The Supreme Court on Monday dismissed the appeal of Jalan Kalrock Consortium, the winning bidder to resurrect Jet Airways, that sought a stay on a National Company Law Appellate Tribunal (NCLAT) order directing the consortium to pay provident fund (PF) and gratuity to employees.
In an order issued in October 2022, NCLAT had told JKC to clear unpaid PF and gratuity dues of Jet Airways employees. Sources have earlier told CNBC-TV18 that this due amount works out to over Rs 200 crore — that’s till June 2019, when the insolvency process was initiated.
NCLAT had also dismissed the consortium’s plea to cap its payment liability at Rs 475 crore under the approved resolution plan. The break-up of the Rs 475 crore includes Rs 380 crore to be paid to lenders and Rs 52 crore to employees and workmen and the remaining towards other operational creditors, none of which has been paid as yet by the consortium.
Jalan-Kalrock had appealed against the NCLAT order in the Supreme Court stating that the order was erroneous and suffered from legal infirmities. It claims that the NCLAT order has put additional liability of Rs 202 crore on the consortium. If NCLAT order is not stayed, JKC as well as Jet will suffer irreparable loss and injury, leading to forced liquidation, it argued.
It pointed out that the payment to creditors under the resolution plan was limited at Rs 475 cr only whereas liabilities of PF and gratuity were never disclosed to the consortium in the Information Memorandum.
The consortium said the additional liabilities will jeopardise the resolution plan, which is at its last limb. According to JKC, NCLAT failed to consider that PF and gratuity are to be paid from PF and gratuity funds and also that the erstwhile owner of Jet failed to maintain PF and gratuity fund.
It claims that there is no provision in the resolution plan to bring in such additional amounts of payment. The plan clearly states apart from the amount approved, all dues of workmen and employees stand extinguished, JKC said.
NCLAT's order has resulted in a hydra head popping up for the JKC and has gone against the clean slate principle, the Jet bidding winner said.
Meanwhile, the lenders of Jet Airways appealed NCLAT on its January 13 ruling approving the transfer of the airlines to Jalan Kalrock Consortium. According to CNBC-TV18 sources, lenders contend that JKC has not met the requirements for the acquisition of Jet Airways and is trying to "avoid its obligations" under the authorised plan.
First Published: Jan 30, 2023 2:56 PM IST
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