This decision, reserved since October 16, will be delivered by a bench headed by Chief Justice of India DY Chandrachud, who is scheduled to retire on November 10.
NEW DELHI: The Supreme Court is set to announce its ruling on Thursday, November 7, in the Jet Airways ownership dispute between the Jalan Kalrock Consortium (JKC) and a group of former lenders led by the State Bank of India (SBI).
This decision, reserved since October 16, will be delivered by a bench headed by Chief Justice of India DY Chandrachud, who is scheduled to retire on November 10.
Brief Facts
JKC claims ownership of the airline, while creditors have requested that the Supreme Court exercise its inherent powers under Article 142 of the Constitution to liquidate Jet Airways. This case, which has navigated the National Company Law Tribunal (NCLT), the National Company Law Appellate Tribunal (NCLAT), and the Supreme Court, has spanned over five years.
NCLT Proceedings
In April 2019, Jet Airways ceased operations due to financial difficulties, leading SBI, the largest lender, to initiate insolvency proceedings. In June 2019, the airline entered the insolvency resolution process, and in 2021, a consortium led by Murari Lal Jalan and Kalrock Capital was awarded the bid to revive it.
The NCLT approved their resolution plan, with specific conditions, including the acquisition of an air operator’s certificate and an obligation to pay over RS 8,000 crore to creditors. However, disputes arose over these conditions, delaying the transfer of ownership to JKC. In January 2023, the NCLT dismissed objections from the lenders, who then approached the NCLAT.
The lenders contested the NCLT’s January 2023 order transferring ownership to JKC. Though the NCLAT refused to stay the ownership transfer, it granted JKC an additional 100+ days to pay Rs 350 crore, which the lenders appealed. In August 2023, the lenders agreed to forgo the appeal if JKC met a partial payment by September 30.
JKC offered Rs 200 crore in cash and sought to adjust Rs 150 crore from its existing bank guarantees, but the lenders objected. When the NCLAT allowed the adjustment, the lenders escalated the matter to the Supreme Court.
In January 2024, the Supreme Court overturned the NCLAT’s decision, directing JKC to deposit ₹50 crore into a designated account. The NCLAT subsequently upheld the ownership transfer in March 2024, leading the lenders to reapproach the Supreme Court.
Supreme Court Proceedings
The Supreme Court initially heard the appeals against the NCLAT’s refusal to stay the ownership transfer in January 2023, with lenders arguing that liquidation was the only viable option as the revival plan was no longer feasible. JKC claimed that the lenders’ actions prevented its efforts to revive the airline. The Court remanded the case to the NCLAT for a final decision, which, when in JKC’s favor, led the lenders to appeal once more.
During the Supreme Court’s October 16 hearing, JKC’s counsel, Senior Advocate Gopal Sankaranarayanan, argued that the NCLAT had addressed all pertinent issues and that the lenders presented no substantial question of law. He maintained that JKC’s intent was to revive Jet Airways, not hinder it.
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On the other hand, Additional Solicitor General N Venkataraman contended that JKC had no commitment to executing the revival plan, emphasizing that if creditors were forced to bear unpaid dues, the resolution plan would become unsustainable. Venkataraman urged the Supreme Court to invoke Article 142 for liquidation to avoid further litigation, clarifying that the government had no role in undermining the airline. He highlighted that lenders were incurring substantial costs, amounting to over ₹300 crore to date.
With Go First’s liquidation plea also scheduled for November 8, this week may significantly impact India’s aviation sector.
