The Jalan Kalrock Consortium on Tuesday told the Supreme Court that the State Bank of India wants to drive Jet Airways' resolution plan into the ground.
SBI has been acting as a thorn in the execution of the resolution plan as it wants to sell Jet’s assets as scrap, JKC argued.
Jalan Kalrock ConsortiumSBI believes that they will get more money by selling the assets than what they will get under the plan.
We are dealing with an airline; it is not like buying a house. Various extraneous circumstances have to be dealt with, and the SBI has not raised a single finger to help us, senior counsel Mukul Rohatgi argued for JKC.
SBI has created hindrances every step of the way, Rohatgi said.
In response to SBI’s argument that JKC has not complied with conditions precedent in the resolution plan, Rohtagi said that all conditions precedent were complied with as of May 2022.
Notably, SBI has argued that JKC has failed to comply with the conditions precedent in the resolution plan. SBI has contended that the consortium has failed to pay off the workers’s dues, they have failed to get an air operation certificate, and they have failed to get the international traffic rights clearance, which is crucial to running an airline.
Rohatgi said that JKC's airport slots were taken away because the company was not in the consortium’s control, and the air operation certificate was not renewed for the same reason.
It was argued that the SBI has challenged JKC’s actions before different forums, depriving it of the ability to run the airline. This deliberate action of the SBI led the consortium to lose its 48 airport slots, Rohtagi said.
JKC will continue arguing its case before the court on Oct. 3.
Jet Airways went into insolvency after facing a severe funding crunch in 2019.
The resolution plan submitted by the consortium of Murari Lal Jalan—a non-resident Indian—and Florian Fritsch of Kalrock Capital Partners Ltd. was approved two years later, in June 2021.
After multiple litigations that continued for nearly two years, the NCLT, in 2023, ordered the transfer of ownership of the airline to JKC in compliance with the resolution plan the tribunal previously approved.
In March this year, the NCLAT, too, gave a nod of approval for the transfer of Jet Airways’ ownership to JKC.
It is important to note that in January this year, the top court directed JKC to deposit Rs 150 crore in an SBI escrow account by Jan. 31, failing which the consortium will be treated as being non-compliant with its resolution plan.
However, the NCLAT allowed JKC to adjust its first tranche payment from the performance bank guarantee, which is in contradiction with the top court’s orders.
During the hearing before the top court in May, lenders alleged that JKC's resolution plan has become a complete nightmare and that it is not sustainable anymore. The lenders have not budged from their stand and have maintained that liquidation of the airline is the only step forward.
Jet Airways Crisis: Lenders Stay Firm On Demand For Liquidation Of Airline. Read more on Business News by NDTV Profit.