NCLAT Allows Jalan Kalrock Consortium More Time To Repay Dues To SBI

The National Company Law Appellate Tribunal (NCLAT) has granted the Jalan Kalrock Consortium, the successful bidder for Jet Airways’ takeover, an extension of time to make payments to the State Bank of India (SBI). The NCLAT has allowed an additional 97 days for the consortium to settle its dues to SBI, exempting the period from 16 November 2022, when the ownership process was set to begin, to 3 March 2023. 

On 22 May, the tribunal reserved its decision on the consortium’s plea to prevent SBI from invoking its performance bank guarantee of Rs 150 crore. Although the order was initially scheduled for 30 May, the NCLAT chose to pronounce it ahead of time. 

The National Company Law Tribunal (NCLT) had previously approved the transfer of Jet Airways to the Jalan Kalrock Consortium led by Kalrock Capital based in London and entrepreneur Murari Lal Jalan based in the UAE. The NCLT also set a deadline of 15 May for the consortium to make payments, allowing 150 days from the start of the ownership proceedings. However, the recent exemption granted by the NCLAT provides the consortium with additional time. 

The consortium was required to make the first payment instalment to Jet Airways’ lenders before 15 May. However, they failed to do so, raising concerns that SBI would invoke the performance bank guarantee of Rs 150 crore in lieu of Rs 175 crore worth of outstanding dues. Failure to make the payment would prevent the transfer of ownership of the airline to the consortium. Furthermore, Jet Airways’ air operator’s certificate expired on 19 May. 

Lenders of the airline approached the NCLAT opposing the transfer of ownership to the consortium, alleging that the consortium had not fulfilled its obligations. 

Jet Airways ceased operations in April 2019 due to mounting losses and a debt of approximately Rs 8,000 crore. In October 2020, the airline’s Committee of Creditors (CoC) approved the revival plan presented by the Jalan-Kalrock consortium.