Case Note & Summary
The appeal was filed by former employees of Jet Airways (India) Limited against an order of the National Company Law Tribunal (NCLT) dismissing their application regarding the sale of aircraft assets during liquidation proceedings. The insolvency process against Jet Airways was initiated on 20 June 2019, leading to the appointment of an Interim Resolution Professional. The resolution plan was approved on 22 June 2021, and a Monitoring Committee was established. A sale process for certain aircraft assets was initiated, but the transaction was not completed. The NCLT directed the sale to be resumed on 17 October 2023, which was affirmed by the Supreme Court on 7 March 2024. Liquidation was ordered on 7 November 2024, and the sale of aircraft assets was executed on 5 February 2026. The appellants contended that the sale was undervalued and illegal, claiming they had locus to challenge it due to their status as employees owed dues. The respondents argued that the appellants lacked standing and that the sale process was valid and supervised. The court analyzed the appellants' claims, emphasizing that their dues would be addressed under the waterfall mechanism of Section 53 of the Insolvency and Bankruptcy Code. Ultimately, the court dismissed the appeal, finding no merit in the appellants' arguments and confirming the legality of the sale process.
Headnote
A) Insolvency Law - Locus Standi - Right to Challenge Sale - Insolvency and Bankruptcy Code, 2016, Section 53 - Appellants claimed interest in the sale of aircraft assets as former employees. Court held that their concerns were addressed under the waterfall mechanism, and they lacked locus to challenge the sale process (Paras 10, 39). B) Liquidation Proceedings - Sale of Assets - Insolvency and Bankruptcy Code, 2016, Section 35 - The sale of aircraft was conducted under the supervision of the liquidator and approved by the Adjudicating Authority. Court found no illegality in the sale process, which was initiated during the insolvency process (Paras 26, 39). C) Valuation of Assets - Undervaluation Claims - Insolvency and Bankruptcy Code, 2016, Section 53 - Appellants alleged undervaluation of aircraft sold during liquidation. Court determined that the sale price was established through a competitive process and upheld the valuation as valid (Paras 11, 28).
Issue of Consideration
Whether the appellants, as former employees, had the locus to challenge the sale of aircraft assets during liquidation proceedings.
Final Decision
The appeal was dismissed, with the court finding no merit in the appellants' claims and confirming the legality of the sale process conducted by the liquidator.
Law Points
- Insolvency process
- Liquidation proceedings
- Sale of assets
- Locus standi
- Valuation of assets
- Employees' dues
