LexSTATE BANK OF INDIA AND ORS versus E CONSORTIUM OF MR MURARI LAL JALAN AND MR FLORIAN FRITSCH AND ANR
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* Author [2024] 1 S.C.R. 1045 : 2024 INSC 51 State Bank of India and Ors v. The Consortium of Mr Murari Lal Jalan and Mr Florian Fritsch and Anr (Civil Appeal Nos 3736-3737 of 2023) 18 January 2024 [Dr Dhananjaya Y Chandrachud*, CJI, J B Pardiwala and Manoj Misra, JJ.] Issue for Consideration Consortium of lenders represented by the State Bank of India filed affidavit stating that the lenders were agreeable that if Successful Resolution Applicant (SRA) satisfied particular criteria, including infusing Rs. 350 Crores by 31.08.2023, adhering to the resolution plan terms, and meeting employee payment obligations in accordance with the NCLAT order, they would abstain from challenging extension of time issues. However, the inability to meet these conditions would necessitate directing the Corporate Debtor-Jet Airways Limited into liquidation. SRA sought extension of time for the deposit of Rs 350 crores in two tranches of Rs 100 crores and the balance of Rs 150 crores by the adjustment of the Performance Bank Guarantee (PBG) issued in favour of the lenders. NCLAT whether justified in allowing the plea of the SRA for adjustment and consequential release of the PBG at the interlocutory stage. Headnotes Insolvency and Bankruptcy Code, 2016 – NCLAT permitted the Successful Resolution Applicant (SRA) to adjust the last tranche of Rs 150 crores by adjusting the Performance Bank Guarantee (PBG) of Rs 150 crores – Correctness: Held: The occasion for an extension of time to the SRA for the deposit of Rs 350 crores arose as a consequence of the affidavit which was filed by SBI before the NCLAT – SBI’s affidavit envisaged that the lenders would not contest the issues pertaining to the grant or exclusion of time; or extension in terms of the orders passed by the NCLT on 13.01.2023 and 26.05.2023; and compliance of the conditions precedent by the SRA – However, SBI’s offer was subject to the fulfillment of three conditions that the SRA must infuse 1046 [2024] 1 S.C.R. Digital Supreme Court Reports Rs. 350 Crores by 31.08.2023, adhering to the resolution plan terms, and meeting employee payment obligations in accordance with the NCLAT order dtd. 21.10.2022 upheld by this Court – Conditional on compliance with the three conditions, SBI stated that it would be willing to withdraw the company appeals pending before the NCLAT as well as the Civil Appeals pending before this Court – The offer made by SBI on behalf of the lenders had to be complied with as it stood in the event that the SRA sought the benefit of the offer – According to the SRA, the PBG was liable to be released on adjustment in terms of the Resolution Plan – This is a matter which would have to await an adjudication by NCLAT in the pending appeal – Impugned order allowing the plea of the SRA for adjustment and consequential release of the PBG at the interlocutory stage prima facie would not be in accordance with the tenor of the affidavit filed by SBI – Infusion meant that the third tranche has to be paid in the same manner – Adjustment of the PBG was not permissible – NCLAT not justified in holding that the last tranche of Rs 150 crores which was to be paid would be adjusted against the PBG – The SRA having deposited the first two tranches each of Rs 100 crores must comply with the remaining obligation of depositing Rs 150 crores (to make up a total payment of Rs 350 crores) – Having by its conduct accepted the terms set up by SBI it must be obligated to comply with the entirety of its obligations – It must do so in strict compliance with the time schedule as set out – Directions issued. [Paras 20-22 and 25] List of Acts Insolvency and Bankruptcy Code, 2016. List of Keywords Corporate Debtor (Jet Airways Limited); Conditions Precedent; Director General of Civil Aviation; Effective Date; Successful Resolution Applicant; Consortium of lenders; Performance Bank Guarantee; Adjustment of Performance Bank Guarantee; Infusing funds; Employees payment obligations Case Arising From CIVIL APPELLATE JURISDICTION : Civil Appeal Nos.3736-3737 of 2023. [2024] 1 S.C.R. 1047 State Bank of India and Ors v. The Consortium of Mr Murari Lal Jalan and Mr Florian Fritsch and Anr From the Judgment and Order dated 03.03.2023 of the National Company Law Appellate Tribunal, Principal Bench at New Delhi in Company Appeal (AT) (Insolvency) Nos.129-130 of 2023. With Civil Appeal Nos.4131-4134 And 6427-6428 of 2023. Appearances for Part
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