5 July 2019: The Mumbai bench of the National Company Law Tribunal (NCLT) on Friday said that it will hear the insolvency case against Jet Airways (India) Ltd. and next progress report by the insolvency resolution professional (IRP), who have been approved by the court to oversee the insolvency proceedings of the airline, on 23 July.
The tribunal said it will issue notice to one of Jet Airways’ lessors and regulator Directorate General of Civil Aviation (DGCA) to appear before it on 19 July. The lessors had sought deregistration of a Boeing 777 aircraft belonging to the airline due to non-payment of dues.
The court-appointed IRP for Jet Airways, Ashish Chhawchharia of Grant Thornton India, through his counsel, asked the tribunal to stall deregistration of the Boeing 777 aircraft since the airline is under moratorium.
Jet Airways has not flown since 18 April due to funding woes. A consortium of 26 bankers led by State Bank had approached the NCLT to recover dues of over ₹8,500 crore from Jet Airways. The lenders have been trying to sell the airline as a going concern since the past five months, but failed due to many a reason.
Apart from banks, the airline also owes over ₹10,000 crore to its hundreds of vendors, primarily aircraft lessors and over ₹3,000 crore to its employees who have not been paid since March.
The airline has been having negative net worth for long and has run a loss of over ₹13,000 crore in the past few year. Thus it has over ₹36,500 crore of dues and being a services company negligible assets to recover.
The Mumbai bench of the NCLT admitted Jet Airways on 20 June for bankruptcy proceedings under the Insolvency and Bankruptcy Code (IBC). The court also approved an insolvency resolution professional (IRP) to oversee the insolvency proceedings.
The tribunal also ordered the IRP to complete the IBC process in three months, even though the law allows six months, saying “the matter is of national importance”.
On 4 July, mortgage lender HDFC moved NCLT seeking to keep Jet Airways headquarters in the city out of the bankruptcy process. HDFC counsel told NCLT on Thursday that three floors of the building were mortgaged with the lender.
(With inputs from PTI)