Jet Airways resolution: SC directs new owners to deposit ₹150 crore in SBI’s escrow account by Jan 31

The Supreme Court on Thursday instructed Jalan-Kalrock consrotium, the new owners of the cash-strapped Jet Airways, to deposit ₹150 crore in SBI's escrow account by January 31. If the company fails to make the payment in said time then the consortium is not in compliance with the terms of resolution plan for reviving Jet Airways.

The top court also refused to allow the separate plea of the Jet Aircraft Maintenance Engineers Welfare Association seeking payment of provident fund and gratuity dues, observing if additional money is awarded, the resolution plan will become “unworkable”.

As per the lawyers for the workmen, the consortium has to pay over ₹200 crore towards dues on account of PF and gratuity, reported PTI. The directions were laid out by a bench comprising Chief Justice DY Chandrachud and Justices JB Pardiwala and Manoj Misra. The bench said that the insolvency appelate tribunal NCLAT was not correct in permitting adjustment of ₹150 crore from the performance bank guarantee (PBG) towards payment of ₹350 crore by the consortium to the lenders led by the State Bank of India. The amount was to be deposited in SBI's escrow account.

Escrow refers to a legal concept where an asset or money is held by a third party on behalf of two other parties that are in the process of completing a transaction. "In the circumstances, we have come to the conclusion that the NCLAT (National Company Law Appellate Tribunal) was not justified in holding in its order dated August 28, 2023 that the last tranche of ₹150 crores, which was to be paid, would be adjusted against the PBG," the bench said.

The total amount to be paid out by the consortium is ₹350 crore. Out of which ₹200 crore was deposited in two equal instalments of ₹100 crore and the remaining ₹150 crore was adjusted from the performance bank guarantee (PBG) to which lender banks led by the State Bank of India objected.