New Delhi: The Mumbai bench of the National Company Law Tribunal (NCLT) has admitted the State Bank of India's plea to initiate insolvency proceedings against debt-ridden airline Jet Airways on Thursday. It has also suggested a timeline of 90 days, while noting that the matter is of national importance.
The insolvency petition was filed by Jet's lead lender SBI on June 18 under Section 7 of the Insolvency and Bankruptcy Code (IBC). The bank had proposed Ashish Chhawchharia of Grant Thornton as Insolvency Resolution Professional (IRP). While reading out the verdict, the NCLT directed the IRP to file fortnightly progress reports on the case, with the first such report to be submitted before July 5.
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Meanwhile, SBI Chairman Rajnish Kumar said that the decision to take Jet Airways to the NCLT under IBC was taken after due diligence by all lenders. "There are cogent reasons for lenders. Every decision is taken after lot of due diligence," Kumar said after attending the bank's annual general meeting on June 20.
"How can I foresee what will happen in NCLT…This is the first case of aviation sector bankruptcy that will be tested," he added. The airline was forced to shut down operations in April after it defaulted on payments to lessors and banks. Currently, Jet owes Rs 8,000 crore to a consortium of 26 banks led by SBI.