“The Joy Of Flying” Is Now Grounded: SC Orders Liquidation Of Jet Airways

The Supreme Court has ordered the liquidation of Jet Airways, previously led by Naresh Goyal, under the Insolvency and Bankruptcy Code (IBC) by exercising its extraordinary powers under Article 142. The court observed that liquidation is in the best interest of the airline’s lenders and employees, given that the Jalan Kalrock Consortium (JKC) has failed to comply with the approved Resolution Plan (RP) despite five years passing since its approval.

The bench, comprising Chief Justice of India Dr. DY Chandrachud, Justice JB Pardiwala, and Justice Manoj Misra, set aside the order of the National Company Law Appellate Tribunal (NCLAT), which had allowed the financially strained Jet Airways to transfer ownership to the Successful Resolution Applicant (SRA) without full payment as specified in the RP.

The current appeal arose from a batch of appeals, including one by lender State Bank of India (SBI), challenging the NCLAT’s decision that approved the airline's takeover by JKC. The Court has now directed the National Company Law Tribunal (NCLT), Mumbai Bench, to appoint a liquidator to initiate liquidation proceedings.

The Court found that the NCLAT’s order permitting the adjustment of the first payment tranche of Rs 350 crores against the Performance Bank Guarantee (PBG) was in “flagrant disregard” of its own January 18 order and was “perverse.”

Case Title : State Bank Of India And Ors. Versus The Consortium Of Mr. Murari Lal Jalan And Mr. Florian Fritsch And Anr.| C.A. No. 5023-5024/2024 And Connected

Advocate for Appellant (s):Adv. Mr. Vikas Mehta, AOR.Mr. Sanjay Kapur, Adv.Mr. Mayan Prasad & ors

Advocate for Respondent (s): Sr. Adv.Mr. Mukul Rohatgi,AOR.Mr. Pawanshree Agrawal & ors