In a major blow
to Jalan Kalrock Consortium (JKC), the successful resolution professional of
the grounded airline Jet Airways, the Supreme Court (SC) on Thursday
directed it to furnish a performance bank guarantee of Rs 150 crore by January
31, reported Moneycontrol.
The SC ruled that
if JKC fails to furnish the bank guarantee, legal penalties will follow. The
National Company Law Appellate Tribunal (NCLAT) will now have to decide the
appeal by the State Bank of India (SBI) contesting the transfer of
Jet Airways' ownership to JKC by the end of March 2024.
The court has
thus set aside the order of NCLAT from August 2023, permitting JKC to adjust Rs
150 crore from an existing performance bank guarantee for infusing Rs 350
crore. According to the consortium's undertaking, they will pay Rs 100 crore by
August 31, another Rs 100 crore by September 30, and the remaining Rs 150 crore
will be deducted from an existing performance bank guarantee.
The lenders of
the airline had vehemently contested against the NCLAT permitting JKC to adjust
the Rs 150 crore bank guarantee on the ground that it was a backup and could
not be utilised at this stage.
On August 18,
2023, when the consortium proposed the payment schedule, the appellate tribunal
asked it to file an application to this effect within 24 hours. The Committee
of Creditors (CoC) informed the appellate tribunal that they may choose not to
pursue the appeal against the transfer of the airline's ownership to the Jalan
Kalrock Consortium, provided it pays Rs 350 crore to meet condition precedents.
The lenders
constitute a part of the CoC, which is formed once a company is admitted to
insolvency. It is a body of financial creditors that represents the interests
of stakeholders. The panel's vote percentage is proportional to the amount lent
to the insolvent company by a financial institution.
On January 13,
2023, NCLT allowed the transfer of the beleaguered airline to the consortium
led by London-based Kalrock Capital and UAE-based entrepreneur Murari Lal
Jalan. However, the CoC filed an opposition to the transfer with NCLAT.
Jet Airways was
grounded in April 2019 due to growing losses and a debt of around Rs 8,000
crore. In October 2020, the airline's CoC approved the revival plan submitted
by the Jalan-Kalrock consortium.