NCLT moratorium saves Jet from being evicted from its HQ

Forum Gandhi Mumbai | Updated on June 21, 2019 Published on June 21, 2019

A moratorium ordered by the National Company Law Tribunal (NCLT) may save Jet Airways from being evicted from its corporate headquarters in Mumbai. The debt-strapped airline was facing eviction from Siroya Centre, the headquarters of the airline, on Friday as the building lease ends this month. The airline would have found it difficult to find funds to renew the lease agreement.

However, the NCLT in its order issued on Thursday declared a moratorium under Section 14 of I&B Code on “the recovery of any property by an owner or lessor where such property is occupied by or in possession of the corporate debtor (Jet Airways)”.

According to a source, the Regional Labour Commissioner was informed in a hearing between an employee association of Jet Airways and the management on Wednesday that “Siroya Centre is likely to be sealed on Friday (June 21).”

“There was an eviction notice, they had planned to shut down earlier last week; however, that did not happen. Efforts are being made to ensure that this does not happen,” said another source.

On Thursday, the Mumbai bench admitted the case of financial creditor State Bank of India. Among other points, the order also stated that it was prohibited for the assets of the airline to be disposed of or transferred.

Resolution professional

The bench appointed Ashish Chhawchharia as the insolvency resolution professional (IRP). The court also directed the IRP to take control of all assets of Jet Airways immediately and submit his first progress report by July 5.

Jet Airways has four leased properties: Siroya Centre (Jet’s headquarters in Andheri, Mumbai), Starhub, Kaledonia, the training centre at Sahar and a mortgaged property in BKC.

Currently, the headquarters is functional only on Tuesdays and Thursdays. Jet Airways had temporarily shut down operation on April 17. Meanwhile, three Jet Airways office at Mumbai airport were taken back by the airport authorities and the employees were asked to shift their furniture and other equipment from the premise.

A query sent to MIAL remained unanswered till the time of going to press. However, a source said, “The airline has several months’ dues payable to the airport, and even after the temporary shutdown of the airline, the employees used to come to the airport. However, the premise was not making any money. Hence, the airport had decided to take the office spaces under its custody.”

Published on June 21, 2019
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