Debt-ridden Jet Airways, a renowned airline that operated for 25 years, ceased operations on April 18, 2019. The insolvency resolution proceedings initiated in June 2019 led to the approval of the consortium’s resolution plan by the National Company Law Tribunal (NCLT) in June 2021. However, the implementation of the plan is pending, casting uncertainty on the future of the once-prominent carrier. Currently, the Jet Airways case is being reviewed by the appellate tribunal NCLAT, which will deliver its verdict on May 30. This article delves into the consortium’s plea against lead lender SBI, the status of performance bank guarantees worth Rs 150 crore, and the cooperative measures required for executing the resolution plan.
Jet Airways’ Insolvency Proceedings and Consortium’s Resolution Plan
Following its 25-year operation, Jet Airways faced insolvency and began the resolution process in June 2019. The consortium, led by Jalan Kalrock Consortium, submitted a resolution plan that received approval from the NCLT in June 2021. This resolution plan holds the key to the revival of the airline, but its implementation has been delayed, raising concerns about the airline’s future.
NCLAT’s Order on May 30 and the Plea Against SBI
The appellate tribunal NCLAT is currently reviewing the Jet Airways case and is set to announce its decision on May 30. The Jalan Kalrock Consortium, as the winning bidder, has filed a plea requesting the tribunal to prevent the lead lender, SBI, from encashing performance bank guarantees worth Rs 150 crore. This plea highlights the ongoing differences between the lenders and the consortium. To ensure the successful execution of the resolution plan, the NCLAT has urged both parties to cooperate with each other.
Consortium’s Efforts for Revival and Escrow Account Deposit
Representing the consortium, Senior Advocate Ravi Shankar Prasad informed the NCLAT that the consortium is committed to the revival of Jet Airways. As a demonstration of their intent, the consortium has decided to deposit INR 50 crore in an escrow account. Furthermore, they requested the NCLAT to instruct SBI not to encash the performance bank guarantees provided by the consortium.
SBI’s Response and Pending Payment
Senior advocate Gopal Jain, representing SBI, stated that the consortium was expected to make the payment by May 15, but the bank has not received any funds. In response, Prasad reiterated the consortium’s dedication to reviving Jet Airways and highlighted the need to obtain permissions from relevant authorities, including the home ministry. Prasad also mentioned the consortium’s plan to appoint their own directors.
Uncertainty Over Air Operator’s Certificate (AOC)
Adding to the challenges faced by Jet Airways, the airline’s Air Operator’s Certificate (AOC) expired on a recent Friday. The consortium has not yet confirmed whether they have sought revalidation of the AOC. This situation further compounds the uncertainties surrounding the airline’s future operations.
The Jet Airways case continues to undergo deliberation by the appellate tribunal NCLAT, with the verdict scheduled for May 30. The Jalan Kalrock Consortium’s plea against SBI regarding the encashment of performance bank guarantees worth Rs 150 crore remains a crucial aspect of the case. The successful implementation of the resolution plan requires cooperation between the lenders and the consortium. With the revival of Jet Airways at stake, the outcome of the NCLAT’s decision will significantly impact the future of this once-esteemed airline.
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