Jet Airways case: NCLT allows transfer of airline’s ownership to Jalan Kalrock Consortium

The National Company Law Tribunal (NCLT) on Friday allowed the transfer of Jet Airways’ ownership to Jalan Kalrock Consortium (JKC), which won the bid to resurrect the airline. The tribunal also approved the ownership effective date of the resolution plan as November 16, which means from this date onwards, the consortium gets six months or 180 days to settle lenders’ dues.

However, banking sources tell CNBC-TV18 that Jet Airways' lenders are set to appeal against the NCLT order allowing JKC's plea. Jet lenders had sought a two-week stay on NCLT orders, but the tribunal rejected their plea.

The order comes after the JKC had sought directions from the bench for the transfer of Jet Airways ownership and to set the ownership transfer date as the starting date for the 180-day deadline. However, Jet Airways’ lenders had opposed the transfer of ownership, stating the conditions precedent had not been met by the consortium.

This had been a point of disagreement between the Jet Airways lenders and JKC that caused a standoff, as the National Company Law Appellate Tribunal (NCLAT) order of October 21 stated that JKC has “completed all necessary conditions precedent to the satisfaction of the monitoring committee".

The effective date is not the transfer date; it is when conditions precedent as per plan are deemed to have been met. As per NCLT approved resolution plan, JKC is allowed 180 days from the effective date to make the payment to creditors.

NCLT reiterated NCLAT's October 2022 order which had found that the consortium had complied with all the necessary conditions precedent in connection with JAMEWA is Jet Airways Aircraft Maintenance and Engineers Workers Association (JAMEWA).

Jet Airways shut down in April 2019 over piling losses and a debt of about Rs 8,000 crore. A consortium of London-based Kalrock Capital and UAE-based entrepreneur Murari Lal Jalan emerged as successful bidders in the Jet Airways insolvency resolution process.

There were two deadlines which the JKC was supposed to meet but missed. First, the consortium needed to pay Rs 52 crore to workmen and employees of the erstwhile airline by November 11. The second was to do with the payment of Rs 185 crore to various lenders. The consortium had till November 16 to make this payment.

Meanwhile, amid growing differences between the consortium and lenders, earlier this week, JKC asked the airline monitoring committee's authorised representative Ashish Chhawcharia not to issue any communication on behalf of the grounded carrier without the approval of all the members of the committee. This was more than a week after Chhawchharia reportedly shot off a letter to Sanjiv Kapoor, asking him to refrain from using the title of CEO as he was only a CEO-designate.

The affairs of Jet Airways are currently being looked at by a seven-member Monitoring Committee (MC). Apart from Chhawcharia, there are three representatives, each from the consortium and financial creditors, respectively, in the panel.

In the letter on January 10, the consortium also sought a copy of the relevant minutes of the MC meetings in which the matter of CEO-designate Sanjiv Kapoor was "discussed and deliberated".