The Mumbai bench of NCLT has reserved the order in the matter of Jet Airways. The Jalan Kalrock Consortium (JKC) has sought directions from the bench to hand over the company whereas the lenders had opposed it stating that the conditions precedent have not been met.

The bench heard the closing arguments by the consortium’s lawyers who said that it has met all the conditions as per the resolution plan and the lenders were looking to ‘modify the plan’ by seeking an undertaking from the JKC.

Deferred considerations

The lawyers on behalf of the lenders had argued that the consortium sought a few waivers on the conditions which would impact the revenues. The lawyers also said that the Successful Resolution Applicant (SRA) was ‘arm twisting’ and altering the resolution plan when it was asked to provide an undertaking. The undertaking, they argued, was to ensure that deferred considerations under the resolution plan will be paid by the consortium in its entirety.

The consortium had to pay another ₹195 crore in deferred considerations via Series-A zero coupon bonds within 730 days, or by May 20, 2022, after commencing operations. Apart from the bonds, there are debentures of ₹391 crore to be paid to lenders by Jet 2.0 by the end of five years from the date of starting operations.

The bench was informed by the lenders’ counsel that they were doubtfulwhether they would receive the said monies if the resolution plan wasn’t implemented properly, hence, the undertaking was required. 

SRA’s lawyers then argued that, “You (lenders) cannot accept a plan, approve a plan, and then ask for modification by way of an undertaking…. If we sign this undertaking, it will be a breach of your lordship’s order.” On the matter of the payouts, they said that they have to be made in a certain sequence, as per plan. “And now they want to change the contours of the financial plan. It’s almost as if the lenders do not want to implement that plan,” they argued.

After the SRA’s lawyers finished the arguments, the lawyers on behalf of the lenders said that they wanted ten more minutes to make two more points. However, the bench refused to hear the matter, and asked for a written submission on behalf of the lenders. The bench then reserved the order.