State Bank of India (SBI), the primary lender to Jet Airways, has threatened to invoke bank guarantees worth ₹175 crore after Jalan Kalrock Consortium (JKC), the successful bidder for Jet Airways, failed to make the first payment installment, breaching the agreed norms. In response, JKC has sought intervention from the National Company Law Appellate Tribunal (NCLAT), and requested a stay on SBI’s actions. The tribunal has scheduled a hearing on the matter for Monday.
Meanwhile, Jet Airways’ Air Operator Certificate (AOC) expired on May 19, and the airline has not yet applied for its renewal. Consequently, Jet Airways does not meet the eligibility criteria for operating flights.
On May 22, the NCLAT will hear a plea from JKC, requesting directions to prevent SBI from invoking its bank guarantee of ₹175 crore. During the hearing on May 19, senior advocate Ravi Shankar Prasad, representing JKC, urged the court to grant an interim injunction to prevent SBI from invoking the bank guarantee. Gopal Jain, senior advocate for SBI, informed the court that the consortium was required to make certain payments by May 15, but had failed to do so.
Prasad argued that JKC was making every effort to fulfill its commitments but needed more time. Consequently, the tribunal decided to adjourn the case until May 22.
According to an order from the National Company Law Tribunal (NCLT) on January 13, the consortium was obligated to make the first payment installment to Jet Airways’ lenders before May 15. Failure to make the payment could result in SBI invoking the bank guarantee of ₹175 crore.
If the outstanding payments are not cleared, the ownership of the airline will not be transferred to the consortium. Additionally, Jet Airways’ air operator’s certificate is set to expire on May 19.
In January, the NCLT approved the transfer of Jet Airways’ ownership to JKC, stating that the conditions had been met. The tribunal set November 16, 2022, as the effective date for the resolution plan. Lenders of Jet Airways had approached the NCLAT, opposing the transfer of ownership to the consortium. They alleged that JKC had not fulfilled its obligations and argued against the ownership transfer.
Jet Airways was grounded in April 2019 due to substantial losses and a debt of approximately ₹8,000 crore. In October 2020, the airline’s Committee of Creditors approved the revival plan submitted by the Jalan-Kalrock consortium.