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Complete Jet Airways bankruptcy process in 90 days, directs NCLT

The law allows 180 days for the process, but NCLT directed that it be completed in three months.

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Complete Jet Airways bankruptcy process in 90 days, directs NCLT
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The National Company Law Tribunal (NCLT) on Thursday admitted the State Bank of India's (SBI) petition to initiate insolvency proceedings against Jet Airways. The NCLT directed that the proceedings should be completed within three months, instead of the 180 days (about six months) allowed under the law.

The NCLT also asked the Interim Resolution Professional (IRP) to submit a status report on the progress of the process once every two weeks. The NCLT said this was a matter of national importance and presented this as the rationale for its directions to the IRP.

SBI, along with 26 other banks, had moved the NCLT in Mumbai on Tuesday to recover over Rs 8,500 crore of their dues from the airline, that has been grounded from April 17. The decision of these lenders to go in for the insolvency proceedings had come after a failure to find any potential investors who were suitable.

On Wednesday, unions representing Jet Airways's pilots and engineers had appealed to the NCLT to allow them to be party to the proceedings. The airline reportedly owes more than Rs 3,000 crore in salaries to its 23,000 employees. Most employees have not been paid since March, while some have been getting partial salaries since December 2018.

The NCLT also heard a petition from two Dutch logistics vendors of the airline, who sought to make an intervention petition. The vendors had confiscated a passenger jet belonging to the airline in March demanding that they be paid.

The matter of taking Jet Airways to the NCLT had assumed urgency on June 10, when two Indian logistics vendors  - Shaman Wheels and Gaggar Enterprises - had approached the body seeking help in recovering their dues from the airline, which they claimed owed the Rs 8.74 crore, and Rs 53 lakh respectively. The banks and other lenders at the time had not been party to the move to the NCLT since they were still in the process of attempting to identify investors who could take over the airline.

 

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