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The Interim Resolution Professional (IRP) appointed for Jet Airways, Ashish Chhawchharia, today submitted progress report to National Company Law Tribunal ( NCLT), Mumbai in a sealed cover.
The IRP had initiated resolution process after NCLT admitted insolvency plea on June 20. Citing national importance, the NCLT admitted Jet Airways insolvency case by State Bank of India (SBI) and asked the IRP to give fortnightly report. The NCLT had directed to complete the process in an expedited manner within three months, instead of 180 days as mandated in the Insolvency and Bankruptcy Code (IBC). SBI had claimed that the lenders were forced to drag the airline to NCLT as the consortium of banks had waited long for the resolution plan to materialise.
While admitting the plea by SBI, the NCLT in its June 20 order said that the corporate debtor Jet Airways has more than 20,000 employees and its revival at the earliest by a viable resolution plan is essential. It refused to stay proceedings of the court based on the order passed by any foreign court, which is a nullity in the eyes of law. The NCLT while admitting, had also rejected an intervention application by Netherlands-based operational creditors, citing lack of cross-border jurisdiction. The NCLT said that we are not empowered to deal with the plea. The NCLT had further directed IRP to submit his fortnightly progress report to expedite CIRP of Jet Airways without delay of even a single day.
Counsel of IRP on Friday approached NCLT seeking directions restraining Directorate General of Civil Aviation (DGCA) from de-registering of a Jet Airways aircraft in Amsterdam. The lessor in resolution process had applied for de-registration of a aircraft operated by Jet airways and seized by an European cargo services provider in Amsterdam, over non-payment of dues in April this year. The aircraft was used for Jet Airways flight from Amsterdam to Mumbai.
However, IRP’s counsel argued that the aircraft is an asset of corporate debtor Jet Airways and its de-registration will have a ripple effect on other aircrafts. The counsel cited that if the number of aircrafts of Jet Airways go below 5, it’ll lose its status according to DGCA norms.
The NCLT, citing section 14 of IBC, rejected to pass a restraint order. However, it issued notice to DGCA to file reply by July 18 and to maintain status quo till it files a reply. According to section 14, after the resolution process has started, the adjudicating authority shall declare moratorium for prohibiting the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgement, decree or order in any court of law, tribunal etc. The NCLT said that the DGCA falls within this provision of IBC and it cannot pass a decree or an order in that regard and has asked DGCA to file a response.
Moreover, HDFC had moved a plea before NCLT, Mumbai claiming that the 3 floors of Jet office are mortgaged in its favour and cannot be part of resolution plan. The NCLT will hear the plea on July 23 along with main petition filed by SBI.
The SBI at the stage of admission had submitted that the aggregate amount of default as on June 15 as Rs. 462 .39 crores. It is the total overdrawn amount over the sanctioned limit of the cash credit facilities granted alone by SBI to Jet Airways.
According to the order of NCLT passed on June 20, total amount of debt granted to the Jet Airways by SBI alone stands at ₹1,795.21 Cr. There are several other financial creditors who have also granted a loan to Jet Airways. Also, default amount stated to be Rs. 462.3938 crore were overdrawn amount over sanctioned limits of the cash credit facilities by SBI alone.
Jet Airways owes more than Rs. 8,000 crore 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 crore.
The law firm Cyril Amarchand Mangaldas is appearing for SBI.