NCLT initiates insolvency proceedings against Jet Airways

Debt-loaded airlines, Jet Airways is the first domestic airliner to turn bankrupt after the Mumbai bench of NCLT admitted an insolvency petition filed by SBI. The proceedings have been initiated against Jet Airways, which earlier stopped its operations on April 17 and saw lenders voting for bankruptcy earlier this month.

Jet Airways owes more than Rs 8,000 crore to banks, and thousands of crores more in arrears to vendors, lessors and employees. The State Bank of India filed an insolvency case on behalf of 26 lenders on June 20. 

Jet Airways in a regulatory filing said, "Pursuant to an order dated June 20, 2019 of NCLT Mumbai Bench, Corporate Insolvency Resolution Process (CIRP) has been initiated for Jet Airways (India) as per the provisions of Insolvency and Bankruptcy Code, 2016." 

It further said that upon initiation of CIRP, the powers of the Board of Directors of the company have been suspended and shall be exercised by the Interim Resolution Professional.

The airline formally stopped flying on April 17 and banks voted for bankruptcy on June 17. The bench has also informed the resolution professional to file fortnightly progress report and submit the same on July 5 when the hearing will begin.

The NCLT bench, which has VP Singh and Ravikumar Duraisamy set a 90-day deadline to resolution professional Ashish Chhauchharia of Grant Thornton to conclude the resolution process, while the bankruptcy law allows 180 days for the same, saying 'the matter is of national importance.'