On November 7, 2024, the Supreme Court of India ordered the liquidation of Jet Airways, stating it “had no choice” due to the Jalan-Kalrock Consortium’s (JKC) failure to implement a resolution plan approved five years ago. The court emphasized that JKC did not meet critical financial obligations, including a ₹350 crore payment, and deemed liquidation necessary to protect creditors and employees. Justice Pardiwala remarked that this litigation serves as an “eye-opener” regarding the Insolvency and Bankruptcy Code (IBC), marking a definitive end to efforts to revive the airline.
Supreme Court’s Ruling and Official Statements
The Supreme Court invoked its extraordinary powers under Article 142, asserting that the circumstances surrounding Jet Airways were “peculiar and alarming.” Justice JB Pardiwala noted that JKC had failed to inject promised funds and clear employee dues amounting to ₹226 crore. He stated, “This litigation is an eye-opener and has taught us many lessons about the Insolvency and Bankruptcy Code (IBC) and the functioning of the National Company Law Appellate Tribunal (NCLAT).” The court criticized NCLAT for allowing ownership transfer without full payment to creditors, reinforcing that liquidation was in the best interest of all stakeholders. The ruling mandates that the ₹200 crore already paid by JKC will be forfeited, and lenders are directed to invoke a performance bank guarantee of ₹150 crore to recover some losses.
Background on Jet Airways’ Financial Struggles
Jet Airways was grounded in April 2019 due to severe financial distress, leading to insolvency proceedings initiated by its largest creditor, State Bank of India (SBI). In 2021, JKC was selected as the successful bidder with plans to revive operations. However, significant delays in meeting financial commitments have plagued the consortium. The NCLAT had previously upheld JKC’s takeover despite these issues, but this decision was challenged by creditors who argued that JKC’s non-compliance with the resolution plan left them with no viable options for recovery. The Supreme Court’s ruling effectively ends a protracted legal saga surrounding the airline’s fate.
