The Jet Airways Cabin Crew Association (JACCA) has moved the National Company Law Tribunal seeking liquidation of Jet Airways' assets after the consortium defaulted on payments committed in the Resolution Plan.
This is the first time that any stakeholder or creditor that is part of Jet Airways' resolution process has asked for liquidation of airline's assets to get their dues.
The Jet Airways Cabin Crew Association represents 700 cabin crew who had also sent a notice to the consortium on November 22, asking it to make payments in four days of receipt of the notice.
The association in its plea informed NCLT that the consortium has missed both the payment deadlines considering May 20 as the effective date of the resolution plan. First was November 11 to pay Rs 52 crore to workmen and employees. Second was November 16 to pay Rs 185 crore to lenders, and both these deadlines have been missed.
"Either the statement made by the Jalan-Kalrock consortium before the NCLAT on May 20th, that the effective date was declared as May 20, 2022, was false. Or else, the elapse of 175 days and 180 days from the alleged effective date, without the workers and employees receiving the Rs 113 crore (Rs 52 crore and Rs 61 crore respectively), is in contravention of the Approved Resolution Plan & the order approving the Resolution Plan," JACCA said in its plea.
The JACCA also apprised the court that the value of majority of Jet Airways' assets primarily the aircraft, has exponentially depreciated.
"And any further delay in liquidation, will only serve to further greatly depreciate the values of the assets," the plea noted.
The cabin crew association further elaborated on why they are seeking liquidation.
"The airport parking charges are mounting and the RP has accounted the parking charges in the corporate insolvency resolution process (CIRP). Hence, the delay will cause severe loss to the applicant’s members," the plea stated.
The waterfall mechanism under IBC mentions the list of stakeholders in a sequential manner to indicate the priority in getting the payments from liquidation. The cost incurred for CIRP is given the top priority and since airport charges are included in CIRP, JACCA fears a major chunk of the liquidation money will go towards paying airport operators.
In its plea, the JACCA says since these airport charges are mounting, a delayed liquidation will be a loss for other creditors including workmen and employees.