Jet Airways Insolvency: Jalan Kalrock Seeks To Implement Resolution Plan

Jet Airways Ltd.'s successful bidders, Murari Lal Jalan and the Kalrock Capital consortium, approached the Mumbai bench of the National Company Law Tribunal on Monday seeking to implement the resolution plan.

The consortium complied with all the conditions precedent necessary for the implementation of the resolution plan on May 20, its counsel, Krishnendu Datta, told the bench. The appellate tribunal recorded this fact in its order dated Oct. 21, he said.

The condition precedent here refers to business requisites necessary for the functioning of an airline, including several licences from the Directorate General of Civil Aviation and the Ministry of Civil Aviation.

As per the resolution plan, in addition to these licences, the resolution applicant is also required to get DGCA and MoCA's approval on the business plan. This entails the DGCA's approval for the reinstatement of Jet Airways' suspended slots. An international traffic rights clearance is another prerequisite. The demerger of the airline's subsidiary, Airjet Ground Services Ltd., was also part of the resolution. It further provided that the employees of the insolvent company would be transferred to AGSL.

According to the consortium, all these necessary conditions have been met.

Jet Airways' monitoring committee, however, has refused implementation of the resolution plan, citing the non-fulfilment of these conditions precedent. According to the committee, the successful bidder has failed to obtain international air traffic clearance as required under the plan.

The licence requirement, Jalan-Kalrock has argued, is redundant since it's only required for airlines operating with more than 20 aircraft. The plan proposes restarting the airline with only six aircraft.

The consortium further submitted that the resolution should be implemented at the earliest as a considerable time has elapsed since the effective date--the date at which all the conditions precedent are met. As per the resolution plan, the bidder was supposed to infuse Rs 250 crore into equity within 180 days from such a date. This time period ended in November 2022. 

Jet Airways went into insolvency after facing a severe funding crunch in 2019. The resolution plan submitted by the consortium of Murari Lal Jalan, a non-resident Indian, and Florian Fritsch of Kalrock Capital Partners Ltd. was approved two years later, in June 2021.

The Jet Airways Cabin Crew Association challenged the approval before the National Company Law Appellate Tribunal, citing concerns about pending salaries and retirement benefits in the plan submitted by the consortium. The NCLAT had directed the payment of provident funds and other benefits in its recent order.

In separate proceedings, the Cabin Crew Association has also approached NCLT Mumbai for liquidation of the company citing contravention of resolution plan.

The tribunal will continue hearing the matter on Dec 14.