'We can't force them to sell', NCLAT tells prospective buyer of Jet Airways aircraft

The Jalan Kalrock Consortium emerged as the successful resolution applicant to restart the operations of Jet Airways.

The National Company Law Appellate Tribunal (NCLAT) on August 10 orally observed that they cannot force the monitoring committee of the grounded Jet Airways to sell the aircraft to Ace Aviation Limited.

The appellate tribunal however deferred the hearing of the case to September 6 for further consideration.

At the hearing today, senior advocate Ritin Rai, who appeared for Ace argued that they were ready to purchase three of Jet's aircraft for a total of Rs 400 crore. Rai submitted that they have already brought in Rs 50 crore to make the purchase and are in the process of bringing in another Rs 350 crore. However, the sale is delayed on account of a deadlock between the lenders and Jalan Kalrock Consortium, which has taken over Jet Airways.

The tribunal however noticed that according to the order of NCLT declining to interfere in the issue, Ace's application is to come up for hearing on August 30 again and adjourned the case accordingly.

Ace Aviation Limited's letter of intent (LoI) for the purchase of the aircraft was accepted by the monitoring committee. However, the sale process was put on hold due to a logjam between Jalan Kalarock Consortium 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.

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."

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 of the plea. Ace has now challenged NCLT's order in appeal.