Jet Airways revival: NCLAT to rule on consortium plea against SBI on May 30

Lender says Jalan-Kalrock has not paid dues that had a deadline of May 15

The National Company Law Appellate Tribunal will on May 30 pass an order on an application by Jalan-Kalrock (JKC) consortium, which is reviving bankrupt Jet Airways, to stop State Bank of India (SBI) from invoking its bank guarantee of Rs 150 crore.

SBI told the tribunal on Friday that the consortium had not paid dues that had a deadline of May 15, as the consortium sought an interim injunction.

Jet's air operator certificate (AOP)-- revalidated by India’s aviation regulator on May 20 last year--expired on Friday, indicating that the airline is unlikely to start commercial flights anytime soon. By May last year, JKC had deposited Rs 150 crore with lenders as performance bank guarantee (PBG).

The National Company Law Tribunal (NCLT) last December asked lenders to hand over Jet Airways to the consortium. It asked the consortium to submit Rs 185 crore—as decided under the insolvency resolution plan—with lenders by May 14 this year so that ownership transfer can begin. The lenders have not received this amount as yet.

As per the resolution plan, JKC was required to deposit with lenders a PBG of Rs 150 crore in two tranches: first of Rs 47.5 crore when a committee of creditors (lenders) approves the resolution plan and second tranche of Rs 102.5 crore on "effective date" when all CPs (conditions precedent) were fulfilled.

A refundable earnest deposit of Rs 15 crore was made to the lenders in July 2020 when JKC submitted its resolution plan to lenders. The first performance bank guarantee tranche of Rs 47.5 crore was deposited in October 2020 when the committee of creditors approved the resolution plan. The remaining amount of Rs 87.5 crore was deposited in the second PBG tranche on May 20 last year—called the "effective date"—when all CPs were fulfilled.