The Supreme Court ordered the liquidation of Jet Airways on Thursday, invoking its extraordinary powers under Article 142 of the Constitution to reverse a tribunal’s previous approval of a resolution plan for the airline. The court cited “peculiar and alarming” circumstances, including an incomplete payment to creditors by the Jalan-Kalrock Consortium (JKC), which had been cleared for ownership transfer despite failing to meet payment requirements.
Article 142 permits the Supreme Court to deliver rulings for “complete justice” in pending matters. In this case, a bench led by Chief Justice DY Chandrachud, along with Justices JB Pardiwala and Manoj Misra, found the resolution plan “no longer capable of implementation,” leaving liquidation as the only viable option. The decision followed a plea by creditors, including the State Bank of India and Punjab National Bank, who argued that liquidation was the last resort after JKC’s inability to fulfill the financial obligations set out in the plan.
“Liquidation must be available to lenders as a last resort… since resolution plan is no longer capable of implementation,” the court stated, emphasizing that liquidation would protect the interests of creditors, employees, and other stakeholders. The court also criticized the National Company Law Appellate Tribunal (NCLAT) for upholding the transfer of ownership to JKC without requiring full payment to creditors.
The NCLAT, in March, had approved the consortium’s bid to take over Jet Airways but stipulated an initial payment of ₹350 crore. JKC, however, failed to fulfill this condition, leading creditors to challenge the tribunal’s decision. The consortium was originally required to pay a total of ₹4,783 crore under the plan but had only infused ₹200 crore by the deadline.
As a result, the court ruled that the ₹200 crore would be forfeited and directed the NCLAT’s Mumbai bench to appoint a liquidator for Jet Airways. The consortium had earlier requested permission from the NCLAT to move the ₹200 crore to an escrow account but withdrew the request in May after the tribunal declined the plea, noting the Supreme Court’s involvement.
Jet Airways, once one of India’s leading airlines, was grounded in April 2019 due to severe financial troubles. Two years later, the Jalan-Kalrock Consortium, led by UAE-based Murari Jalan and Florian Fritsch of Kalrock Capital Partners Limited, successfully bid for the airline. Despite the formation of a monitoring committee to oversee the implementation of the revival plan, JKC faced multiple financial and legal setbacks, delaying Jet Airways’ return to the skies.
