Supreme Court Orders Liquidation of Jet Airways
The Supreme Court of India has ordered the liquidation of Jet Airways, a once-prominent airline, using its extraordinary powers under Article 142 of the Indian Constitution. This decision was made after the court found that the resolution plan for the airline was not implemented. The court also overturned a previous order by the National Company Law Appellate Tribunal (NCLAT) that had approved the transfer of ownership to the Jalan Kalrock Consortium (JKC).
Details of the Court’s Decision
The decision was made by a bench consisting of Chief Justice of India DY Chandrachud, and Justices JB Pardiwala and Manoj Misra. The court described the situation as “peculiar and alarming” since the resolution plan had not been implemented for five years. As a result, the court directed that Jet Airways be liquidated and that Rs 200 crore be forfeited. The lenders, led by the State Bank of India (SBI), are allowed to encash the performance bank guarantee.
Background of the Case
The case revolves around the ownership of Jet Airways, which was grounded in 2019 due to financial difficulties. The NCLAT had previously allowed the transfer of ownership to JKC, a consortium led by UAE-based entrepreneur Murari Lal Jalan and UK-based Kalrock Capital, without complete payment as per the resolution plan. The lenders, led by SBI, challenged this decision in the Supreme Court.
The Supreme Court’s order allows the appeals filed by the lenders and directs the National Company Law Tribunal (NCLT) in Mumbai to appoint a liquidator immediately.
Doubts Revealed
Supreme Court -: The Supreme Court is the highest court in India. It makes important decisions on legal matters and ensures that laws are followed correctly.
Liquidation -: Liquidation means closing a company and selling its assets to pay off debts. It’s like when a shop closes and sells everything to pay back money it owes.
Jet Airways -: Jet Airways was a popular airline in India that used to fly people to different places. It stopped flying because it had financial problems.
NCLAT -: NCLAT stands for National Company Law Appellate Tribunal. It’s a special court in India that deals with company-related issues and disputes.
Jalan Kalrock Consortium -: The Jalan Kalrock Consortium is a group of investors who wanted to take over Jet Airways and try to make it successful again.
Chief Justice DY Chandrachud -: Chief Justice DY Chandrachud is a senior judge in India who leads the Supreme Court. He helps make important legal decisions.
Resolution plan -: A resolution plan is a detailed plan to solve a company’s financial problems. It’s like a strategy to help a company get back on its feet.
State Bank of India -: The State Bank of India (SBI) is the largest bank in India. It provides financial services like loans and savings accounts to people and businesses.
Performance bank guarantee -: A performance bank guarantee is a promise by a bank to pay money if a company doesn’t fulfill its obligations. It’s like a safety net for lenders.
NCLT Mumbai -: NCLT Mumbai is a branch of the National Company Law Tribunal located in Mumbai. It handles legal cases related to companies in that region.