In a significant ruling, the Supreme Court of India on Thursday exercised its extraordinary powers under Article 142 of the Constitution to order the liquidation of the grounded airline Jet Airways.
The decision came after the court found that the resolution plan for the airline had not been implemented for 5 years. This ruling also set aside the National Company Law Appellate Tribunal order that had approved the transfer of ownership to the Jalan Kalrock Consortium.
The bench, comprising Chief Justice DY Chandrachud, Justice JB Pardiwala, and Justice Manoj Misra, cited “peculiar and alarming” circumstances as the basis for their decision. “We exercise plenary powers and direct that the corporate debtor is taken into liquidation. Appeals succeed.
NCLAT order set aside. Given that five years have passed since NCLAT cleared the resolution plan, we direct that the corporate debtor be liquidated, and Rs 200 crore stands forfeited,” the court stated. Additionally, the lenders were permitted to encash the performance bank guarantee, and the National Company Law Tribunal in Mumbai was instructed to appoint a liquidator immediately.
The NCLAT had previously allowed the transfer of Jet Airways’ ownership to JKC, despite incomplete payments under the resolution plan. This case centers on the ownership dispute between JKC and several of Jet Airways’ lenders, primarily led by the State Bank of India (SBI).
The lenders challenged the NCLAT’s March 12 order, which upheld the ownership transfer to JKC, a consortium that includes UAE-based entrepreneur Murari Lal Jalan and UK-based Kalrock Capital.
Jet Airways has been grounded since 2019 due to severe financial difficulties, and the failure to implement a resolution plan has drawn significant attention.
The Supreme Court’s decision marks a critical moment in the long saga of Jet Airways, as it paves the way for liquidation and potentially provides a resolution for creditors who have been awaiting recovery for years.
This ruling not only underscores the judiciary’s commitment to upholding financial discipline but also signals the court’s willingness to take decisive action in cases where resolution plans are not followed. The future of Jet Airways now rests with the appointed liquidator, who will oversee the liquidation process and manage the airline’s remaining assets.
As the situation develops, stakeholders will be closely monitoring the implications of this decision for the broader aviation sector in India.
