Jet Airways Crisis: Lenders Stay Firm On Demand For Liquidation Of Airline

Jet Airways Ltd. lenders, led by the State Bank of India, told the Supreme Court on Thursday that Jalan-Kalrock Consortium's resolution plan for the airline's revival isn't sustainable anymore and re-iterated their stance on its liquidation.

Appearing for the lenders, Additional Solicitor General of India N. Venkatraman said that the consortium has committed several infractions and referred to the consortium as 'court birds', stating that they are only using the court's process for their benefit.

"As per the resolution plan, JKC is supposed to pay Rs 4,783 crore, but we are struggling to get the first tranche of Rs 350 crore," lenders argued.

As of today, the lenders have only received Rs 200 crore, Venkatraman said.

Airport dues to the extent of Rs 475 crore have not been paid and workmen dues to the tune of Rs 289 crore have not been paid. In addition to this, lenders are incurring Rs 22 crore every month on maintaining Jet's assets, he stated.

The consortium doesn't have an airworthiness certificate, Venkatraman added. They don't even have a security clearance to date. This clearance is crucial to operating an airline, he said.

The case has been adjourned for the day due to paucity of time and will be taken up by the court on Oct. 1.

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.

After multiple litigations that continued for nearly two years, the NCLT, in 2023, ordered the transfer of ownership of the airline to JKC in compliance with the resolution plan the tribunal previously approved.

In March this year, the NCLAT, too, gave a nod of approval for the transfer of Jet Airways' ownership to JKC.

It is important to note that in January this year, the top court directed JKC to deposit Rs 150 crore in an SBI escrow account by Jan. 31, failing which the consortium will be treated as being non-compliant with its resolution plan. 

However, the NCLAT allowed JKC to adjust its first tranche payment from the performance bank guarantee, which is in contradiction with the top court's orders.

During the last hearing before the top court in May, lenders alleged that JKC's resolution plan has become a complete nightmare and that it is not sustainable anymore.