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regular-article-logo Thursday, 18 July 2024

NCLAT reserves order on Jalan-Kalrock Consortium's plea over payment of Jet Airways dues

While Jet Airways had stopped flying in April 2019, JKC had subsequently emerged as the winning bidder for the airline. However, persisting differences between JKC and the lenders have led to delay in the transfer of ownership, with the carrier yet to commence operations

Our Special Correspondent Mumbai Published 22.08.23, 09:49 AM
Representational image

Representational image File picture

Mumbai: The National Company Law Appellate Tribunal (NCLAT) on Monday reserved its order on a plea from Jalan-Kalrock Consortium (JKC) seeking more time to make payments to the lenders of Jet Airways.

JKC has to pay Rs 350 crore to the lenders by August 31. It has, however, sought an extension to make the payment.

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While Jet Airways had stopped flying in April 2019, JKC had subsequently emerged as the winning bidder for the airline after an insolvency resolution process.

However, persisting differences between JKC and the lenders have led to delay in the transfer of ownership, with the carrier yet to commence operations.

On Monday, a three-member NCLAT bench said it will pass the order next Monday even as it granted three days’ time to the parties to file their written submissions.

“Heard learned counsel for the parties... orders on August 28, 2023. Parties are at liberty to file their short notes of submission of not more than three pages within three days,” the appellate tribunal said.

A PTI report said that the bench would also decide the consortium’s plea to consider a performance bank guarantee of Rs 150 crore as part of the payment of Rs 350 crore.

The consortium had submitted that it will deposit Rs 100 crore by August 31.

After that, they would deposit another Rs 100 crore by September 30.

For the residual amount, a proposal was mooted for the lenders to encash a performance bank guarantee lying in their favour having a similar value. The lenders have opposed the encashment of the performance bank guarantee.

At the NCLAT hearing, additional solicitor-general N. Venkatraman, appearing for the lenders, opposed the encashment of the performance bank guarantee.

He also opposed the extension and said that half of Rs 350 crore will go towards clearing the regulatory dues.

Senior advocate Vikas Singh, who was also appearing for the lenders, said the dues have jumped to Rs 12,000 crore from Rs 7,800 crore four years back when Jet Airways stopped flying.

Besides, the managing committee also has to maintain 11 of the defunct airline’s planes. However, senior advocate Ravi Shankar Prasad appearing for the consortium alleged the committee of creditors was more interested in money than reviving the company.

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

Aviation safety regulator DGCA has renewed with conditions the Air Operator Certificate (AOC) of Jet Airways until September 3.

The AOC was re-issued on May 20, 2022. However, since the airline did not start operations, it expired on May 19 this year.

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