NCLAT refuses to entertain JKC's plea
29 May 2024 CW Team
The winning bidder for the defunct Jet Airways, the Jalan Kalrock Consortium (JKC), retracted its NCLAT petition to transfer the Rs 2 billion it had paid lenders into an escrow account. Following the National Company Law Appellate Tribunal's (NCLAT) denial of JKC any redress, the withdrawal occurred.
According to a panel of the NCLAT led by Chairman Justice Ashok Bhushan, the case is currently pending at the Supreme Court. The Consortium of Florian Fritsch and Murari Lal Jalan thereafter retracted the request.
JKC had highlighted in its plea before the NCLAT that it should appoint the appropriate authorities to order the monitoring committee (MC) lenders to transfer the amount of Rs 2 billion infused by the successful resolution applicant (SR) until the shares of the corporate debtor (Jet Airways) are not issued to the consortium requesting a successful resolution in the share application account to an interest-bearing escrow account.
The consortium chose to withdraw its plea when the tribunal instructed the JKC to do so or risk being dismissed. Following the company's April 2019 flight cessation, the consortium was declared the successful bidder in the insolvency resolution procedure.
But because lenders and consortiums continue to disagree, ownership transfers have been on hold. On March 12 of this year, the NCLAT affirmed Jet Airways' resolution plan and authorised the company's ownership transfer to the JKC. It was ordered to pay Rs. 3.5 billion to start the transfer procedure. Nevertheless, it only made a cash payment of Rs 2 billion and requested that the lenders deduct Rs 1.5 billion from the performance bank guarantee it had provided.
This was opposed by the lenders; however, NCLAT directed that this be adjusted. Again, this was challenged before the SC by the MC and others, which set aside the NCLAT order and directed the JKC to deposit the money.