NCLAT Dismisses Jalan Kalrock's Plea, Clears Rs 400 Crore Jet Airways Aircraft Sale to Ace Aviation

22 Dec 2023 , 03:21 PM

The National Company Law Appellate Tribunal (NCLAT) dismissed Jalan Kalrock Consortium’s (JKC) plea challenging the sale of Jet Airways’ aircraft, dealing a setback to the successful resolution applicant.

The aircraft, set to be sold for Rs. 400 crore, are targeted for purchase by Malta-based Ace Aviation, which claims to have already deposited Rs 50 crore.

The NCLAT also rejected an appeal by the All-India Jet Airways Officers and Staff Association against the National Company Law Tribunal’s (NCLT) judgment.

According to the NCLAT, the aircraft sale does not impact the rights of any stakeholders, as the sale proceeds will be deposited in an escrow account and later distributed in line with the resolution plan.

The aircraft sale process was halted in November 2022 due to a deadlock in the monitoring committee involving financial creditors, the resolution applicant (Jalan Kalrock Consortium), and the resolution professional. Lenders were agreeable, but the consortium and former workers opposed the sale.

Workmen argued that the aircraft couldn’t be sold as they had a lien over them for non-payment of gratuity and provident fund dues.

Malta-based Ace Aviation, facing this deadlock, approached the NCLT. In October 2023, NCLT directed the committee to resume the process, considering Ace Aviation as an eligible bidder. Ace Aviation’s letter of intent to buy four Boeing 777 aircraft was accepted in 2022.

In September 2023, Ace Aviation expressed concerns that delays in the aircraft sale might compel them to explore other options, despite having already invested Rs 50 crore with an additional Rs 350 crore ready for investment.

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