Supreme Court to hear Jet Airways lenders' plea against Jalan Kalrock Consortium on October 12

Jet Airways was grounded in April 2019 over growing losses and a debt of about Rs 8,000 crore.

The Supreme Court on October 9 indicated that it would hear the plea by grounded airline Jet Airways' lenders on October 12. The lenders are challenging the National Company Law Appellate Tribunal's (NCLAT) order granting Jalan Kalrock Consortium (JKC), the successful bidder to Jet Airways, more time to make payments to them.

Senior advocate Harish Salve, who appeared for the lenders of the airline argued that JKC was using tactics to delay making payments to them. He further argued that JKC's foreign partner Florian Fritsch has been accused of money laundering and other charges.

Appearing for JKC, senior advocate Mukul Rohatgi argued that JKC has been making payments whenever they are being asked to do so. He submitted that JKC has recently made a payment of Rs. 350 crore.

Both the parties urged the court to hear the case at the earliest possible time as it is of great importance to aviation as a sector. The court accordingly agreed to hear the case on October 12.

On October 4, the lenders of the airline questioned the source of funds that JKC had paid to it at the NCLAT. They alleged that the money that the consortium had paid to them could be laundered. The NCLAT is to hear the case on October 12.

On July 5, the CoC told the court that it had spent Rs 470 crore since the implementation of the Corporate Insolvency Resolution Process (CIRP), without getting any return on investment. The creditors said they were incurring Rs 23 crore in expenses every month.

The Jet Airways Workmen Association agreed with the CoC and told the court that they had not been paid their dues.

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).

It said 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 November 16, 2022, to 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.

It also asked the consortium to make payments by May 15, 2023, 150 days from the initiation of the ownership proceedings but the NCLAT exemption gave it more time.

The consortium was to make the first tranche of the payment to Jet's lenders before May 15 but it didn't.

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 approved the revival plan submitted by the Jalan-Kalrock consortium.