SC Refuses To Entertain JKC Plea On Jet Airways Employees' Dues

The Supreme Court on Monday refused to interfere in the National Company Law Appellate Tribunal’s (NCLAT’s) order directing the Jalan-Kalrock consortium, the successful bidder for Jet Airways, to pay provident fund and gratuity dues to the former employees of the debt-laden airline.

The dues, estimated by the airline staff and those associated with the revival process, are over Rs 200 crore.

A Bench comprising Chief Justice of India (CJI) DY Chandrachud, Justice P S Narasimha, and Justice J B Pardiwala observed that anyone stepping in to bail out the airline would know there were overriding labour dues.

“There has to be a finality. We will not interfere,” the Bench said.

Senior Advocate Saurabh Kripal, appearing for the consortium, said it would be difficult to revive the airline if the consortium had to pay an extra Rs 200 crore. Under the Insolvency and Bankruptcy Code regime, a resolution plan cannot be modified or sent back once it has been approved, he said.

The consortium had moved the Supreme Court earlier this month, challenging the NCLAT order of October 21, 2022. The tribunal had directed the consortium to pay gratuity and provident fund to grounded airline’s employees till the date of insolvency commencement in June 2019. The tribunal also directed the erstwhile resolution professional to compute the due payments within a month and convey the matter to the consortium.

Gratuity claims of Rs 276 crore were admitted by the resolution professional after the airline’s closure. However, the dues payable now could be lower because all employees may not be entitled to their claims.

The NCLAT order was passed in response to the appeals against Jet Airways’ revival plan approved by the National Company Law Tribunal (NCLT) last July. According to the plan, the consortium proposed an infusion of Rs 1,375 crore. This includes Rs 900 crore for capex and working capital, and Rs 475 crore to settle the claims of all creditors.

The plan has a clause that states that the amount infused by the consortium for settling the claims of all stakeholders would be limited to Rs 475 crore.

In its appeal, the consortium said the appellate tribunal had dismissed its plea to cap its payment liabilities at Rs 475 crore under the approved resolution plan.

It said the provident fund and gratuity were not part of the approved resolution plan.

Lenders to Jet Airways on January 24 filed an appeal in the NCLAT against implementation of the resolution plan by the Jalan-Kalrock consortium, Business Standard reported.

Sources said the lenders had maintained the condition precedent in the resolution plan of the consortium had not been met. And therefore, the plan is not valid.