 "NCLAT dismisses JKC's plea challenging sale of Jet Airways aircraft")
The National Company Law Appellate Tribunal (NCLAT) on Friday dismissed an appeal of Jet Airways bidder Jalan Kalrock Consortium (JKC) challenging the sale of aircraft belonging to the grounded airline.
The tribunal had reserved its order on an appeal filed by JKC against the National Company Law Tribunal (NCLT) order asking the airline’s monitoring committee to conclude the sale of the Jet aircraft.
All-India Jet Airways Officers and Staff Association had also filed an appeal against NCLT’s order. This was also dismissed by the NCLAT on Friday. JKC had argued that the NCLT’s order for the sale of the aircraft was beyond its jurisdiction. It said the sale was put on hold in November 2022 because of a disagreement in the Monitoring Committee (MC), which has JKC and the lenders.
JKC said the lenders were stopping it from taking over the airline fully. Meanwhile, Malta-based Ace Aviation, which is the prospective buyer of the aircraft in question, said with each passing moment the aircraft’s value depreciates and submitted that the NCLT had directed the sale proceeds of Rs 400 crore to be deposited in an escrow account. It also said the MC may decide how to distribute the sale proceeds among themselves. The company had claimed to have already deposited Rs 50 out of Rs 400 crore and was planning to deposit the rest of the amount too. Additional Solicitor General (ASG) Venkatraman, appearing for the lenders, had said they were losing public money to keep the airline afloat due to maintenance costs.
NCLAT on Friday said the sale of aircraft does not affect the rights of any of the stakeholders as the sale proceeds will be deposited in an escrow account. These proceeds will then be distributed as per the resolution plan.
The NCLT in October had directed the MC to reinitiate the process and conclude the sale of the aircraft after considering the applicant as one of the eligible bidders.
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The MC in 2022 accepted Ace Aviation’s letter of intent to buy three aircraft. Malta-based Challenge Group had successfully bid through its special purpose vehicle - Ace Aviation for three B777-300 aircraft of Jet Airways.
"We appreciate the NCLAT's decision to allow the sale of Jet Airways aircraft to Ace Aviation. We recognise the importance of closing the deal swiftly to prevent any loss in asset value as the longer sale process would deteriorate the aircraft's condition further and impact the commercial viability of the deal. We are confident that all parties involved will continue to cooperate in a practical and pragmatic approach, aligning with aviation standards, to expedite the completion of this transaction," said Eshel Heffetz, CEO of The Challenges Airlines.
Sale Saga
- NCLAT had reserved its order on the appeal filed by JKC, against the NCLT order for the sale of Jet’s aircraft
- JKC argued that the NCLT’s order for the sale was beyond its jurisdiction
- Ace Aviation, the prospective buyer, said the aircraft's value depreciates with each passing moment
- NCLT had directed Ace Aviation to deposit the sale proceeds of Rs 400 crore in an escrow account
- NCLAT said the sale does not affect the rights of any of the stakeholders as the sale proceeds will be deposited in an escrow account