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The Indian aviation landscape witnessed a significant development as the Supreme Court, invoking its extraordinary powers under Article 142 of the Constitution, ordered the liquidation of Jet Airways' grounded assets. This decision marked a culmination of a protracted legal battle and the failure of a resolution plan that had remained stagnant for five years. The court, emphasizing the 'peculiar and alarming' circumstances surrounding the non-implementation of the plan, left itself with 'no choice but to send Jet Airways into liquidation'.
Article 142 empowers the Supreme Court to issue orders necessary for 'complete justice' in any pending matter. This power was invoked in the case of Jet Airways due to the unresolved state of the resolution plan. The plan, approved five years ago, had failed to materialize, leaving the airline's creditors, workers, and stakeholders in a state of uncertainty. Recognizing the impracticality of reviving the resolution plan, the Supreme Court deemed liquidation the most viable option to safeguard the interests of all parties involved.
The court's decision to liquidate Jet Airways' assets came after considering a plea filed by the State Bank of India (SBI) and other creditors. They argued that the resolution plan had become untenable, and liquidation offered the most effective path forward. The Supreme Court, concurring with the creditors' argument, held that liquidation would be the most beneficial outcome for all stakeholders. This decision, however, comes as a blow to those who had hoped for a revival of the once-popular airline, signaling a definitive end to its operations.
The Supreme Court also reprimanded the National Company Law Appellate Tribunal (NCLAT) for its decision to uphold the resolution plan despite its evident failure. The court emphasized that liquidation should be considered a last resort for lenders, particularly in scenarios where resolution plans prove unsustainable. It further directed the forfeiture of Rs 200 crore infused by JKC and mandated lenders to invoke a Performance Bank Guarantee of Rs 150 crore. This move aims to ensure that creditors are compensated to the maximum extent possible.
The liquidation of Jet Airways marks a significant moment in the Indian aviation sector. It serves as a reminder of the complexities and challenges associated with reviving struggling businesses. The Supreme Court's decision highlights the need for timely and efficient resolution plans to prevent situations where liquidation becomes the only viable option. It remains to be seen how the liquidation process will unfold and what impact it will have on the Indian aviation landscape.
Source: "Left With No Choice": Supreme Court Orders Liquidation Of Jet Airways' Assets