The Supreme Court on Thursday, November 7, ordered the liquidation of Jet Airways after it found that the airline’s successful bidder, Jalan-Kalrock Consortium, had failed to comply with the revival plan. The ruling ends years of legal battles, gives the airline a chance for revival and raises concerns about India’s bankruptcy framework.
Top 10 things you need to know from the verdict
Supreme Court orders Jet Airways to be liquidated
The Supreme Court has ruled that Jalan-Kalrock Consortium (JKC) failed to meet key obligations under its resolution plan.
Failure to fulfill resolution plan conditions
JKC failed to inject promised $The first tranche of Rs 350 crore was used to clear workers’ dues and settle important airport charges, prompting the court to declare liquidation the only way for creditors to recover part of their dues.
Set aside NCLAT’s March 2024 ruling
The Supreme Court overturned the March 2024 order of the National Company Law Appellate Tribunal (NCLAT), which had upheld JKC’s control over the airline. The court criticized NCLAT for not fully considering the facts and JKC’s non-compliance with the settlement plan.
Supreme Court applies Article 142 to liquidation
The Supreme Court ruled for liquidation, invoking its powers under Article 142 of the Constitution, noting that JKC had failed to meet its obligations, leaving a viable path for the airline’s revival.
Lenders lead calls for liquidation
Calls for liquidation were led by lenders including State Bank of India (SBI), who argued that JKC’s resolution plan was “unworkable” and that the consortium had failed to deliver on its promises, leading to financial losses.
Protracted legal battle delays execution
Jet Airways, India’s once largest airline, went bankrupt in 2019.
Concerns about JKC’s financial contribution
Despite JKC’s initial commitment, the consortium only deposited $200 Crores $The plan requires Rs 350 crore. Lenders also noted that JKC failed to meet other key obligations, including obtaining an air operator certificate and international rights.
Impact of delays: $Loss of Rs 22 Crore per month
Long delays in Jet Airways revival lead to $The airline is losing Rs 22 crore every month due to asset maintenance. In addition, Jet Airways owes $The situation is further complicated by the return of Rs 7,500 crore to creditors.
Lenders accuse JKC of undermining revival efforts
Lenders accused JKC of deliberately delaying the airline’s revival, claiming its actions were designed to push the airline closer to liquidation to sell off its assets rather than resume operations.
Wider questions about India’s insolvency framework
The liquidation has raised serious concerns over the effectiveness of the Indian Bankruptcy Code (IBC), particularly in handling airline restructuring. The ruling follows the failure of another airline, Go firstThe company has also filed for liquidation, fueling doubts about the viability of the airline’s revival plan under the current framework.
