Liquidation in best interest of creditors, employees and stakeholders, says top court
The Rs 4,783-crore resolution plan was in the works for 3 years, but the first tranche of payments was yet to be made. Representation pic/Getty Images
Hammering in the last nail in the coffin for Jet Airways, the Supreme Court scrapped the Jalan-Fritsch Consortium’s (JFC) resolution plan for revival of the bankrupt Jet Airways, and ordered the liquidation of the grounded airline’s assets. The court found that the liquidation of Jet Airways was in the best interest of
its creditors, employees, and other stakeholders.
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“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,” said the SC in its order, which was passed on Thursday and uploaded on Saturday.
A bench led by Chief Justice DY Chandrachud, alongside Justices JB Pardiwala and Manoj Misra, overturned the National Company Law Appellate Tribunal’s (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 and cited the failure of the resolution applicant to meet crucial financial obligations.
Calling the case an “eye-opener”, the SC bench strongly criticised the NCLAT for its decision and invoked its powers under Article 142 of the Constitution, which grants the apex court the authority to pass orders and decrees to ensure complete justice in any pending matter.
The NCLAT had on March 12 upheld the resolution plan, but its ruling was challenged by creditors. This follows a previous hearing in which the Supreme Court 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 creditors’ consortium argued that the 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.
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