The Supreme Court three-judge bench comprising Chief Justice of India Dr. Dhananjaya Y Chandrachud and Justices B. Pardiwala and Manoj Misra was hearing an appeal and observed that Successful Resolution Applicant (SRA) cannot adjust its last payment with the Performance Bank Guarantee pending in NCLAT concerning adherence to contractual obligations in insolvency proceedings.
A batch of appeals stemmed from three orders of the National Company Law Appellate Tribunal concerning a Resolution Plan under the Insolvency and Bankruptcy Code, 2016, submitted by a consortium for the Corporate Debtor, Jet Airways Limited. The Committee of Creditors approved the Plan on 17 October 2020, and it received approval from the Adjudicating Authority on 22 June 2021.
Key to the Resolution Plan was conditions precedent, including validation of aviation permits, submission of a business plan, slot allotment approval, clearance of international traffic rights, and approval of demerger. The Plan allowed for automatic withdrawal if these conditions were not met within specified timelines. Disagreements arose regarding the fulfilment of these conditions, leading to legal proceedings.
The NCLT, on 13 January 2023, ruled in favour of the Resolution Applicant, stating compliance with conditions precedent. The decision was appealed by SBI, and on 3 March 2023, the NCLAT declined to stay the NCLT's order, prompting further appeals.
An affidavit by SBI in August 2023 offered certain conditions for withdrawal of appeals, including the infusion of Rs. 350 crores by the Resolution Applicant. The NCLAT allowed adjustments against a performance bank guarantee (PBG), sparking more disputes.
The Supreme Court intervened, directing the Resolution Applicant to deposit Rs. 150 crores by 31 January 2024 and maintain the PBG until the NCLAT's final decision. The NCLAT was urged to expedite the appeal's resolution by March 2024. Finally, the appeals were disposed of, with pending applications also resolved.
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