Jet Airways Insolvency: NCLAT Asks Jalan-Karlock Consortium To File An Application Over Payment Terms

The National Company Law Appellate Tribunal on Friday asked the Jalan-Kalrock consortium, the winning bidder for bankrupt Jet Airways, to file an application within 24 hours, explaining the modalities for payment of Rs 350 crore to the lenders.

The appellate tribunal has also directed the Committee of Creditors of Jet Airways to file a response over the consortium's application stating the condition for an extension for the payment.

"Learned Counsel for the Respondent (consortium) seeks liberty and is allowed to file an application within 24 hours. Response to the application be filed by the appellant (lenders) by the date fixed," said NCLAT.

A two-member NCLAT bench comprising Chairperson Justice Ashok Bhushan and Barun Mitra has directed to list this appeal on August 21 for the next hearing.

It also allowed the consortium "to file hard copy of the Application regarding payment of gratuity etc" to the employees of Jet Airways. 

During the proceedings, the Committee of Creditors (CoC) asked the consortium to pay Rs 350 crore by August 31, as per the schedule.

However, the consortium sought an extension in the schedule. 

Senior advocate Ravishankar Prasad appearing for the consortium submitted that they will deposit Rs 100 crore by August 31. After that, they would deposit another Rs 100 crore by September 30. 

For the rest Rs 150 crore, it suggested that lenders can encash a bank guarantee lying in their favour having a similar value.

However, Additional Solicitor General N Venkatraman appearing for lenders said the bank guaranty of Rs 150 crore was executed for some other expenses for the resolution plan and it cannot be construed to be a part of the Rs 350 crore.

Earlier also, the timeline for payment of Rs 350 crore has been extended by NCLAT

Currently, the affairs of the grounded airline are being managed by the Monitoring Committee (MC) of lenders.

Now, as per the extended time to the successful resolution applicant, Rs 350 crore has to be paid before August 31, 2023.

During the last hearing on August 7, lenders said if the consortium pays them Rs 350 crore, then they would not pursue a case against it. 

Jet Airways stopped flying in April 2019, and later the consortium emerged as the winning bidder under the insolvency resolution process. However, ownership transfer has been hanging fire amid continuing differences between lenders and consortiums.