Jet Airways Insolvency: NCLT Mumbai Bench extends Resolution Process by 90 days [Read Order]

Jet Airways Insolvency
Jet Airways InsolvencyNCLT Mumbai Bench

The Mumbai Bench of National Company Law Tribunal (NCLT) today granted extension to Corporate Insolvency Resolution Process (CIRP) of Jet Airways (India) Limited by 90 days.

A Bench of Judicial Member Bhaskara Pantula Mohan and Technical Member Rajesh Sharma passed an order on application made by Resolution Professional (RP) of beleaguered airline since CIRP deadline of 180 days ended on December 16.

The application was made after the Jet Airways Committee of Creditors (CoC) had sought extension after it received interest from two prospective investors.

In this regard, the Synergy Group, sole potential bidder for the grounded airline from South America had sought more time to take a decision on investing in Jet Airways.

The Columbia based Synergy Group is the only interested entity which has evinced interest and has been shortlisted by the Resolution Professional.

The Synergy Group had submitted that it may think of setting up a new company free of legacy liabilities of existing Jet Airways. Moreover, it had sought to resolve critical issues related to domestic and London Heathrow Airport slots.

Citing 'national importance' of the insolvency plea, the NCLT on June 20, this year had asked the RP to submit his fortnightly reports to expedite CIRP of Jet Airways without delay of even a single day.

The Tribunal had appointed Ashish Chhawchharia of Grant Thornton as Resolution Professional (RP) to oversee bankruptcy proceedings of the airline.

The RP was directed to complete the process in an expedited manner within three months, instead of 180 days as mandated in the IBC.

Since the stipulated time was to get over, Chhawchharia had filed a plea under section 12 (2) of Insolvency and Bankruptcy Code, 2016 (IBC) seeking an extension of CIRP period.

Section 12 (2) of the IBC empowers the adjudicating authority to grant extension to the CIRP beyond the stipulated timeline of 180 days, if there is a chance of revival of the corporate debtor.

It also prescribes that RP needs to be instructed to do so by a resolution passed at a meeting of the Committee of Creditors (CoC) by a vote of seventy-five per cent of the voting shares.

In his application, the RP had contended that the statutory period for completion of the CIRP expired on December 16 and the CoC, in its meeting held on November 19, this year had passed a resolution for extension.

After perusing minutes of the said meeting submitted on December 13, the Tribunal allowed an application for extension and ruled,

“It appears from the minutes of the said meeting that CoC passed a resolution with vote share of 90.08% for extension of the CIRP by 90 days. Given the resolution passed by the CoC, we hereby order for extension of 90 days’ period for completion of CIRP.”

After it was grounded in April, this year, insolvency proceedings against Jet Airways were initiated by consortium of banks led by State Bank of India (SBI).

Jet Airways owes more than Rs. 8,000 crores to lenders including consortium of banks led by the State Bank of India. The grounded airline also has a large debt by way of accumulated losses to the tune of Rs. 13,000 crore and vendor dues of over Rs. 10,000 crore and salary dues of over Rs. 3,000 crores.

The Tribunal has posted the matter for further hearing on insolvency plea to January 8, 2020.

90 days extension to Jet Airways CIRP.pdf
Bar and Bench - Indian Legal news