In a landmark decision, the Supreme Court has directed the liquidation of Jet Airways’ assets, invoking its extraordinary powers under Article 142 of the Constitution. The court’s ruling comes after it set aside a National Company Law Appellate Tribunal (NCLAT) order that had previously upheld a resolution plan for the airline, which included the transfer of ownership without full payment.
Article 142 grants the Supreme Court the authority to pass orders for “complete justice” in cases where justice may not be fully served by the law. In this case, the court emphasized the “peculiar and alarming” circumstances surrounding the resolution plan, which has remained unimplemented for over five years since it was first approved. Given the prolonged failure to execute the plan, the court stated it had “no choice” but to order the liquidation of the airline, concluding that this was the only viable option for creditors.
A bench comprising Chief Justice DY Chandrachud and Justices JB Pardiwala and Manoj Misra, while allowing an appeal by the State Bank of India (SBI) and other creditors, underscored that liquidation should be a last resort. The bench pointed out that the resolution plan was no longer capable of being implemented and that liquidation would serve the best interests of creditors, employees, and other stakeholders.
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The court’s verdict also included a sharp critique of the NCLAT’s decision to permit the resolution process to continue despite the ongoing challenges. Additionally, the court ordered the forfeiture of a Rs 200 crore investment made by JKC (the potential new owners), and directed lenders to invoke the Performance Bank Guarantee of Rs 150 crore.
This decision marks a significant chapter in the protracted saga of Jet Airways, which has been grounded since April 2019. Despite attempts at revival through various resolution plans, the airline’s future remains uncertain, with creditors including SBI and Punjab National Bank, among others, pushing for a resolution. The liquidation order marks the end of the road for hopes of a successful revival under the current plan.
