NCLAT reserves order in Jet Airways plea challenging aircraft sale

The National Company Law Appellate Tribunal (NCLAT) reserved judgment on Tuesday on a plea by Jet Airways’ owner Jalan Kalrock Consortium (JKC), challenging the sale of the airline’s four aircraft to Malta’s Ace Aviation. JKC had challenged the National Company Law Tribunal (NCLT) order, which permitted the sale, asking the airline’s monitoring committee to proceed with it.

During the hearing, counsel for JKC argued that the NCLT’s order was beyond its jurisdiction. JKC disputed the effective date of the resolution plan’s implementation and insisted the sale should be halted until then. Once implemented, the sale process should go to the consortium rather than the airline’s monitoring committee. Meanwhile, the airline’s workers oppose the sale, citing unpaid gratuities and provident fund dues, fearing the sale would harm their interests. The former Resolution Professional clarified that sale proceeds would go into escrow for equitable distribution.

Lenders, however, advocate the sale, stressing the urgency due to mounting airport dues and wastage of public funds. They informed the tribunal that they have incurred about ₹900 crore in airport dues, emphasizing the need for quick action. On 29 September, JKC said it had fulfilled the financial commitment of ₹350 crore and the new promoters are determined to resume operations of the airline in 2024.

However, lenders voiced concerns about the consortium’s source of funding, hinting at potential money laundering on 4 October. Jet Airways stopped flying in April 2019 after running into financial difficulties. Ownership transfer has been hanging fire amid continuing differences between the lenders and the consortium. On 22 June 2021, the NCLT approved the resolution plan for Jet Airways.

Historically, Jet Airways has faced financial difficulties and stopped flying in April 2019. The ongoing sale of their aircraft has faced challenges from the owner consortium and the workers, as well as concerns from lenders about potential money laundering. The situation has been complicated by issues surrounding the effective date of the resolution plan’s implementation and the urgency to address mounting airport dues.