NCLAT order of Jet Airways takeover shocking, unacceptable: SBI tells SC

The State Bank of India on Monday said the order of the National Company Law Appellate Tribunal (NCLAT) upholding the transfer of grounded airline Jet Airways' ownership to Jalan Kalrock Consortium (JKC) is 'shocking' and 'completely unacceptable'.

"It is a shocking order and is completely unacceptable. It reverses a Supreme Court ruling on the Rs 150 crore bank guarantee. We are supposed to collect Rs 4,400 crore; they are struggling to repay Rs 300 crore now," Additional Solicitor General (ASG) Venkatraman, appearing for SBI, told the Supreme Court.

In response, Senior Advocate Mukul Rohatgi, appearing for JKC, said, "The order cannot be called shocking. Such words cannot be used for a court order."

The court did not issue notice in the case and said it would hear the matter on Friday, 26 April, since it was already 5:15 pm.

The National Company Law Appellate Tribunal (NCLAT) had on 12 March greenlit the transfer of ownership of Jet Airways to the Jalan Kalrock Consortium (JKC), the successful bidder for the grounded airline.

It upheld the order of the National Company Law Tribunal (NCLT), which had permitted the transfer of ownership to JKC in January last year. Consequently, the appeal by the State Bank of India (SBI) against the takeover of the airline by JKC was dismissed.

The lenders have appealed against this order in the Supreme Court.

Background

The appellate tribunal had directed the lenders to complete the transfer within 90 days and instructed JKC to obtain an air operator’s certificate within the same period.

The NCLAT had also allowed JKC to adjust Rs Rs 150 crore from its bank guarantee towards the first tranche of payment of Rs Rs 350 crore to the lenders.

The tribunal asked the lenders to create security on immovable properties as offered by JKC within 30 days from Tuesday. Upon the creation of such security, the lenders are to adjust the performance bank guarantee of Rs Rs 150 crore towards the payment of the same amount from the successful resolution applicant (SRA), i.e., JKC.

Within 30 days of the creation of security, the lenders have been directed to issue shares of Jet Airways to JKC and hand over the company. And within 30 days from the date of such handover, JKC and the lenders should complete all payments to the lenders as per the approved resolution plan, the appellate tribunal said.

“Before we close, we hope and trust that all concerned shall take steps to implement the resolution plan so as to make the first corporate insolvency resolution process (CIRP) of an aviation company in this country a success,” said the order by Chairperson Justice Ashok Bhushan and Member (Technical) Barun Mitra.