Jet Airways Insolvency: JKC withdraws plea to put Rs 200 crore in escrow after NCLAT refuses relief

The Jalan Kalrock Consortium (JKC), the successful bidder of the grounded Jet Airways, on Tuesday withdrew its plea before the NCLAT to move Rs 200 crore, which it paid to lenders, to an escrow account.

The withdrawal comes after the National Company Law Appellate Tribunal (NCLAT) refused to give any relief to JKC. An NCLAT bench headed by Chairman Justice Ashok Bhushan said the matter is already before the Supreme Court. 

Following this, the Consortium of Murari Lal Jalan and Florian Fritsch withdrew the appeal. "Until the shares of the corporate debtor (Jet Airways) are not issued to the successful resolution applicant (consortium), pass necessary directions requiring the MC (monitoring committee) lenders to transfer the sum of Rs 200 crore infused by SR (successful resolution applicant), in the share application account to an interest bearing escrow account," JKC had said in its plea before the NCLAT.

The tribunal asked the JKC either to withdraw its plea or face dismissal, on which the consortium preferred to withdraw it. Jet Airways stopped flying in April 2019, and later the consortium emerged as the winning bidder under the insolvency resolution process. However, ownership transfer has been hanging fire amid continuing differences between lenders and consortiums.Earlier this year on March 12, the NCLAT has upheld the resolution plan of grounded carrier Jet Airways and approved the transfer of its ownership to the JKC.

It was directed to pay Rs 350 crore for initiating the process of transfer. However, it paid only Rs 200 crore in cash and asked the lenders to adjust Rs 150 crore from the performance bank guarantee submitted by it. This was opposed by the lenders, however, NCLAT directed that this be adjusted. Again this was challenged before the SC by the MC and others, which set aside the NCLAT order and directed the JKC to deposit the money.