The Supreme Court on Monday has upheld the NCLAT order directing the Jalan-Fritsch consortium— the new promoters of Jet Airways — to pay the Rs 200crore PF and gratuity dues of the airline employees till June2019 when it halted operations.

The consortium had won the bid for Jet Airways through the IBC process which only recognises the dues of financial creditors.

The consortium had argued that it was under no obligation to clear any other dues under the IBC regulations. It had argued that the past dues of employees should come out of the cash balance with the airline and must be supplemented by the lenders who must part with a portion of their share.

The Supreme Court on Monday dismissed the appeal filed by the consortium.

A bench headed by Chief Justice of India D.Y. Chandrachud refused to accept the plea of the consortium that it cannot be compelled to pay the arrears and liability incurred by Jet Airways as the dues according to the consortium were not part of the resolution process on the basis of which they acquired Jet.

The bench which included Justice P.S. Narasimha and Justice J.B. Pardiwala reminded senior advocate Saurabh Kirpal appearing for the consortium that it was a fundamental principle of the Insolvency and Banking Code (IBC)that anybody stepping into the shoes of the original owner has to necessarily accept the liabilities of the erstwhile company which includes the dues of the financial and operational creditors. Under IBC, employees are treated as operational creditors.

Kirpal pleaded that the maximum dues which the employees were entitled under the resolution plan was only Rs 52 crore and any effort to saddle the consortium to add gratuity and PF dues totaling Rs 200 crore would render it financially unviable.

However, the CJI dismissed the petition.