The National Company Law Appellate Tribunal (NCLAT) on Monday dismissed the petition filed by an employee association of debt-ridden Jet Airways, challenging the sale of two floors of office space in Mumbai's business district of Bandra Kurla during the insolvency process of the grounded carrier.
Jet Aircraft Maintenance Engineers Welfare Association (JAMEWA had challenged the orders passed by the Mumbai bench of the National Company Law Tribunal (NCLT) on June 11, 2021, allowing the sale of the office space for Rs 490 crore.
The association had contended that the sale of BKC property, was not permissible under the Insolvency & Bankruptcy Code (IBC) as a moratorium was declared over the assets of the company after an order dated June 20, 2019.
Neither the Resolution Professional nor the Committee of Creditors of Jet Airways had any jurisdiction to transfer the assets of the carrier during the Corporate Insolvency Resolution Proceedings and NCLT also had no authority to grant any approval of such proposal for transfer of BKC property, it had contended.
Rejecting the plea, the NCLAT said the resolution professional was competent to effect sale with due approval of the Committee of Creditors of the assets.
"The consideration of the sale of the said property has been utilised to secure the title of six aircraft as well as to make payment to Respondent No 3 (HDFC) who had charge over the subject properties," said NCLAT.
Due to the sale of assets, the title of six aircraft was acquired by Jet Airways, it said.
The NCLAT in its 42-page-long order observed that JAMEWA, a trade union of aircraft maintenance engineers of Jet Airways, had also filed claims and claims worth Rs 152.58 crore was admitted also.
"The Appellant, a stakeholder in the CIRP must have received due consideration in the final Resolution Plan approved on 22nd June 2021, which Resolution Plan is also under challenge in separate Appeal and one of the Appeal has been filed by Association of Aggrieved Workmen of Jet Airways (India) Ltd... we see no reason to set aside the impugned order dated June 11, 2021, at this stage," said NCLAT.
However, the appellate tribunal also made clear that its reference to approval of the Resolution Plan may not be treated as any expression of its opinion with regard to the Resolution Plan, which is not the subject matter of this Appeal.
"For the reasons indicated above, no relief can be granted in this Appeal. The Appeal is dismissed," it said.
Insolvency proceedings against Jet Airways were initiated by NCLT passing an order on June 20, 2019.
In June 2021, NCLT approved the resolution plan by the consortium of the UK's Kalrock Capital and the UAE-based entrepreneur Murari Lal Jalan.
Photograph: Danish Siddiqui/Reuters