The Supreme Court on Wednesday reserved its judgment on the fate of the now-grounded Jet Airways after a month-long hearing. The case saw lenders, led by the State Bank of India (SBI), pushing for the airline’s liquidation, while the successful bidder, Jalan Kalrock Consortium (JKC), fought to prevent it.
A bench comprising Chief Justice of India DY Chandrachud and Justices JB Pardiwala and Manoj Misra heard the arguments from both parties before reserving the verdict.
Earlier this year, on March 12, the National Company Law Appellate Tribunal (NCLAT) had upheld JKC’s resolution plan, approving the transfer of Jet Airways’ ownership to the consortium. NCLAT had also directed JKC to obtain an air operator’s certificate within 90 days and extended the timeline for JKC to pay Rs 175 crore to SBI after 107 days had passed since the original ownership transfer order.
However, the lenders, which include SBI, Punjab National Bank, and JC Flowers Asset Reconstruction Private Limited, challenged the NCLAT’s decision. During the Supreme Court hearings, JKC alleged that SBI’s previous lending practices, which involved providing loans to companies without adequate security, contributed to the current financial issues.
SBI, in turn, argued that the Performance Bank Guarantee (PBG) of Rs 150 crore should not be utilized as outlined in the resolution plan until JKC executed the mortgage of three Dubai properties, which it had not yet done. SBI also stated that out of the Rs 350 crore promised in the first tranche of payments, JKC had only paid Rs 200 crore. Additionally, the bank pointed out that Jet Airways’ air operator certificate had expired in September 2023 and was not renewed, complicating the airline’s revival prospects.
The bank further requested the court to liquidate Jet Airways, expressing uncertainty over how to proceed given that the resolution plan was not being fully implemented. SBI also called for JKC to pay the outstanding airport dues and criticized the consortium for lacking a clear plan to execute the resolution plan.
Jet Airways, once a prominent player in India’s aviation industry, was grounded in 2019 and has since undergone an insolvency resolution process. In 2021, JKC emerged as the winning bidder to revive the airline, but the ongoing legal battle with the lenders has cast doubt on the airline’s future.
The Supreme Court’s final verdict is now awaited to determine the next steps for the airline, which has been grounded for over four years.
