Ace Aviation Limited, a company whose letter of intent (LoI) for the purchase of grounded airline Jet Airways' aircraft was accepted, have moved National Company Law Appellate Tribunal (NCLAT) after the sale process was put on hold due to a logjam between Jalan Kalarock Consortium (JKC) and the creditors of the airline.
The Jalan Kalrock Consortium emerged as the successful resolution applicant to restart the operations of the airline, which was grounded in 2019. The consortium is now tasked with operating the airline.
Ace had earlier approached the National Company Law Tribunal (NCLT) in Mumbai, which refused to entertain the plea to avoid multiplicity of proceedings and in the interest of all stakeholders.
The NCLT in its July 19 order noted that an "order either allowing the sale of the aircraft or restraining the sale would lead to reopening of the duly approved Resolution Plan. Since the sale process was kept in abeyance by the lenders and monitoring committee, it is their responsibility to clear the deadlock as it has arisen post-approval of the resolution plan."
The company's letter of intent to purchase some aircraft from Jet was accepted by the monitoring committee comprising representatives of the financial creditors, the successful resolution applicant and the resolution professional. However, due to a deadlock between the JKC, the sale process was put on hold in November 2022.
It emerged that while the airline's lenders were aggregable for the sale of the aircraft, the consortium and the erstwhile workmen are opposed to it.
According to the consortium, the effective date of implementation of the resolution plan would start from August 2023 and they are ready to implement the plan, and as per the term of the plan, the sale proceeds should come to Jet and not the lenders.
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.
Considering the deadlock between the parties, the NCLT refused to interfere in the situation and disposed off the plea. Ace has now challenged NCLT's order in appeal.
NCLAT is likely to hear the case on August 10.
Meanwhile, the NCLAT is currently hearing an appeal by the airline's committee of creditors challenging the transfer of ownership. According to the lenders, Jalan Kalrock Consortium has not fulfilled any of its obligations so far. On August 7, lenders told NCLAT that they may choose not to 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.
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.
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