approved resolution plan, and emphasized that all obligations from JKC had been met to take control of the iconic airline, according to a press statement issued by the airlines.

Jet Airways case so far:

On August 28, NCLAT permitted the consortium to pay Rs 200 crore by September 30 and permitted the adjustment of an existing bank guarantee towards Rs 150 crore.

Earlier in August, the lenders told NCLAT that they may choose to not pursue the appeal against the transfer of the airline's ownership to Jalan Kalrock Consortium if it pays Rs 350 crore towards fulfilling condition precedents. In May 2023,  NCLAT granted the consortium, which emerged as a successful bidder to take over Jet Airways, more time to make payments to the State Bank of India (SBI).

While the National Company Law Tribunal (NCLT) approved the transfer to Jalan Kalrock in January, the decision was challenged in NCLAT, which ruled in favour of the consortium on March 3, 2023.

Hence, Jalan Kalrock was entitled to exclude the November 16, 2022-March 3, 2023 period, during which the ownership hearing was on, to comply with the payment deadline.

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.

The lenders approached the NCLAT, opposing the ownership transfer, saying the consortium had not fulfilled its obligations.

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 (CoC) approved the revival plan submitted by the Jalan-Kalrock consortium.