Jet Airways will never restart. On Thursday, November 7, the Supreme Court ordered the liquidation of Jet Airways. Liquidation involves seizing a company’s assets and using the proceeds from their sale to pay off its debts and liabilities.
In this order, the court set aside the decision of the National Company Law Appellate Tribunal (NCLAT). NCLAT had in March decided to hand over ownership of Jet Airways to Jalan-Kalrock Consortium (JKC) as part of the resolution plan (to save the airline from the crisis).
Let us tell you that due to the economic crisis, the operation of Jet Airways has been closed since 2019. At that time, Airways had a loan of Rs 4783 crore from several banks. The maximum loan was provided by the State Bank of India. The banks had initiated bankruptcy proceedings after the loss of the airline. According to the resolution plan, JKC was to obtain ownership rights. The banks appealed this decision to the Supreme Court.
The Supreme Court said the decision would be in the interest of creditors and employees. The Supreme Court in its ruling said the liquidation would be in the interest of its creditors and employees as the Jalan-Kalrock consortium failed to even implement the resolution plan. after 5 years of approval. The court used its extraordinary powers under Article 142 of the Constitution to order the liquidation of Jet Airways in view of the “strange and disturbing” situation.
In fact, according to the resolution plan, the Jalan-Kalrock Consortium had to pay Rs 4,783 crore. Rs 350 crore was to be given in the first installment, out of which the consortium was able to give only Rs 200 crore. A bench comprising Chief Justice DY Chandrachud, Justice JB Pardiwala and Justice Manoj Mishra ordered the Mumbai NCLAT to appoint a liquidator.
What was the bank’s allegation?
In the petition filed in the Supreme Court, many banks, including SBI, said that this consortium had not fulfilled the conditions laid down for the acquisition of the airline. He is now unable to revive the airline. The consortium has deposited only ₹200 crore out of the ₹350 crore under the resolution plan. JKC failed to fulfill other important obligations, including acquiring the Air Operator Certificate and international rights. After a long delay in the revival of Jet Airways, the airline was incurring a loss of ₹22 crore every month for the maintenance of its assets. Additionally, Jet Airways owed around ₹7,500 crore to its creditors, further complicating the situation.
Joint company of Murari Lal Jalan and Kalrock Capital
JKC is a joint venture between Murari Lal Jalan and Kalrock Capital. Jalan is a businessman based in Dubai. Kalrock Capital Management Limited is a London-based global company engaged in financial advisory and alternative asset management.
Naresh Goyal launched Jet Airways In the early 1990s, ticket agent-turned-entrepreneur Naresh Goyal gave people an alternative to Air India by establishing Jet Airways India Limited. At one time, Jet had a total of 120 aircraft and was one of the leading airlines.
When the company with the slogan “The Joy of Flying” was at its peak, it operated 650 flights every day. When the company closed its doors, it had only 16 planes left. As of March 2019, the company’s loss had reached Rs 5,535.75 crore.