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Informist, Tuesday, Feb. 3, 2026

 

NEW DELHI – The Mumbai bench of the National Company Law Tribunal Tuesday asked Jet Airways (India) Ltd.'s liquidator to distribute the proceeds of liquidation that were collected through the sale of the company's assets, including the airline company's property at the Bandra-Kurla Complex, Mumbai. The liquidator should therefore proceed with distribution strictly in accordance with the waterfall mechanism under Section 53 of the Insolvency and Bankruptcy Code, 2016, while ensuring adequate safeguards to protect the interests of workmen and employees who were claiming priority in their applications pending orders, said the tribunal.

 

Indefinite deferment of distribution, particularly in a liquidation that has already witnessed significant delay, runs contrary to the object of timely value realisation and distribution embodied in the 2016 Code, said the tribunal. The interests of workmen, employees, and financial creditors must be balanced in a manner that neither prejudices pending claims nor paralyses the liquidation process, said the tribunal. The liquidation process cannot be brought to a standstill merely because issues of priority and exclusion are pending before it, said the tribunal.

 

It is an admitted position that Jet Airways has been under insolvency and related litigation since 2019, and pursuant to Supreme Court's verdict in 2024, liquidation has been commenced, said the tribunal. Substantial assets of Jet Airways, including the Bandra-Kurla Complex property, have already been sold and the sale proceeds have been credited to the liquidation account, the tribunal added. The prolonged non-distribution of these proceeds has a direct bearing on the rights of stakeholders, particularly the assenting financial creditors such as State Bank of India, whose claims have remained unresolved for an extended period, it said.

 

The tribunal was hearing an application by State Bank of India and other creditors of Jet Airways seeking distribution of proceeds of sale of the company's assets in accordance with the waterfall mechanism under the insolvency law, even when an application by workmen of the airline was pending in the tribunal. The workmen, in their application, have sought payment of gratuity and salary dues in priority by keeping such dues outside the liquidation estate. The tribunal was to decide whether it could order distribution of proceeds obtained on the airline's assets sale even when it had not ruled upon the workmen's application.

 

Jet Airways has been grounded since 2019 after the Mumbai tribunal admitted State Bank of India's insolvency petition against the company. In the insolvency process, the consortium of United Arab Emirates-based entrepreneur Murari Lal Jalan and European investor Florian Fritsch emerged as the winning bidder to take over the airline in 2021. Thereafter, there were multiple rounds of litigation across various fora over the consortium's failure to release money on time and to get necessary permissions from the civil aviation authorities to revive the airline. While the consortium had insisted it was in a position to implement the revival plan, the lenders had termed its claim a "fantasy". In November 2024, the Supreme Court had ordered the liquidation of Jet Airways after the consortium had failed to implement the resolution plan.

 

Since Jet Airways was ordered into liquidation, its shares have been delisted. On Tuesday, shares of State Bank of India ended 3.5% higher at INR 1,064.20 on the National Stock Exchange.  End

 

Reported by Surya Tripathi

Edited by Tanima Banerjee

 

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