In a significant turn of events, the Supreme Court of India has ordered the liquidation of Jet Airways, setting aside the previous transfer of ownership to Jalan-Kalrock Consortium (JKC). The decision brings an end to the protracted efforts to revive the airline, which had been grounded since 2019 due to severe financial distress.
Background:
Jet Airways was once a prominent player in Indian aviation before grounding its operations in April 2019. The airline faced mounting debts, eventually leading to insolvency proceedings under India’s Insolvency and Bankruptcy Code (IBC). In 2021, JKC had emerged as the successful bidder and took steps towards re-launching operations. However, disputes arose regarding payments to creditors and unresolved liabilities, creating hurdles in Jet Airways’ revival process.
Court’s Rationale:
The Supreme Court observed that JKC failed to fulfill its financial commitments to the creditors, leading to further delays and complications in the insolvency resolution. The bench emphasized that failure to adhere to agreed timelines and obligations could not be ignored, especially when dealing with public funds and creditor interests. The court’s decision to initiate liquidation underscores its stance on strict compliance with IBC processes and creditor rights.
Implications:
With the liquidation order, Jet Airways’ assets will be sold off to recover dues for creditors, marking an end to attempts at reviving the airline. The decision impacts JKC’s plans to re-launch Jet Airways and is likely to lead to an extensive asset sale process to address the claims of employees, creditors, and other stakeholders.
Conclusion:
The Supreme Court’s ruling brings clarity to the prolonged Jet Airways insolvency case, emphasizing the necessity for strict adherence to financial commitments in the resolution process. The liquidation is expected to facilitate some recovery for creditors but effectively ends Jet Airways’ re-launch prospects under JKC.