Jet Engineers Move SC Against Resolution Plan

Dec. 19—MUMBAI — An association of Jet Airways maintenance engineers has filed a petition in the Supreme Court against the airline's resolution plan, claiming the plan ignores workers' rights, and the liquidation value of the debt-laden company is constantly diminishing.

"The timeline for making the payment under the provisions of the code have not been complied with", said the petition, filed by the Jet Aircraft Maintenance Engineers Welfare Association (JAMEWA).

JAMEWA is a registered union of aircraft maintenance engineers of Jet Airways. Mint has seen a copy of the petition.

The National Company Law Tribunal (NCLT) approved the Jalan Kalrock consortium's resolution plan for Jet Airways in June 2021 to save the airline. The consortium had clarified to NCLT that it does not plan to hire existing experienced staff who waited for more than three and half years for the company to revive.

"Neither are they giving us retrenchment allowance, nor gratuity for up to 25 years of service. This is a blatant disregard of the laws of the land. The plan only benefits prospective buyers. Staff, along with their dues, are being transferred to Airjet Ground Services Ltd (AGSL), a subsidiary which exists only on paper, is non-existent and has no assets," a person aware of the lawsuit said. The consortium has reserved the right to liquidate it at its will; in such a case staff dues will be automatically extinguished. "If the resolution plan survives, a bad precedent will be set in the country. The plan deserves to be set aside," the person quoted above said.

"As it is, the SRA (successful resolution applicant Jalan Kalrock Consortium) has defaulted on their payment deadline of November 2022 to make payments to staff as per the approved resolution plan; hence, the SC appeal," the person said.

"The National Company Law Appellate Tribunal (NCLAT) on 21 October ordered the monitoring committee of Jet Airways resolution to calculate dues to workmen and employees within a month and communicate it to the Jalan-Kalrock consortium. The total dues are expected to be about INR250 crore, but the order has not been complied with," the petition said.

"The order of the NCLAT has amply clarified that the consortium is liable to pay the unpaid provident fund and gratuity dues to workmen and employees. Non-payment of such dues shall definitely open the consortium to be liable for contempt proceedings under the IBC and the Companies Act. However, what must be noted is that the consortium itself has recourse in law against the said order of the NCLAT. They have time till 1 January 2023, to make the payments to the workmen and employees. In the meantime, the consortium may approach the Supreme Court to get at least a temporary stay on their obligations to make payments. This, in effect, would delay the recovery of dues for the workmen and employees who have already been in a lurch for a long time", said Kundan Shahi, co-founder and CEO, Legalpay.

Separately, on Thursday, the Akhil Bhartiya Kamgar Sena moved the NCLAT seeking clarity on NCLAT's 21 October order on payment of PF and gratuity dues for those who have either retired or resigned after the insolvency commencement date.

ABOUT THE AUTHOR

Priyanka Gawande

Priyanka Gawande is a senior legal correspondent at Mint. She has worked as legal reporter for four years with both television and digital mediums. Based in Mumbai, she reports on disputes across sectors including banking, corporates and finance. This also includes insolvency and bankruptcy cases and intellectual property rights (IPR) litigation. Her focus also comprises tracking capital markets and disputes relating to securities law. Previously, Priyanka worked with Informist Media for 2.5 years covering major insolvency and bankruptcy cases and corporate developments. She started her career in journalism with Business Television India (BTVi) where she reported on primary markets, banking, finance and insurance companies.

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