No More Jet Airways, Supreme Court Orders Liquidation

Jet Airways' assets will be liquidated, the Supreme Court said Thursday afternoon, invoking 'extraordinary' powers under Article 142 to set aside a tribunal's decision to uphold a resolution plan and transfer ownership - to the Jalan-Kalrock Consortium - without full payment to creditors.

Article 142 allows the court to make orders for 'complete justice' in any pending matter. In this instance, it noted "peculiar and alarming" circumstances of the case - referring to improper implementation of the resolution plan - and said it had, therefore, "no choice but to send Jet Airways into liquidation".

"Liquidation must be available to lenders as a last resort... since resolution plan is no longer capable of implementation," Chief Justice DY Chandrachud, Justices JB Pardiwala and Manoj Misra said, allowing a plea by creditors, including the State Bank of India and the Punjab National Bank.

One of the primary issues before the Supreme Court in this hearing was that the NCLAT had allowed transfer of ownership despite JKC failing to pay an initial ₹ 350 crore as required by the resolution plan. Overall JKC was required to pay ₹ 4,783 crore.

In this context, the court ruled the ₹ 200 crore already infused is to be forfeited and directed the NCLAT's Mumbai bench to appoint a liquidator.

Jet Airways was grounded in April 2019. Two years later, JKC - a consortium of Murari Jalan, a United Arab Emirates-based non-resident Indian, and Florian Fritsch, a Jet shareholder via an offshore holding company called Kalrock Capital Partners Limited-successfully bid for ownership.

Subsequently, a monitoring committee was set up to oversee plan implementation, but there have been legal and financial delays. In May Jet announced a delay in declaring financial results for the quarter and year ending March.