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The Jet Airways saga came to an end on Thursday with the Supreme Court ordering the liquidation of the bankrupt airline. The court found that the successful bidder for the airline, the Jalan Kalrock Consortium (JKC), had failed to comply with the conditions of the resolution plan, marking the final chapter in the airline’s long struggle to revive itself.
Using its special powers under Article 142 of the Constitution, the Supreme Court decided to liquidate the airline after noting that JKC had not fulfilled key obligations outlined in the resolution plan. These included infusing the first tranche of ₹350 crore, paying worker dues, and settling essential costs like airport dues.
The court also set aside the March 2024 order of the National Company Law Appellate Tribunal, which had upheld the transfer of ownership to JKC. It criticized the NCLAT for disregarding its previous rulings and for allowing the order in favour of JKC without fully examining the facts.
The Supreme Court concluded that liquidation was the only viable option through which creditors could recover some of their dues.
Justice J.B. Pardiwala , who pronounced the ruling, remarked that this case served as an eye-opener for the functioning of insolvency tribunals and for India’s Insolvency and Bankruptcy Code.
The liquidation of Jet Airways, once India’s leading airline, raises broader questions about the effectiveness of the current IBC framework in handling airline insolvencies. This comes just as another airline, Go First, also failed to revive and filed for liquidation, adding to concerns about the viability of airline restructurings under the IBC.
An ‘unworkable’ plan
The verdict, which had been reserved on 16 October by a three-judge bench comprising Chief Justice D.Y. Chandrachud, Justice J.B. Pardiwala, and Justice Manoj Misra, came on a plea by lenders led by the State Bank of India.
They had challenged the National Company Law Appellate Tribunal’s March order upholding the transfer of the airline’s ownership to the Jalan Kalrock consortium.
The consortium—comprising UAE-based non-resident Indian Murari Lal Jalan and Florian Fritsch, who holds shares in Jet Airways through his Cayman Islands-based investment holding company Kalrock Capital Partners Ltd—had emerged as the successful bidder to revive the airline.
The lenders argued that JKC’s resolution plan was “unworkable” and urged the court to use its inherent powers under Article 142 to liquidate the airline. (Article 142 in the Constitution allows the Supreme Court to pass any order necessary for ‘complete justice’ in a case even if such its ruling is not within the scope of existing laws or procedures.)
While JKC claimed ownership of the airline and stated it was doing everything possible to restart its operations, the consortium accused the lenders of intentionally stalling efforts and pushing the airline closer to liquidation.
Jet Airways, founded by Naresh Goyal, went bankrupt in April 2019 and suspended its flight operations due to financial troubles.
JKC’s resolution plan promised an infusion of funds, clearance of creditors’ dues, and the revival of flight operations. However, the execution of the plan encountered significant delays, leading to a prolonged legal battle with the lenders that spanned over five years.
‘Serious consequences’
The dispute had first reached the Supreme Court in January 2024, when the court directed JKC to deposit ₹150 crore by 31 January 2024, warning of “serious consequences” if the payment was not made.
The court at the time set aside NCLAT’s order of August 2023, which had instructed JKC to submit a ₹150 crore performance bank guarantee to fulfil the total ₹350 crore obligation under the resolution plan.
The lenders had contested the encashment of the performance bank guarantee, and the Supreme Court clarified that the directive was incorrect and should be stayed.
The court also instructed NCLAT to dispose of all appeals in the case by March 2024, setting a hard deadline for the appellate tribunal to resolve the outstanding issues.
NCLAT’s March order
Despite the Supreme Court’s earlier intervention, the NCLAT, in its final order in March 2024, upheld the transfer of Jet Airways’ ownership to the Jalan Kalrock consortium.
The appellate tribunal set a 90-day deadline for the lenders to complete necessary formalities, including the transfer of ownership, securing an air operator certificate, and resuming operations. Additionally, NCLAT instructed the lenders to secure three Dubai-based properties belonging to Jet Airways, which were meant to act as collateral for the ₹350 crore payment required under the resolution plan.
This order placed JKC back in the driver’s seat for the airline’s revival. Still, the lenders were dissatisfied with the progress and moved the Supreme Court to challenge NCLAT’s March 2024 order, leading to the current deliberations.
Lenders’ allegations
During the Supreme Court hearings, the lenders, represented by Additional Solicitor General N. Venkataraman, accused JKC of failing to fulfil critical commitments outlined in the resolution plan. They argued that JKC had deposited only ₹200 crore of the ₹350 crore first tranche, falling short of the ₹150 crore in cash required under the earlier Supreme Court order.
The lenders further claimed that JKC had not met several other obligations, including securing an air operator certificate, international bilateral rights, and airport slots—essential for resuming flights. Additionally, they pointed out that JKC had not obtained security clearance from India’s home ministry, which is a requirement for operating the airline.
The lenders also emphasized the need to pay around ₹272 crore in dues owed to Jet Airways’ workers. They informed the court that JKC had failed to release Jet Airways’ three Dubai properties, making it difficult to complete the transfer of ownership.
The delay in finalizing the ownership process had led to monthly losses of ₹22 crore in maintaining Jet’s assets, while the airline still owed approximately ₹7,500 crore to its creditors.
In addition, the lenders raised concerns about JKC’s failure to cooperate with an investigation into the source of the ₹200 crore payment after Florian Fritsch, JKC’s co-founder, faced fraud and money laundering charges in Europe.
“This is a case of gross abuse of the Insolvency and Bankruptcy Code process,” Venkataraman argued. “The court must make it clear that the IBC is not for abuse, but a genuine facilitator for takeovers. Operators like this cannot come and play with the courts.”
Venkataraman also stressed that the committee of creditors, which includes over 30 banks, would be burdened with ₹1,100 crore in airport dues. He said that neither the CoC nor the employees would see anything, and the resolution plan had become unworkable.
JKC’s defence
JKC’s counsel, senior advocate Mukul Rohatgi, defended the consortium, accusing the lenders of deliberately stalling the revival of Jet Airways to push the airline into liquidation. Rohatgi argued that the lenders were more interested in selling Jet’s assets as scrap to maximize their returns than cooperating with JKC to revive the airline.
“They haven’t lifted a finger to help. They want to drive this plan into the ground so that they can sell the planes as scrap and get more,” Rohatgi told the court.
“I am not the bad guy. I am trying to get the company back in the air,” another senior counsel for JKC told the court.
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