State Bank of India Vs JET Airways India Limited (NCLT Mumbai)
The National Company Law Tribunal, Mumbai Bench considered an application filed by the consortium of the Successful Resolution Applicant (SRA) under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, seeking to treat amounts aggregating ₹350 crore as Corporate Insolvency Resolution Process (CIRP) costs in the liquidation of the corporate debtor. The SRA claimed that it had infused a total of ₹370.76 crore during the CIRP, comprising ₹150 crore as a performance bank guarantee, ₹200 crore as share capital money forming part of the first tranche payment, and ₹20.76 crore to keep the corporate debtor as a going concern.
The background to the dispute lay in the failure to implement the approved resolution plan. The resolution plan had been approved earlier, but the SRA failed to infuse the first tranche payment of ₹350 crore within the stipulated timeline. In its judgment dated 07.11.2024, the Supreme Court of India recorded that despite the effective date being fixed, the SRA had not complied with its payment obligations, resulting in non-payment of CIRP costs, workmen’s and employees’ dues. Considering that nearly five years had elapsed without meaningful progress, the Supreme Court ordered liquidation of the corporate debtor, directed forfeiture of ₹200 crore already infused by the SRA, and permitted lenders to encash the performance bank guarantee of ₹150 crore.
