New Delhi: The Supreme Court ordered the liquidation of Jet Airways’ assets on Thursday, invoking its “extraordinary” powers under Article 142 to overturn a tribunal’s decision approving a resolution plan that would have transferred ownership to the Jalan-Kalrock Consortium, despite incomplete payments to creditors.
Article 142 empowers the court to issue orders for “complete justice” in any case. Citing “peculiar and alarming” issues—particularly the flawed implementation of the resolution plan—the court declared it had “no choice but to send Jet Airways into liquidation.”
“Liquidation must be available to lenders as a last resort… given that the resolution plan can no longer be implemented,” stated Chief Justice DY Chandrachud, alongside Justices JB Pardiwala and Manoj Misra, while allowing a plea from creditors, including the State Bank of India and Punjab National Bank.
The court ruled that liquidation would best serve the interests of creditors, employees, and other stakeholders, while criticizing the National Company Law Appellate Tribunal (NCLAT) for approving the resolution plan despite outstanding payments to creditors.
On March 12, the NCLAT had upheld the resolution plan and approved the transfer of ownership to the Jalan-Kalrock Consortium (JKC), but creditors challenged this decision after the consortium reportedly failed to meet payment obligations.
A key issue before the Supreme Court was that the NCLAT allowed the transfer of ownership despite JKC’s failure to make an initial payment of ₹350 crore, as outlined in the resolution plan, which required a total payment of ₹4,783 crore.
In response, the court ruled that the ₹200 crore already infused would be forfeited and instructed the NCLAT’s Mumbai bench to appoint a liquidator.
JKC had previously requested the NCLAT’s permission to transfer ₹200 crore to an escrow account but withdrew the request in May after the tribunal declined, citing the ongoing Supreme Court hearing.
Jet Airways was grounded in April 2019, and two years later, ownership was successfully bid on by JKC—a consortium led by Murari Jalan, a UAE-based non-resident Indian, and Florian Fritsch, a Jet shareholder through the offshore holding company Kalrock Capital Partners Limited.
A monitoring committee was later established to oversee the implementation of the plan, but legal and financial delays have occurred. In May, Jet announced a delay in releasing its financial results for the quarter and year ending in March, stating that the monitoring committee would meet soon to finalize the data.
