SC sets aside NCLAT ruling, orders Jet Airways liquidation

The Supreme Court on Thursday ordered the liquidation of Jet Airways while setting aside a National Company Law Appellate Tribunal (NCLAT) ruling in March that upheld the transfer of the defunct airline's ownership to the Jalan-Kalrock Consortium (JKC) under an approved resolution plan.

- Utkarsh Anand

A bench led by Chief Justice of India (CJI) Dhananjaya Y Chandrachud, comprising justices JB Pardiwala and Manoj Misra, upheld the plea by State Bank of India (SBI) and other creditors challenging the NCLAT order, adding the court had to exercise its power under Article 142 to order liquidation of the debt-ridden air carrier because of the five-year delay in the completion of the resolution process.

"In the peculiar and alarming circumstances as discussed in this judgment and also keeping in mind the fact that almost five years have elapsed since the Resolution Plan was duly approved by NCLAT and there being no progress worth the name, we are left with no other option but to invoke our jurisdiction under Article 142 of the Constitution and direct that the corporate debtor be taken in liquidation," stated the bench, directing the National Company Law Tribunal (NCLT) to act accordingly.

According to the bench, a determination that the terms of the resolution plan have been contravened by the successful resolution applicant (JKC) and since the resolution plan is no longer capable of being implemented, the court must ensure that at least liquidation remains as a "viable" last resort for the corporate debtor and its creditors.