Supreme Court Orders Jet Airways Liquidation: A Landmark Judicial Intervention

The Supreme Court has ordered the liquidation of Jet Airways, criticizing NCLAT for permitting financial adjustments that breached court instructions. The decision ends a five-year insolvency process, leading to forfeiture of funds by Jalan Kalrock Consortium and liquidation initiation, underscoring the urgency of compliance with resolution plans.

The Supreme Court has intervened decisively in the Jet Airways insolvency case, mandating the liquidation of the troubled airline. This move comes as part of a critique against the National Company Law Appellate Tribunal (NCLAT). The court's decision includes forfeiting Rs 200 crore invested by Jalan Kalrock Consortium and permitting lenders, led by the State Bank of India (SBI), to encash a Rs 150 crore performance bank guarantee.

This decisive action by the bench, invoking extraordinary powers under Article 142 of the Constitution, underscores a stringent reply to the NCLAT's previous allowance for financial adjustments. Calling the issue an 'eye-opener,' the bench highlighted that the NCLAT had allowed adjustments contrary to its settled principles, threatening the resolution's integrity.

The court emphasized adherence to the Insolvency and Bankruptcy Code's (IBC) principles, stating that the failure to implement resolution plans promptly necessitates liquidation. The court's decision sets a precedent by affirming that performance guarantees must not offset obligatory payments under approved plans, ensuring robust adherence to IBC protocols.

(With inputs from agencies.)