Jet Airways Case: Supreme Court Orders JKC to Deposit Rs 150 Crore Within Two Weeks, Signifying a Major Blow

19 Jan 2024 , 03:21 PM

The Supreme Court on January 18 ordered Jalan Kalrock Consortium (JKC), the winning resolution professional of the grounded airline Jet Airways, to deposit Rs 150 crore by January 31 (two weeks from now).

The funds are to be held in an escrow account between the State Bank of India and JKC.

The Supreme Court ruled that if JKC fails to provide the bank guarantee, legal penalties will follow. The NCLAT will now have to consider the State Bank of India’s petition contesting the transfer of Jet Airways’ ownership to JKC by the end of March 2024.

The court has set aside the ruling of the National Company Law Appellate Tribunal (NCLAT) dated August 2023, allowing JKC to adjust Rs 150 crore from an existing performance bank guarantee for infusing Rs 350 crore. According to the consortium’s pledge, they would pay Rs 100 crore by August 31, Rs 100 crore by September 30, and the remaining Rs 150 crore will be deducted from an existing performance bank guarantee.

The airline’s lenders strongly opposed the NCLAT’s decision to allow JKC to alter the Rs 150 crore bank guarantee on the grounds that it was a backup and could not be used at this time.

On August 18, 2023, when the consortium offered the payment plan, the appellate tribunal instructed it to file an application within 24 hours. The CoC informed the appellate tribunal that it may choose not to continue the challenge against the transfer of the airline’s ownership to the Jalan Kalrock Consortium provided it pays Rs 350 crore to meet condition precedents.

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