Case of Jet Airways: Supreme Court orders Jet Airways to deposit Rs 150 crore within two weeks, shocking JKC

Case of Jet Airways: Supreme Court orders Jet Airways to deposit Rs 150 crore within two weeks, shocking JKC

Case of Jet Airways: Supreme Court orders Jet Airways to deposit Rs 150 crore within two weeks, shocking JKC

The court ruled that JKC Bank would be subject to legal repercussions should it choose not to provide the guarantee. By the end of March 2024, NCLAT will need to provide a decision on the State Bank of India's petition contesting the transfer of Jet Airways' ownership to JKC.

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The Supreme Court on January 18 ordered Jalan Kalrock Consortium (JKC), the victorious resolution specialist of the grounded airline Jet Airways, to deposit Rs 150 crore by January 31 (two weeks from now). This decision dealt a setback to JKC.

State Bank of India and JKC are to maintain an escrow account for this sum.

The supreme court has declared that JKC Bank would be subject to legal repercussions should it refuse to provide the guarantee. By the end of March 2024, NCLAT will need to provide a decision on the State Bank of India's petition contesting the transfer of Jet Airways' ownership to JKC.

The National Company Law Appellate Tribunal's (NCLAT) August 2023 ruling, which had permitted JKC to deduct Rs 150 crore from the current performance bank guarantee in exchange for payment of Rs 350 crore, has therefore been overturned by the court. The consortium has committed to paying Rs 100 crore by August 31 and Rs 100 crore by September 30. The remaining Rs 150 crore would be deducted from the performance bank guarantee that is already in place.

Lenders to the airline had objected vehemently to NCLAT permitting JKC to make adjustments in Rs. The Rs 150 crore bank guarantee on the land was a backup and isn't usable right now.

The Appellate Tribunal requested that the consortium submit an application with the proposed payment schedule by August 18, 2023, at the latest, within a 24-hour period. The CoC informed the appellate panel that if the airline pays Rs 350 crore to satisfy the requirements, they may decide not to file an appeal against the company's ownership transfer to Jalan Kalrock Consortium.

The committee of creditors, which is established when a business files for bankruptcy, includes lenders. The interests of the stakeholders are represented by this group of creditors. The amount that a financial institution lends to the insolvent firm determines the panel's voting percentage.

The ailing airline was transferred to a partnership headed by London-based Kalrock Capital and UAE-based entrepreneur Murari Lal Jalan on January 13, 2023, with permission from the NCLT. The CoC, however, challenged the transfer and brought it to NCLAT.

Due to growing losses and debt of around Rs 8,000 crore, Jet Airways was forced to close its doors in April 2019. The airline's COC accepted the Jalan-Kalrock Consortium's recovery plan in October 2020.