Supreme Court Ordered Liquidation Of Jet Airways On Failure Of Resolution Plan

The Supreme Court in the case State Bank of India and Ors versus the Consortium of Mr. Murari Lal Jalan and Mr. Florian Fritsch and Anr observed and has invoked its extraordinary powers as stated under Article 142 of the Constitution of India to order the liquidation of Jet Airways in view of the peculiar and alarming circumstance that the resolution plan has not been implemented for five years.

The court in the case observed and has set aside the National Company Law Appellate Tribunal, NCLAT wherein the Tribunal allowed the cash-strapped Jet Airways' ownership transfer to the Successful Resolution Applicant, SRA without complete payment in accordance with the resolution plan.

The court in the case observed and has directed the National Company Law Tribunal, NCLT Mumbai Bench to appoint a liquidator forthwith. The amount of Rs 200 crores paid by the SRA stands forfeited.

The bench comprising of Chief Justice of India DY Chandrachud and Justice JB Pardiwala and Justice Manoj Misra was hearing the present matter.

The bench in the case reserved the judgment dated October 16.

The National Company Law Appellate Tribunal, NCLAT order was challenged by SBI-led lenders of the cash-strapped Airlines.

Illegalities in the NCLAT order allowing ownership transfer The bench headed by Justice Pardiwala in the case orally stated before the pronouncement that, 'The said litigation is an eyeopener and it has taught us many lessons about the IBC and the functioning of National Company Law Appellate Tribunal, NCLAT.

The court in the case held that the order of National Company Law Appellate Tribunal, NCLAT to allow the adjustment of the first tranche of payment of Rs 350 crores against the Performance Bank Guarantee, PBG was in flagrant disregard of the order of the Supreme Court dated January 18 and was perverse.

The court in its judgment observed that, 'This court have no doubt that the NCLAT acted contrary to settled legal principles... NCLAT incorrectly interpreted our order.

Observations Made By The Court: