Jet Airways insolvency: NCLT warns CoC of contempt proceedings if they do not release funds by 20 January

  • The bench directed the CoC to at least pay the amount by 20 January, or the tribunal will initiate contempt proceedings against the defaulting members

  • The tribunal directed the CoC members, who have not honoured the order of the court, to remain present on 19 February - the next date of hearing

  • This direction came after the resolution professional pointed out that it is under tremendous pressure as many CoC members, in spite of the tribunal's earlier order, have not released funds

Mumbai: The NCLT on Wednesday warned Jet Airways CoC of contempt proceedings if they do not release interim funds to the resolution professional by 20 January for completion of insolvency proceedings.

"We again reiterate and instruct the Committee of Creditors (CoC) to release the interim amount as required by the RP of the grounded airline, so that the corporate insolvency resolution process (CIRP) is completed and the assets of Jet are not devalued," Mumbai-bench of NCLT in its order said.

Further, the bench comprising Bhaskara Pantula Mohan and Rajesh Sharma directed the CoC to at least pay the amount by 20 January, or the tribunal will initiate contempt proceedings against the defaulting members.

The tribunal directed the CoC members, who have not honoured the order of the court, to remain present on 19 February - the next date of hearing.

 Jet Airways insolvency: NCLT warns CoC of contempt proceedings if they do not release funds by 20 January

Representational image. Reuters.

The National Company Law Tribunal (NCLT) also directed Indian Overseas Bank, which filed applications at the tribunal for exemption from payment as they are under Prompt Corrective Action (PCA) restriction to approach the government authorities concerned in this regard.

This direction came after the resolution professional pointed out that it is under tremendous pressure as many CoC members, in spite of the tribunal's earlier order, have not released funds.

The lenders had in-principle sanctioned Rs 63 crore to the RP. Lead banker SBI and two other banks had reportedly already disbursed their portion of the interim amount.

However, the bench exempted IDBI Bank from releasing these funds as it is under the Reserve Bank of India's PCA framework. The tribunal has also said that Indian Overseas Bank must seek similar exemption.

Meanwhile, the RP submitted its progress report saying that under the fresh expression of interest (EoIs), which was decided on 17 December, has received interest from two parties.

The CoC has decided 15 January as the last date of submission of EoIs and 17 February as the last date of submission of resolution plans, he said.

South America's Synergy Group has filed its documents under this fresh EoI, he said, adding the other one is a domestic company, but not in the airline business.

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Updated Date: Jan 08, 2020 20:03:47 IST