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SC upholds NCLAT order on payment of dues to former employees of Jet Airways – The Economic Times

In a setback to the Jalan Fritsch consortium, the successful bidder of debt-laden Jet Airways, the Supreme Court on Monday upheld the National Company Law Appellate Tribunal’s (NCLAT) order that asked it to clear the unpaid provident fund and gratuity dues of ?250 crore to the former employees of the grounded airline.

A bench led by Chief Justice, while refusing to interfere with the NCLAT’s order, said “anyone stepping in would know that there are overriding labour dues. There has to be a finality. We will not interfere.”

Senior counsel Saurabh Kripal, appearing for the consortium, said an extra ?200 crore of investment would make it difficult to revive the airline. He argued that the resolution plan once approved cannot be modified or taken back.

The appeal filed by the Jalan Fritsch consortium said the appellate tribunal had dismissed the consortium’s plea to cap its payment liability at ?475 crore under the approved resolution plan. The PF and gratuity dues were not part of the approved resolution plan, which had classified only ?52 crore (out of total ?475 crore kept for settlements to all stakeholders) toward payment of employees’ dues. Since November, there has been a tussle over unpaid dues.

In October 2020, the airline’s Committee of Creditors approved the resolution plan submitted by the consortium of the UK’s Kalrock Capital and the UAE-based entrepreneur Murari Lal Jalan.

While the Mumbai bench of the National Company Law Tribunal had approved the Jalan-Kalrock Consortium’s (JKC) resolution plan in June 2021, it had earlier this month approved the transfer of ownership of the bankrupt airline to the winning bidder. The ownership currently vests with the monitoring committee comprising Jet’s lenders, JKC executives and the resolution professional.

JKC has said it will spend ?1,375 crore-?900 crore as capital infusion and ?475 crore paid to creditors.Of that, ?380 crore will go to financial creditors. JKC is to have an 89.79% stake while 9.5% will go to lenders.

Naresh Goyal-founded Jet Airways, once India’s biggest private carrier, stopped operations on April 17, 2019, unable to cope with its financial liabilities. It was taken to bankruptcy court by the airline’s lenders in 2019.