The National Company Law Appellate Tribunal (NCLAT) on December 12 reserved for judgment, an appeal filed by Jalan Kalrock Consortium (JKC), challenging the order of the National Company Law Tribunal (NCLT) asking the airline's monitoring committee to reinitiate and conclude the sale of aircraft belonging to Jet Airways.
JKC is the successful resolution applicant of Jet Airways tasked with reviving the airline. The all-India Jet Airways Officers and Staff
Association have also filed an appeal against NCLT's judgment.
During the hearing, senior advocate Krishnendu Dutta, who appeared for JKC, argued that the NCLT's order was beyond its jurisdiction as the sale of the aircraft was not within its purview. According to Dutta, the NCLT has ordered the 'specific performance' of a contract under the civil procedure code, which it could not have while deciding an issue about the Insolvency and Bankruptcy Code (IBC).
He further argued that the sale was brought to a halt owing to a disagreement in the Monitoring Committee (MC), which includes JKC, lenders and banks among others and added that the prospective buyer could not have moved the NCLT for such an order. He contended that the lenders are obstructing JKC from every angle. Lawer Abhijeet Sinha, also appearing for JKC, told the court that the lenders were deterring JKC from taking over the airline in full swing.
Senior advocate Ritin Rai, who appeared for Ace Aviation, the prospective buyer, argued that aircraft as an asset depreciate fast and the longer the sale is delayed, the less usable it becomes. Furthermore, he told the appellate tribunal that the NCLT had directed the sale proceeds of Rs 400 crore to be deposited in an escrow account and the warring parties may decide among themselves as to how to distribute the same.
Additional Solicitor General (ASG) Venkatraman, who appeared for the lenders argued that JKC is 'neither letting the aircraft fly nor letting the resolution plan to take off.' According to the ASG, the lenders have been incurring costs for the airline over the last few years and they are now losing public money to keep it afloat. Furthermore, Venkatraman told the court that the lenders will also be forced to pay the airport charges running into hundreds of crore.
Casefile
The aircraft sale process 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 (Jalan Kalrock Consortium) and the resolution professional.
It emerged that while the airline's lenders were aggregable 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.
The NCLT directed the committee to "Reinitiate the process and conclude the sale of the aircraft after taking into consideration the applicant as one of the eligible bidders." In 2022, Malta-based Ace Aviation's letter of intent to buy four Boeing 777 aircraft has already been accepted by the monitoring committee.
Ace Aviation had earlier told Moneycontrol that the delays in the sale of the aircraft may force it to look at other options. Ace had already invested Rs 50 crore towards buying the aircraft and was ready to invest another Rs 350 crore.
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