Jet Airways Faces Liquidation: Supreme Court's Drastic Verdict

The Supreme Court ordered the liquidation of Jet Airways, marking a significant development in its insolvency saga. The court criticized the NCLAT's decision, declared 200 crore rupees forfeited, and allowed SBI-led lenders to encash a 150 crore rupee bank guarantee, emphasizing procedural adherence under IBC regulations.

In a landmark decision, the Supreme Court has ordered the liquidation of Jet Airways, as the airline's prolonged insolvency ordeal reaches a pivotal conclusion. The court's ruling highlights the perceived failures of the National Company Law Appellate Tribunal (NCLAT) and the complexity surrounding the case.

The bench labeled the NCLAT's verdict as both perverse and legally unsustainable, utilizing its extraordinary powers under Article 142 of the Constitution to end Jet Airways' insolvency proceedings. Crucially, the court declared the 200-crore rupee infusion by successful bidder Jalan Kalrock Consortium (JKC) forfeited, while allowing the lenders to cash a bank guarantee worth 150 crore rupees.

This decision addresses significant procedural shortcomings under the Insolvency and Bankruptcy Code (IBC) while calling for stricter adherence to its regulations. The court has also suggested that the government explore enhanced enforcement methods to ensure compliance by key insolvency participants and trust in the insolvency ecosystem remains intact.

(With inputs from agencies.)