The National Company Law Appellate Tribunal (NCLAT) on Tuesday (March 12) upheld the transfer of ownership of Jet Airways to Jalan Kalrock Consortium (JKC), in a step that could pave the way for an early resumption of flight operations at Jet Airways. This decision follows the National Company Law Tribunal’s (NCLT) approval of the ownership transfer to JKC in January last year.
In the latest development the appellate tribunal directed lenders to wrap up the transfer within 90 days and also asked JKC to secure an air operator’s certificate during this time frame. Additionally, NCLAT also allowed JKC to utilise Rs. 150 crore from its bank guarantee towards the initial payment of Rs. 350 crore to the lenders.
Year long battle between JKC and lenders
For over a year, JKC and Jet Airways’ lenders have been engaged in a legal tussle regarding the transfer of ownership of the airline to the successful bidder. Earlier, in January, the Supreme Court declined to intervene in other matters but overturned NCLAT decision allowing JKC to utilise Rs 150 crore from its bank guarantee.
From grounding to revival – A timeline of events
Due to severe financial challenges, Jet Airways was grounded in 2019. This prompted State Bank of India (SBI), its primary lender, to initiate insolvency proceedings before the NCLT Mumbai. Subsequently, the company entered the resolution process. Later, in 2021, JKC emerged as the successful bidder to revive Jet Airways’ operations.
However, a dispute broke out when JKC alleged that the lenders had not initiated the ownership transfer process, while the lenders argued that JKC had not provided any funds. This disagreement led the lenders to approach the NCLAT in February 2023, seeking to contest the NCLT’s decision on ownership transfer. However, the NCLAT declined to grant any injunction in favor of the lenders.
The conflict persisted until September 2023 when the NCLAT allowed JKC to utilize its Rs 150 crore performance bank guarantee to inject Rs 350 crore into Jet Airways.