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NCLAT issues notice over Punjab National Bank's plea against Jet Airways resolution plan

Punjab National Bank (PNB), a public sector lender, has appealed the approval of bids for the insolvent carrier Jet Airways to the Insolvency Appellate Tribunal (NCLAT). The National Company Law Appellate Tribunal (NCLAT) bench has issued a notice in response to the PNB's petition and interim plea seeking a stay on the resolution plan's implementation.

A three-judge panel has ordered Jet Airways' Resolution Professional, as well as other parties, including the Committee of Creditors, to file a response within two weeks and a rejoinder, if by PNB, by one week. "Let the matter be set for admission (after notice) on 21 September 2021," the NCLAT stated.

The approval of the Resolution Plan by Kalrock-Jalan Consortium by the Mumbai bench of the National Company Law Tribunal on 22 June 2021, has been contested by PNB (NCLT). The bank is enraged by the Resolution Professional's decrease of its claim amount by about Rs.202 crore, which it claims is in blatant breach of the Insolvency & Bankruptcy Code's protocols (IBC).

Previously, the Jet Airways Cabin Crew Association and the Bhartiya Kamgar Sena had filed a complaint with the NCLAT challenging the approval of bids for the defunct airline. The organisation and the trade union claimed in their appeal that all Jet Airways employees' dues were not included in the CIRP.

Jet Airways, which had been flying for over two decades, was forced to suspend operations on April 17, 2019, due to financial distress, and a consortium of lenders, led by the State Bank of India (SBI), filed an insolvency petition in June 2019 to recover outstanding dues totalling over Rs. 8,000 crore.

The airline's Committee of Creditors (CoC) adopted the resolution plan proposed by a consortium led by UK-based Kalrock Capital and UAE-based entrepreneur Murari Lal Jalan in October 2020. Jet Airways has been insolvent for two years, and its affairs are being managed by a resolution professional under the Insolvency and Bankruptcy Code (IBC).

Since it ceased operations in April 2019, the airline's stock has lost more than half of its value. On 5 May 1993, the company began as an air taxi service with a fleet of four leased Boeing 737-300 aircraft. In 1995, it became a scheduled carrier, and in March 2004, it flew its first international flight from Chennai to Colombo.

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