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Jet Airways Case: NCLAT gives Jalan Kalrock Consortium more time to pay dues to SBI

May 26, 2023 / 05:08 PM IST

On May 22, the tribunal had reserved its order on a plea by Jalan Kalrock Consortium, seeking directions to stop the State Bank of India from invoking its performance bank guarantee of Rs 150 crore

Jet Airways

The National Company Law Appellate Tribunal (NCLAT) on May 26 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).

The appellate tribunal has noted that despite National Company Law Tribunal (NCLT) having approved the resolution plan in January, the case came to be heard by the NCLAT in March and an order of refusal of stay was passed on March 3, hence the tribunal held that Jalan Kalrock is entitled to an exclusion from November 16 2022 to March 3, 2023 from complying with payment obligation towards SBI.

Pulling up SBI for threatening to invoke bank guarantees as opposed to co-operating with Jalan Kalrock in implementing the resolution plan, NCLAT noted "Monitoring Committee (of which SBI is a part of) has to act as a facilitator for implementation of the Resolution Plan instead of finding fault and taking steps, which does not facilitate the implementation, rather delay the implementation."

The tribunal's order further notes that time is yet to come for lenders to take coercive measures as Jalan Kalrock is still trying to implement the resolution plan. According to the order "There is no doubt that Performance Bank Guarantee can be invoked by the Lenders, but the said invocation can only take place when SRA has failed to implement the Plan. Present is a case where directions have been issued to both lenders and SRA (Jalan Kalrock) to implement the Plan and the event of failure of the Plan has not yet arrived"