In a relief for Jalan-Kalrock Consortium (JKC), which has emerged as a successful bidder to take over Jet Airways, the National Company Law Appellate Tribunal (NCLAT), on Friday granted it more time to make payments to the State Bank of India.
The appellate tribunal said that the National Company Law Tribunal (NCLT) had approved the consortium’s resolution plan in January, but the matter on appeal for stay was heard by it in March, which was turned down.
Hence, it would be proper that Jalan Kalrock Consortium gets an exclusion from November 16, 2022 till March 3, 2023, from complying with payment obligation towards SBI.
The NCLAT also pulled up SBI for threatening to invoke bank guarantees instead of cooperating with JKC in implementing the resolution plan. “When the resolution plan of the corporate debtor has received approval up to Hon’ble Supreme Court and the monitoring committee is constituted under the plan to oversee implementation, the monitoring committee has to act as a facilitator for implementation of the resolution plan instead of finding fault and taking steps, which does not facilitate the implementation, rather delay the implementation,” NCLAT has said in its 16-page order.
It has noted that there is no doubt that performance bank guarantee can be invoked by the lenders, but the said invocation can only take place when successful resolution applicant (SRA) has failed to implement the plan.
“Present is a case where directions have been issued to both lenders and SRA to implement the plan and the event of failure of the plan has not yet arrived,” the NCLAT order said.
Thus, with the appellate tribunal directing SBI not to invoke the performance bank guarantee, JKC will now get an additional time to pay its dues to SBI.
Earlier, on May 22, the NCLAT had reserved its order on a plea by JKC, seeking directions to stop SBI to invoke its performance bank guarantee of Rs 150 crore.
On January 13, the NCLT had allowed the transfer of the bankrupt airline to JKC, led by London-based Kalrock Capital and UAE-based entrepreneur Murari Lal Jalan.
It had also asked the consortium to make payments by 15 May, 150 days from the initiation of the ownership proceedings.
The consortium was to make the first tranche of the payment to the lenders before May 15 but it didn’t and feared that SBI would invoke the performance bank guarantee of Rs 150 crore in lieu of Rs 175 crore worth of dues.
The airline’s ownership can’t be transferred to the consortium if the payment is not made. The air operator’s certificate of Jet Airways expired on May 19.
The lenders had approached the NCLAT as they opposed the ownership transfer to the consortium. They alleged that the consortium had not fulfilled its obligations.