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Jet Airways lenders file plea against NCLT order

Less than two weeks ago, the Mumbai bench allowed the applications filed by JKC against the lenders of Jet Airways, paving the way for transfer of ownership of the airline to JKC, 18 months after it was declared the winning bidder.

Jet Airways lenders file plea against NCLT order
The plan obligates the successful resolution applicant (by JKC) to recommence operations at Jet Airways. (Photo source: IE)

Lenders of the erstwhile Jet Airways are reported to have approached the National Company Law Appellate Tribunal (NCLAT), opposing a January 13 National Company Law Tribunal (NCLT) order that states that the Jalan-Kalrock Consortium (JKC) — which was declared the winning bidder for the beleaguered airline — has fulfilled all the conditions precedent.

A plea was filed on Tuesday with the NCLAT by the lenders, CNBC TV18 reported citing sources. Less than two weeks ago, the Mumbai bench allowed the applications filed by JKC against the lenders of Jet Airways, paving the way for transfer of ownership of the airline to JKC, 18 months after it was declared the winning bidder. The NCLT agrees that all the conditions precedent provided in the resolution plan submitted earlier have been met. The plan obligates the successful resolution applicant (by JKC) to recommence operations at Jet Airways.

The lenders, through their counsel, had sought a suspension of two weeks of the order, which was disallowed by the judges. Although there was no official statement from the lenders, the Street expected them to approach a higher court to challenge the NCLT order.

With the effective date reset as November 16, JKC has until May to settle dues and take over management control of Jet Airways. Last week, JKC moved the Supreme Court challenging an earlier order by the NCLAT, which had asked it to clear employees’ dues totalling Rs 250 crore.

Prior to the January 13 order by the NCLT, JKC and the lenders led by the State Bank of India were engaged in an intense stand-off stretching several months. The lenders argued that JKC had failed to meet all the conditions precedent mentioned in the plan, which made it block the transfer of Jet Airways, while JKC approached the NCLT to get a stamp of approval that it did meet all the conditions precedent.

The lenders had sought a signed undertaking from JKC, which in effect superseded the resolution plan. JKC had refused to sign the undertaking, which mentioned that JKC shall procure the slot allotment approvals for all airport slots, as set out in the resolution plan. The NCLT bench had concurred that restoration of the historical slots was not possible since those slots are no longer available.

Separately the Jet Airways Cabin Crew Association (JACCA) has repeatedly sought liquidation of the airline for non-payment of dues to the employees of the airline.

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First published on: 25-01-2023 at 07:23 IST