SC upholds NCLAT order on former Jet employees’ dues

The National Company Law Tribunal had earlier this month approved the transfer of ownership of Jet Airways to the Jalan-Fritsch consortium and gave it more time to pay the dues to creditors.

Published: 31st January 2023 07:54 AM  |   Last Updated: 31st January 2023 07:54 AM   |  A+A-

Court Hammer, judgement, order, Gavel

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By Express News Service

NEW DELHI: In a setback to the Jalan-Fritsch consortium, the new owners of the cash-strapped Jet Airways, the Supreme Court on Monday upheld an NCLAT order directing the payment of the provident fund and gratuity dues of the airline's former employees.

A bench of Chief Justice DY Chandrachud and justices PS Narasimha and JB Pardiwala said, “Anyone stepping in would know there are overriding labour dues. Unpaid labour dues always take precedence. Somewhere, there has to be finality. Sorry, we will not interfere.” 

This fresh hurdle for the JKC comes after the Mumbai bench of the National Company Law Tribunal (NCLT) earlier this month approved the transfer of ownership of Jet Airways to the consortium and gave it more time to pay the dues to the creditors.

The Supreme Court on Monday refused to entertain a plea moved by the consortium and upheld the National Company Law Appellate Tribunal’s (NCLAT) order. This may prove to be a big setback for the consortium, which is eyeing to restart the grounded airline.

Senior advocate Saurabh Kirpal, who appeared in the court on behalf of the consortium, said they will now have to put in an additional amount of more than Rs 200 crore and it would be difficult to revive the airline. He said once approved, the resolution plan cannot be modified or taken back.

Senior advocate Siddharth Bhatnagar and advocate Swarnendu Chatterjee appeared in the court on behalf of the Association of Aggrieved Workmen of Jet Airways (AAWJA), comprising 270 former employees of the airline who had resigned on or after the carrier’s insolvency commencement date. 

On October 21 last year, the NCLAT had directed the consortium to pay the provident fund and gratuity dues of the employees of the airline.

Jalan-Fritsch won the bid through an insolvency resolution process for Jet Airways, which had stopped operations in early 2019 due to a financial crisis.

The airline is now preparing to restart its services.

According to the NCLAT order, full gratuity and provident fund have to be paid to all workmen and employees who have resigned or retired.

The calculation should be done till June 20, 2019, the date of admission to insolvency.

Over and above the gratuity and provident fund, the entire due amount of Rs 113 crore, as mentioned in Form H (draft plan), has to be paid to the workmen.

(With PTI inputs)


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