The Supreme Court on Thursday directed Jalan-Kalrock consortium, the new owners of the cash-strapped Jet Airways, to deposit Rs 150 crore in SBI’s escrow account by January 31, saying failure to do so will mean that the consortium is not in compliance with the terms of the resolution plan for reviving the airline.
The top court, meanwhile, 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”.
The consortium, according to the lawyers for the workmen, has to pay over Rs 200 crore towards dues on account of PF and gratuity.
A bench comprising Chief Justice D.Y. Chandrachud and justices JB Pardiwala and Manoj Misra said the insolvency appellate tribunal NCLAT was not correct in permitting adjustment of Rs 150 crore from the performance bank guarantee (PBG) towards payment of Rs 350 crore by the consortium to the lenders led by SBI.
Escrow is a legal concept whereby 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 Rs 150 crores, which was to be paid, would be adjusted against the PBG,” the bench said.
