Supreme Court Sends Jet Airways into Liquidation as Jalan Kalrock Consortium’s Resolution Plan Fails
After years of attempts to revive Jet Airways, the Supreme Court has ordered liquidation, citing the Jalan Kalrock Consortium's inability to fulfill its obligations under the resolution plan.
On November 7, the Supreme Court of India ordered the liquidation of Jet Airways, the once-prominent airline that has been grounded since April 2019. The Court ruled that there was no viable option left but to proceed with liquidation, as the Jalan Kalrock Consortium (JKC), the winning bidder in the insolvency process, failed to implement its resolution plan as required. This decision ends years of efforts and hopes to bring Jet Airways back to the skies and will have far-reaching implications for creditors, employees, and the Indian aviation industry.
Jet Airways, once the largest private airline in India, faced financial distress that led to its grounding in 2019. Following its insolvency, the company was admitted into the National Company Law Tribunal (NCLT) in June 2019. In October 2020, JKC, a consortium led by UAE-based businessman Murari Lal Jalan and the UK’s Kalrock Capital, was selected as the successful resolution applicant. Their resolution plan included commitments to infuse capital and resume operations, a prospect that initially brought renewed hope for Jet Airways’ revival.
However, more than three years after being chosen as the winning bidder, JKC has not been able to fulfill its obligations under the resolution plan. The consortium reportedly struggled with delays in securing regulatory approvals and lacked sufficient funds to meet its financial commitments. Creditors and other stakeholders have grown increasingly frustrated over the prolonged period with no substantive progress. With JKC’s failure to execute the plan, creditors sought intervention from the Supreme Court, arguing that liquidation was the only feasible option to recover a portion of their dues.
During the hearing, the Supreme Court observed that JKC had ample time and opportunities to implement the plan but had failed to do so. The Court emphasized the need for closure, stating that the creditors and employees have been kept in limbo for years. Noting that there was “no other choice,” the Supreme Court concluded that liquidation would be in the best interest of all stakeholders. This decision signals the final chapter for Jet Airways, as liquidation will involve the sale of remaining assets to recover some funds for creditors.
The Court’s ruling has dealt a significant blow to the employees, creditors, and former passengers of Jet Airways, who were hopeful of the airline’s return. Employees who had pinned their hopes on JKC’s promises of resuming operations now face the harsh reality of liquidation. Many of these employees have been in prolonged financial distress due to unpaid salaries and lack of alternative employment options within the aviation industry. Creditors, who are owed thousands of crores, are also left to brace for significant losses, as liquidation is likely to recover only a fraction of their outstanding claims.
Experts argue that this outcome highlights the challenges and risks associated with the insolvency resolution process in India’s aviation sector. The grounded airline industry requires high capital expenditure and regulatory compliance, making it challenging for prospective investors to implement resolution plans successfully. Jet Airways’ case also underscores the importance of assessing a bidder’s ability to meet financial and operational requirements within stipulated timelines.
Despite JKC’s claims of a commitment to Jet Airways, their inability to follow through with the resolution plan raises questions about the due diligence process in selecting a resolution applicant. This liquidation marks one of the highest-profile insolvency cases in Indian aviation and is likely to impact future restructuring efforts within the sector.
The path forward for Jet Airways now rests on asset liquidation, which will be managed by the appointed liquidator under the Insolvency and Bankruptcy Code (IBC) framework. The sale of assets, which include planes, landing slots, and brand rights, may attract interest from industry players looking to expand their presence in the aviation market. However, the liquidation process itself could take time, and the final recovery for creditors remains uncertain.
As the curtain falls on Jet Airways, a once-iconic airline that set standards in Indian aviation, this Supreme Court decision serves as a reminder of the complexity and difficulties involved in reviving distressed companies in highly competitive sectors.
Discover more from trilokmedia.in
Subscribe to get the latest posts sent to your email.
