NEW DELHI: The Supreme Court on Thursday scrapped the resolution plan for revival of bankrupt Jet Airways by Jalan-Fritsch consortium and ordered the liquidation of grounded airline Jet Airways' assets.
SC ruled that the resolution plan was violated after the consortium failed to infuse even the first tranche of funds within the stipulated timeline, as mandated by the plan. Additionally, the Rs 200 crore previously infused by the Jalan-Fritsch consortium will be forfeited.
A bench led by Chief Justice DY Chandrachud, alongside Justices JB Pardiwala and Manoj Misra, overturned the National Company Law Appellate Tribunal (NCLAT) decision that had upheld the airline's resolution plan, which transferred ownership to the Jalan Kalrock Consortium (JKC).
Justice Pardiwala, delivering the judgment on behalf of the bench, allowed the appeal of SBI and other creditors, who had contested the NCLAT's approval of the plan. The court found that the liquidation of Jet Airways was in the best interest of its creditors, employees, and other stakeholders.
The bench strongly criticized the NCLAT for its decision and invoked its powers under Article 142 of the Constitution. This provision grants the apex court the authority to pass orders and decrees to ensure complete justice in any pending matter.
SC said, "This litigation is an eye-opener and taught us many lessons on IBP and functioning of NCLAT and NCLT."
The NCLAT had earlier, on March 12, upheld the resolution plan of Jet Airways and approved the transfer of the airline’s ownership to the Jalan Kalrock Consortium. However, the ruling was challenged by several creditors, including the SBI, Punjab National Bank (PNB), and JC Flowers Asset Reconstruction Private Limited, citing the failure of the resolution applicant to meet crucial financial obligations.
This follows a previous hearing in which the SC had reserved its verdict on a plea from the SBI-led consortium, seeking to scrap the three-year-old Rs 4,783 crore resolution plan.
The consortium argued that the successful resolution applicant, led by Murari Jalan and Florian Fristch, had failed to deposit even the first tranche of Rs 350 crore, which was part of a larger payment under the plan.
Representatives for the creditors, including Additional Solicitor General N Venkataraman and SBI counsel Sanjay Kapur, argued that the Jalan-Kalrock consortium had repeatedly failed to meet essential terms of the resolution plan, starting with the upfront deposit.
This delay had raised concerns about the consortium's commitment to the revival of the airline, originally grounded due to financial turmoil.
SC ruled that the resolution plan was violated after the consortium failed to infuse even the first tranche of funds within the stipulated timeline, as mandated by the plan. Additionally, the Rs 200 crore previously infused by the Jalan-Fritsch consortium will be forfeited.
A bench led by Chief Justice DY Chandrachud, alongside Justices JB Pardiwala and Manoj Misra, overturned the National Company Law Appellate Tribunal (NCLAT) decision that had upheld the airline's resolution plan, which transferred ownership to the Jalan Kalrock Consortium (JKC).
Justice Pardiwala, delivering the judgment on behalf of the bench, allowed the appeal of SBI and other creditors, who had contested the NCLAT's approval of the plan. The court found that the liquidation of Jet Airways was in the best interest of its creditors, employees, and other stakeholders.
The bench strongly criticized the NCLAT for its decision and invoked its powers under Article 142 of the Constitution. This provision grants the apex court the authority to pass orders and decrees to ensure complete justice in any pending matter.
SC said, "This litigation is an eye-opener and taught us many lessons on IBP and functioning of NCLAT and NCLT."
The NCLAT had earlier, on March 12, upheld the resolution plan of Jet Airways and approved the transfer of the airline’s ownership to the Jalan Kalrock Consortium. However, the ruling was challenged by several creditors, including the SBI, Punjab National Bank (PNB), and JC Flowers Asset Reconstruction Private Limited, citing the failure of the resolution applicant to meet crucial financial obligations.
This follows a previous hearing in which the SC had reserved its verdict on a plea from the SBI-led consortium, seeking to scrap the three-year-old Rs 4,783 crore resolution plan.
The consortium argued that the successful resolution applicant, led by Murari Jalan and Florian Fristch, had failed to deposit even the first tranche of Rs 350 crore, which was part of a larger payment under the plan.
Representatives for the creditors, including Additional Solicitor General N Venkataraman and SBI counsel Sanjay Kapur, argued that the Jalan-Kalrock consortium had repeatedly failed to meet essential terms of the resolution plan, starting with the upfront deposit.
This delay had raised concerns about the consortium's commitment to the revival of the airline, originally grounded due to financial turmoil.
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