NCLAT Upholds Decision To Transfer Jet Airways To Jalan Kalrock Consortium

The National Company Law Appellate Tribunal (NCLAT) has upheld a significant decision regarding the future of troubled airline Jet Airways. In a ruling on Tuesday, the NCLAT directed the monitoring committee of Jet Airways to transfer ownership of the airline to the Jalan Kalrock Consortium (JKC) within 90 days.

Additionally, the tribunal mandated JKC, a consortium of Murari Lal Jalan and Florian Fritsch of Kalrock Capital, to obtain an air operator’s certificate within the same timeframe. Notably, the NCLAT also greenlit the adjustment of the Performance Bank Guarantee (PBG) worth Rs 150 crore towards the payment of the first instalment of Rs 350 crore.

Explaining the decision, the appellate tribunal clarified, “The PBG of Rs 150 crore held with the monitoring committee will be adjusted in the payment of the first instalment of Rs 350 crore as payment of Rs 200 crore has already been made by the SRA.”

Jalan Kalrock Consortium had previously deposited Rs 200 crore in two instalments by September last year. However, lenders had raised concerns over JKC’s alleged non-compliance with the resolution plan terms, ranging from payment of airport dues to the initial instalment.

Jet Airways, once a prominent private airline in India, ceased operations on April 17, 2019, due to cash flow issues. The consortium’s completion of all condition precedents, as recognised by the National Company Law Tribunal (NCLT) in 2023, prompted lenders to contest the decision at the NCLAT.

Highlighting the resolution plan’s stipulation for the successful resolution applicant to provide performance security, the appellate tribunal noted the provision of a PBG worth Rs 150 crore to lenders. Additionally, the tribunal mentioned the security value of property in Mumbai’s Bandra Kurla Complex, which stands at Rs 246 crore.

Expressing dissatisfaction with lenders’ advocacy for corporate debtor liquidation instead of resolution plan implementation, the NCLAT urged for a collaborative approach. “We hope and trust that lenders shall now play a positive and collaborative role to take steps so that different milestones under the Resolution Plan should be achieved and Corporate Debtor be revived so that hopes of many, including the workmen and employees, be not belied,” stated the tribunal.