The Supreme Court ordered the consortium to pay ₹150 crore by January 31, citing an earlier ruling.
The consortium stated in its application that if the court allows the release of the existing bank guarantee, the funds will be sent to the lenders’ designated share application account.
The successful resolution applicant for the grounded airline Jet Airways, Jalan Kalrock Consortium (JKC), submitted a plea, which the Supreme Court (SC) rejected on February 2. The motion asked the court to direct lenders to release the existing bank guarantee of Rs 150 crore, allowing JKC to replace it with a new one.
JKC also asked for a seven-day delay to deposit the Rs 150 crore. It proposed that the seven-day term begins on the day the lenders release the existing bank guarantee.
The consortium stated in its application that if the court allows the release of the existing bank guarantee, the funds will be sent to the lenders’ designated share application account. A performance bank guarantee is a monetary compensation offered by the bank in the event of a delay in providing the performance or operation.
JKC filed this application in response to a Supreme Court ruling dated January 18, which directed it to deposit Rs 150 crore by January 31. The funds are to be held in an escrow account between the State Bank of India (SBI) and JKC.
The top court decided that legal implications would hit JKC if it didn’t give the bank a guarantee. By March 2024’s end, the NCLAT must weigh in on SBI’s challenge against Jet Airways’ ownership transfer to JKC.
For two years, JKC and the lenders of Jet Airways have disagreed. The lenders insist that the group isn’t putting funds into the airline for a bailout.
On January 18, the Supreme Court reversed an NCLAT ruling from August 2023. This ruling allowed JKC to use Rs 150 crore from an existing performance bank guarantee to make a Rs 350 crore payment.
The airline’s lenders had strongly opposed the NCLAT’s decision to allow JKC to alter the Rs 150 crore bank guarantee on the grounds that it was a backup and could not be used at this time.
When the consortium presented its proposed payment schedule on August 18, 2023, the appellate panel required that they file an application within 24 hours. In response, the lenders informed the appellate tribunal that they may choose not to pursue the appeal challenging the transfer of the airline’s ownership to the JKC, provided the consortium meets the condition set by making a payment of Rs 350 crore.
