Supreme Court orders liquidation of Jet Airways' assets, sets aside ownership transfer to JKC

The Supreme Court on Thursday excercised its extraordinary power under Article 142 of the Constitution to order the liquidation of assets belonging to the defunct airline Jet Airways.

The apex court set aside a recent decision by the National Company Law Appellate Tribunal (NCLAT), which had approved a resolution plan for the grounded air carrier and sanctioned the transfer of ownership to the Jalan Kalrock Consortium (JKC).

The three-judge bench, led by CJI DY Chandrachud, rapped NCLAT for its decision.

"We have no doubt that the NCLAT acted contrary to settled legal principles...NCLAT incorrectly interpreted our order," the bench, comprising Justices JB Pardiwala and Manoj Misra, said in its judgment.

Pronouncing the judgement for the bench, Justice Pardiwala allowed the plea of SBI and other creditors against the NCLAT decision that upheld the resolution plan of Jet Airways in favour of JKC. It said the liquidation of the air carrier was in the interest of creditors, workers and other stakeholders.

The appellate tribunal had not only upheld JKC’s resolution plan but also directed the Jet Airways monitoring committee to finalise the ownership transfer within 90 days.

The SBI, Punjab National Bank (PNB) and JC Flowers Asset Reconstruction Private Limited have challenged the NCLAT verdict.

The top court's verdict nullifies the NCLAT’s endorsement of JKC's plan, which had aimed to revive the grounded airline under new ownership.

Justice JB Pardiwala termed the litigation an "eye opener", saying it has "taught us many lessons about the IBC (Insolvency and Bankruptcy Code) and NCLAT."