Jet Airways Insolvency: NCLT order gives hope for Employee salaries

The Mumbai bench of the National Company Law Tribunal (NCLT) on Tuesday directed Insolvency Resolution Professional (IRP) of Jet Airways to discuss employees’ salary payment issues with Committee of Creditors (CoC)..The Bench said that the salary claims of around 20,000 employees of Jet Airways are important for their survival. A division bench of judges VP Singh and Ravikumar Duraiswamy of NCLT is hearing insolvency proceedings against Jet Airways initiated by a consortium of banks led by State Bank of India (SBI)..On Tuesday, employee associations of the grounded airline had, through their lawyers, moved NCLT seeking permission to release a month’s salary on an urgent basis. Employees argued that urgent disbursal of a month’s salary is important for their survival. Jet Airways has not released salaries of its pilots, engineers and top managers since January and salaries of other employees have been held back since March. The airline was grounded since April 18 due to lack of funds. In light of this, NCLT directed Insolvency Resolution Professional (IRP) to discuss concerns of employees with the Committee of Creditors (CoC) and ensure employees avail their dues. The court noted that salaries of employees, after consultations, can be considered a part of the Corporate Insolvency Resolution Process (CIRP) cost..Around a thousand employees of JetLite, a low-cost subsidiary of Jet Airways also moved the NCLT to seek the release of a month’s salary. The NCLT, on Tuesday, directed them to file claims before IRP. While admitting the plea by SBI, the NCLT in its June 20 order, said that the corporate debtor Jet Airways has more than 20,000 employees and its revival at the earliest by a viable resolution plan is essential. The IRP had invited employees of the Jet Airways to submit their claims of dues by July 24..The NCLT on June 20, had also appointed Ashish Chhawchharia as Insolvency Resolution Professional (IRP) to oversee bankruptcy proceedings of the airline. The court directed IRP to submit his fortnightly progress report to expedite Corporate Insolvency Resolution Process (CIRP) of Jet Airways without delay of even a single day..Moreover, Luckystar Private Limited, an owner of Siroya Centre, former headquarter of Jet Airways in Mumbai, on Tuesday approached NCLT seeking direction to vacate IRP and Jet Airways from its premises. Lawyer of Luckystar claimed that IRP is a trespasser for using premises despite the lease being terminated on June 7, after Jet Airways failed to pay rents. The NCLT will continue hearing arguments, along with salary claims of employees on August 8..Jet Airways owes more than Rs. 8,000 crores to lenders including consortium of banks led by the State Bank of India. The grounded airline also has a large debt by way of accumulated losses to the tune of Rs. 13,000 crore and vendor dues of over Rs. 10,000 crore and salary dues of over Rs. 3,000 crores. Last week, the CoC of Jet Airways approved interim funding of around $10 million (Rs. 69 crores) for the airline, which will be used for the resolution process..IRP Chhawchharia has set August 6 as the last date for issuing a provisional list of prospective resolution applicants and objections to it can be submitted by August 11. The final list of applicants will be issued on August 14. Moreover, the last date for submission of resolution plans for applicants is September 5.