Jet Airways staff union sends legal notice on pending dues

As per an order dated 21 Oct, the monitoring committee of Jet Airways had to compute the pending dues to be made to workmen and employees of Jet Airways within one month from Oct 21 and communicate the same to Jalan-Kalrock consortium, the winning bidder of Jet Airways. The total dues are expected to be the tune of ₹250 crore.

“The Jet staff association has sought for compliance of NCLAT order and sought no sale of assets till payment of gratuity. Failure entails legal action,” Dr Narayan Hariharan of the association said.

“We would like to ensure all steps to get justice for our members and all sections of the employees,” the association’s President Kiran Pawaskar said.

The order by NCLAT directed the Jalan-Kalrock consortium to make payment of unpaid provident fund, gratuity dues to the workmen till date of insolvency commencement, until the date of insolvency commencement i.e. 20 June, 2019.

“It is made clear that full payment of provident fund would be of that unpaid part of provident fund, which has not been deposited by the Corporate Debtor (Jet Airways) in the EPFO,” the order had stated.

The NCLAT had further directed the Chairman of the Monitoring Committee, erstwhile Resolution Professional Ashish Chhawchharia to compute the payments to be made to workmen and employees within one month from the order today and communicate the same to the Successful Resolution Applicant I.e. Jalan-Kalrock Consortium to take steps for payment. However, the consortium has so far not clarified whether it will make this payment or not.

As per the approved resolution plan, the Jalan-Kalrock consortium had proposed a total cash infusion of ₹1,375 crore, including ₹475 crore for payment to stakeholders from this. The remaining ₹900 crore was to be infused for capital expenditure and working capital requirements.

So far, the consortium has deposited ₹150 crore as bank guarantees and has indicated that it will not make any further payments before the ownership of the airline is transferred by the lenders to the consortium. However, the lenders are insisting that the consortium makes cash payments to the creditors and fulfill pre-requirements for launching an airline before transfer of ownership, Mint has reported. The resolution plan had further stated that the winning bidder has to make an upfront payment of ₹185 crore to the financial creditors within 180 days from the effective date which in this case is 20 May, as per senior officials at Jet Airways.

The matter is expected to gain clarity at the upcoming hearing at the National Company Law Tribunal (NCLT) on 29 November.

In April 2019, Jet Airways, a full-service airline, shut down operations due to severe financial difficulties. The NCLT approved Jalan-Kalrock’s resolution plan on 22 June 2021 following an insolvency process that began in June 2019.

The winning bidder of Jet Airways, Jalan Fritsch Consortium, consists of UAE-based non-resident Indian Murari Lal Jalan who will hold shares in Jet Airways in his personal capacity. The consortium also includes Florian Fritsch who will hold shares through his investment holding company Kalrock Capital Partners Ltd, Cayman.