Rejecting objections raised by the lenders, the Mumbai bench of NCLT has allowed Jalan Kalrock Consortium (JKC) to take ownership of Jet Airways by May this year.

The NCLT has also allowed JKC to make the first tranche of payment to lenders under the resolution plan within 180 days of the transfer of the airline’s ownership. The decision paves the way for the relaunch of the airline, which was delayed due to the dispute between the new promoters and the lenders.

The matter has been in the NCLT since mid-November last year. JKC, the winning bidders for Jet Airways, had moved an application seeking control of the company, and an extension to make payments.

The two-judge bench comprising Justice Pradeep Narhari Deshmukh and Shyam Babu Gautam has given the consortium 180 days beyond the November 16 deadline to make payments to creditors and employees. The consortium has a lease of hope till May to make payments and revive the airline.

The lenders to Jet Airways had opposed this, stating the conditions precedents had not been met and were crucial for the revival and profitability of Jet Airways. The lenders said that the consortium has not complied with the requirements including approval of the business plan from the DGCA and MoCA, slot allotment approval, international traffic rights, and approval of the demerger of the ground handling business.

While the written order is yet to be uploaded, by allowing the application, the bench has essentially passed an order stating that the conditions have been met.

Rohan Rajadhyaksha, a lawyer appearing on behalf of the financial creditor, sought a stay on the order for two weeks, which was denied by the bench. Rajadhyaksha said the order maybe infructuous and, hence, should be stayed, but the bench refused to address it.

Sources said the lenders disagree that the conditions have been met and are likely to move NCLAT.

Amid the face-off between the lenders and JKC, some Jet Airways employees have decided to move on to other airlines. Sources say five out of 22 cabin crew, one out of five pilots, and the VP of HR have quit the company in the last three months.

However, the company has clarified that “over 200 professionals continue to be employed by the Jalan-Kalrock Consortium as on date”.

The dispute of overpayments of provident funds and gratuity continues to be heard in the Supreme Court.

Meanwhile, the AOP, which was granted to Jet Airways, expires in March. Once it expires, the entire process of finding nominees, submission of the business plan, and other procedures will have to be redone.

After the said order, a JKC spokesperson thanked “Jet Airways lenders and all stakeholders for their continued support in our journey, and we look forward to bringing the Joy Back to the Skies,” it said.

Meanwhile, an order said: “However having considered the rival submissions and on perusal of record with regards to satisfactory compliance of conditions precedent (CPs) it is noted that there is no dispute so far as satisfactory compliance of CPs at serial no. (i) and (v) as per approved plan (i) Validation of Air Operator Certificate by Directorate General of Civil Aviation (DGCA) and Ministry of Civil Aviation (MoCA) and (v) Approval of demerger of ground handling business into all capital AGSL. In this background we have thus considered if the remaining three CPs are duly complied with by the applicant or otherwise.”

comment COMMENT NOW