India's Supreme Court has given the consortium attempting to buy Jet Airways (JAI, Mumbai International) until January 31, 2024, to pay INR1.5 billion rupees (USD18 million) or risk losing its claim on the grounded carrier.

The National Company Law Appellate Tribunal (NCLAT), a specialist bankruptcy court, issued an order in late August 2024 allowing the Jalan Kalrock Consortium (JKC) to use a bank guarantee to cover INR1.5 billion of the INR3.5 billion (USD42 million) due to creditors as part of an approved package to buy Jet Airways.

However, creditors appealed the NCLAT ruling to the Supreme Court, India's top court, and a January 17 ruling declared the NCLAT order invalid, ordering the consortium to pay the outstanding amount into an escrow account by the end of January. Jet Airways had made cash payments to cover the other INR2 billion (USD24 million) due.

In the wake of Jet Airways' collapse in April 2019, administrators have admitted creditor claims of INR78 billion (USD938 million). However, a deal negotiated between JKC and the administrators, which secured the support of the majority of creditors and was later ratified by the NCLT, resulted in JKC paying a fraction of the debt in return for creditors dropping their claims and ownership of the airline transferring to the consortium. However, the relationship between JKC and the creditors has soured, and the ownership transfer has become bogged down in legal action, claims, and counterclaims.

Last week, counsel for the creditors told the NCLAT that JKC had failed to meet many of the conditions, including payment timelines, set down in the so-called 2021 resolution agreement that mapped out the Jet Airways' sale and ownership change. Counsel also accused the consortium of engaging in litigation as a delaying tactic. However, the consortium's counsel has accused the creditors, led by the State Bank of India, of similar behaviour. Mukul Rohatgi, appearing for JKC last week, told the court that if it set aside the resolution plan, there would be no alternative but to liquidate what remained of Jet Airways.

In addition to ordering the cash payment by the end of the month, the Supreme Court also ordered the NCLAT to hear and dispose of all appeals lodged by both sides by the end of March.

Meanwhile, in the wake of last week's ruling, two Jet Airways directors have resigned, saying they were individually at risk if they stayed on. Gautam Acharya and Rajesh Prasad resigned on January 19, effective that day. In his resignation letter, Acharya, who took up the non-executive director role last July, said, "Being a director of a listed entity with multiple counts of non-compliance puts my own individual position at risk." Acharya's contracted tenure period was due to expire on January 20, and he said he would not apply for reappointment.

Prasad was also appointed to his directorship in July. "Almost six months into (my) appointment as a director, the non-compliances have not been corrected," his resignation letter reads. "I do not want to risk my position."

ch-aviation has contacted Jet Airways for comment.