Jet Airways Case: Top Court Asks Jalan-Kalrock Consortium To Deposit Rs 150 Crore By Month-End

The Supreme Court on Thursday directed the Jalan-Kalrock Consortium 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 for the grounded airline Jet Airways Ltd.

The top court's order comes against the backdrop of JKC's decision to pay its first tranche of Rs 350 crore through different payment methods.

The consortium had deposited Rs 200 crore towards the lenders led by SBI by the end of September last year and had adjusted the remaining Rs 150 crore from an existing performance bank guarantee.

The court said that this bank guarantee shall remain alive and that NCLAT's order from August last year, which allowed JKC to adjust the bank guarantee as part of its payment, be set aside.

The court has further directed the appellate tribunal to dispose of the pending appeal in an expeditious manner by the end of March.

The tribunal must also ascertain whether JKC has been compliant with the conditions of the resolution plan, the apex court said.

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.

The Jalan-Kalrock Consortium had 180 days from Nov. 16, 2022, to May 15, 2023, to pay their dues of Rs 350 crore to the State Bank of India, which is part of the monitoring committee responsible for the smooth running of Jet Airways' resolution plan.

This was the first tranche of payments that the consortium had to make as part of its resolution plan.

When the dues were not paid on time, the consortium approached the National Company Law Appellate Tribunal to restrain SBI from encashing the performance bank guarantees.

In May, the NCLAT observed that JKC was still in the process of implementing the resolution plan, and while SBI can invoke the performance bank guarantee, it cannot do so until the plan fails.

Thereafter, the appellate tribunal granted the consortium time till Sept. 30 to pay its dues to the bank.

On Sept. 29, JKC completed the payment of Rs 350 crore to Jet's creditors as part of its total equity commitment to revive the airline.