The National Company Law Tribunal (NCLT) on Tuesday directed the interim resolution professional of Jet Airways to discuss employee concerns over payment of salaries with the committee of creditors, citing necessity of ensuring payment for ‘survival of employees’.
A Jet Airways employee association was seeking the court’s permission for release of one month’s salary. The tribunal, comprising judges VP Singh and Ravikumar Duraisamy, suggested the IRP for Jet Airways, Ashish Chhawchharia of Grant Thornton India, discuss the matter with the committee of creditors (CoC), even suggesting that making salary payments a part of the CIRP cost be considered.
Last week, the Jet Airways CoC is understood to have approved around Rs 70 crore in interim funding to be used towards corporate insolvency resolution process.
The NCLT will further hear the matter on August 8, which is also the date for submissions of the next progress report by the IRP.
Employees, including pilots, ground staff, engineers and other administrative staff haven’t been paid for several months. Meanwhile, Jet Airways temporarily halted operations on April 17 after lenders rejected its request to provide emergency funding. The civil aviation ministry has allotted a significant portion of the airline’s slots in major airports to other scheduled carriers. Matters complicated further for the airline with the series of resignations from the top management since May 13.
As part of Tuesday’s proceedings, the tribunal also heard an application by Lucky Star Property Holdings, owner of Jet Airways’ former headquarters Siroya Centre. Lucky star has approached the NCLT with a plea that the IRP be directed to shift out of the premises, the lease for which expired on June 7.
According to the counsel to Lucky Star, Jet Airways defaulted on payment obligations in April, after which it was granted 30 days, which expired last month. As per an agreement, the security deposit of Rs 10 crore was then utilised towards adjustment of existing licence fees.
The Mumbai bench of the NCLT admitted Jet Airways on June 20 for bankruptcy proceedings under the Insolvency and Bankruptcy Code (IBC).