Supreme Court Orders Sale of Jet Airways’ Assets, Dismisses NCLAT Ruling – Airline to Remain Grounded
Jet Airways Ordered into Liquidation by Supreme Court
The Supreme Court has ordered the liquidation of financially troubled Jet Airways, putting an end to any possibility of its revival. The airline’s assets are now set to be sold off, with proceeds distributed among lenders. In this ruling, the Court reversed a decision by the National Company Law Appellate Tribunal (NCLAT), which had earlier allowed Jalan-Kalrock Consortium (JKC) to assume ownership of the airline without full payment, contingent upon a resolution plan.
NCLAT Decision Overruled; Liquidation Ordered for Non-Compliance
In March 2024, NCLAT permitted JKC to take over Jet Airways as part of a resolution plan, despite pending payments. State Bank of India and other lenders challenged this in the Supreme Court. Following a review, the Court decided on November 7 to dismiss the NCLAT ruling due to the consortium’s failure to meet financial commitments within the stipulated timeframe.
Five-Year Delay in Execution of the Resolution Plan
Invoking special powers under Article 142 of the Constitution, the Supreme Court ordered Jet Airways’ liquidation after observing an “extraordinary and concerning” delay in executing the five-year-old resolution plan. The Court instructed the National Company Law Tribunal (NCLT) Mumbai to immediately appoint a liquidator. Additionally, the Court has seized INR 200 crore deposited by JKC.
Jet Airways Ceased Operations in April 2019
Facing severe financial losses, Jet Airways ceased operations on April 17, 2019. State Bank of India led insolvency proceedings against the airline. In June 2021, JKC won the bid to revive Jet Airways under an NCLT insolvency resolution process, but ownership transfer issues persisted. Lenders cited that JKC had not deposited the required funds or met other critical regulatory requirements.
The Financial and Operational Troubles of Jet Airways’ Resolution
The Jet Airways revival plan stipulated a payment of INR 4,783 crore by JKC, including an upfront payment of INR 350 crore. However, JKC deposited only INR 200 crore, leading lenders to question its commitment. JKC also failed to obtain necessary certifications and address key responsibilities. Monthly asset maintenance costs were adding INR 22 crore to the airline’s financial burden, with an outstanding debt of approximately INR 7,500 crore further complicating the scenario.
Jet Airways’ Legacy and the Consortium’s Background
Founded in the early 1990s by Naresh Goyal, Jet Airways once operated 120 aircraft and 650 daily flights, becoming a top airline in India. However, by its closure, Jet was down to 16 aircraft with losses reaching INR 5,535.75 crore by March 2019. The Jalan-Kalrock Consortium includes Dubai-based businessman Murari Lal Jalan and the London-based financial firm Kalrock Capital Management Ltd.
