SC dismisses JKC's plea challenging NCLAT order on sale of Jet Airways aircraft

The Supreme Court on Thursday turned down Jalan Kalrock Consortium's (JKC) plea, wherein it challenged the National Company Law Appellate Tribunal (NCLAT) order that allowed the sale of aircraft belonging to Jet Airways. 

The NCLAT previously had allowed Malta-based company Ace aviation to buy the aircraft. The company had previously claimed that it had already deposited to Rs 50 crore for the deal. 

Jalan Kalrock Consortium, which successfuly bagged the deal to revive Jet Airways, had filed an appeal before the appex court in February 2024 objecting to the sale. 

On Thursday, the apex court told JKC that the bench did not find anything wrong with the NCLAT order and noted that the sale of aircraft could benefit JKC as the sale would infuse more funds and help in the revival process.  

In December last year, the NCLAT dismissed an appeal by JKC noting that the sale of aircraft does not affect the rights of any of the stakeholders in the airline as the sale proceeds will be deposited in an escrow account. The proceeds will subsequently be distributed in accordance with the resolution plan.

The sale of three aircraft for Rs 400 crore was halted in November 2022 due to a deadlock in the monitoring committee involving financial creditors, JKC, and Jet Airway's resolution professional. Lenders supported the sale, but the consortium and former employees objected, which delayed the process.

In June 2021, the NCLT approved the resolution plan for Jet Airways submitted by the Jalan-Kalrock consortium. The consortium has Murari Lal Jalan and and Florian Fritsch. Jalan is a UAE-based non-resident Indian who had shares in Jet Airways in his personal capacity. On the other hand, Florian Fritsch held shares through his investment holding company Kalrock Capital Partners Ltd, Cayman.

In January this year, the apex court directed JKC to pay Rs 150 crore by January 31, or face “serious consequences". In January this year, the apex court directed JKC to pay Rs 150 crore by January 31, or face “serious consequences". The consortium was instructed to deposit Rs 150 crore in the State Bank of India's escrow account by January 31, underlining the critical adherence to the terms outlined in the resolution plan aimed at reviving the airline.

The bench, headed by Chief Justice D Y Chandrachud, alongside justices JB Pardiwala and Manoj Misra, highlighted that non-compliance with the deposit deadline would render the consortium in violation of the resolution plan's terms. Simultaneously, the court declined a separate plea from the Jet Aircraft Maintenance Engineers Welfare Association, seeking payment of provident fund and gratuity dues. The court reasoned that any additional financial burden would make the resolution plan "unworkable."