More trouble brews for Jet Airways

Jet Airways HQ owner wants resolution professional to vacate premises. The licence for occupying the place has been terminated, on account of the airline having not paid the rent after March.

The owner of Jet Airways headquarters has moved the National Company Law Tribunal (NCLT) seeking eviction of Jet's Resolution Professional (RP) from its premises.

The licence for occupying the place has been terminated, on account of the airline having not paid the rent after March, says Luckystar Property Holdings, legal owner of the premises, Siroya.

Jet paid the licence fee on the property till March; it defaulted on payment in April and May.

A 30-day grace period was given by Luckystar for payment but Jet did not pay, resulting in termination of the agreement on June 8.

The legal counsel for Luckystar argues the RP (which is accounting entity Grant Thornton) has taken possession of the property as if it was an asset of the beleaguered airline.

The RP had cited the NCLT order which granted a moratorium on Jet’s assets after the company was admitted into the insolvency process on June 20.

The counsel says the RP wrongly possessed the property and wants a direction to vacate it.

Also, compensation from the RP for doing so with a property which did not belong to the corporate debtor.

From the RP's own money, as it was at fault, says the counsel.

Grant Thornton in its reply to the petition has said Jet made a security deposit of Rs 10 crore for the premises which has not been refunded. Luckystar’s lawyer argues that prior to the moratorium being granted for Jet's assets by the tribunal, the security deposit was appropriated.

The matter has been adjourned to August 8. Jet shut down on April 17 and was referred by its lenders last month to the insolvency court, after months of search could not find any buyers.

Meanwhile, the RP has given a report on the fortnightly progress regarding the the corporate insolvency resolution process for the airline.

The tribunal had told the RP to do so each fortnight while admitting the airline into CIRP, saying the matter was of national importance.

Jet's employees have also petitioned the NCLT, over non-payment of salaries.

The latter has directed the RP to discuss this with Jet's committee of creditors (CoC), which could later realise the money so paid from whichever entity bids for the company.

The RP also said interim funding of around Rs 70 crore had been sought from the CoC for maintenance of Jet's aircraft.

The RP has received claims of a little more than Rs 24,000 crore, from the lenders, vendors, travel agents and employees.

It has admitted 33 claims from banks worth Rs 8,462 crore and is verifying others totalling Rs 15,044 crore from operational creditors and staff.

The CoC has revised the bid criteria. One would need a net worth or assets under management of at least Rs 1,000 crore to participate.

Prior aviation experience has been done away with.

In the earlier bid process, initiated in May, a company with three years of aviation experience could participate in the bid, even if it did not meet the financial criteria.

The rules for participation through a consortium are also being now made flexible, it is learnt.

Photograph: Vivek Prakash/Reuters