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SUPREME COURT OF INDIA
Dr. Dhananjaya Y. Chandrachud, CJI., J.B. Pardiwala, Manoj Misra, JJ.
State Bank of India & Ors. – Appellants
VERSUS
The Consortium of Mr. Murari Lal Jalan and Mr. Florian Fritsch & Anr. – Respondents
Civil Appeal Nos. 5023-5024 of 2024 With Civil Appeal Nos. 12220-12221 of 2024
Decided On : 07-11-2024
Key Points: - The judgment centers on whether adjusting the PBG against the first tranche payment was permissible under the Resolution Plan and IBC regulations. (!) (!) (!) (!) - It evaluates whether non-implementation of the Resolution Plan by the SRA can lead to liquidation under Section 33(3) IBC, 2016. (!) (!) (!) - It discusses whether timely implementation of the Resolution Plan is an objective or requirement under IBC 2016 and related timelines/extensions. (!) (!) (!) - The Court clarifies that the Lender’s Affidavit terms cannot override the Plan, and that PBGs must adhere to Regulation 36B(4A) and RFRP/Plan provisions. (!) (!) (!) (!) (!) - It addresses whether the Supreme Court’s directions to deposit Rs. 150 Crore cash by 31.01.2024 were binding and whether failure to deposit triggers liquidation. (!) (!) (!) - It considers propriety of the NCLAT’s conclusions regarding airport dues, PF/Gratuity, and other CPs, and whether these findings were perverse or lawful. (!) (!) (!) - The decision ultimately directs liquidation under Article 142 due to failure to implement, and upholds that Plan modification or withdrawal post-approval is not permitted. (!) (!) (!)
JUDGMENT :
J.B. PARDIWALA, J.
For convenience of exposition, this judgment is divided into the following parts: -
| INDEX | |
| A. | FACTUAL MATRIX |
| B. | SUBMISSIONS ON BEHALF OF THE APPELLANTS i. Issue No.1: Adjustment of PBG of Rs. 150 Crore towards the first tranche payment ii. Issue No. 2: Non-payment of Airport dues iii. Issue No. 3: Non-payment of Workmen and Employees’ dues iv. Issue No. 4: Achievement of Effective Date v. Issue No. 5: Non-fulfilment of Conditions Precedent |
| C. | SUBMISSIONS ON BEHALF OF THE RESPONDENTS |
| D. | ISSUES FOR DETERMINATION |
| E. | ANALYSIS i. Whether the Performance Bank Guarantee (PBG) could have been adjusted against the first tranche payment which was to be made under the Resolution Plan, within 180 days from the Effective Date in contravention of the order of this Court dated 18.01.2024, the terms of the Resolution Plan and the provisions of law? a. Whether the Conditions Precedent were fulfilled by Respondent No.1/SRA and the Effective Date was fixed at 20.05.2022? b. Whether the NCLAT could have directed the Performance Bank Guarantee (PBG) to be adjusted against the first tranche payment which was to be made within 180 days of the Effective Date? I. The adjustment of the PBG was impermissible under the terms of the Resolution Plan read with Regulation 36B(4A) of the 2016 Regulations II. The Lender’s Affidavit dated 16.08.2023 did not impose conditions which were different from the terms of the Resolution Plan. Error! Bookmark not defined. ii. Whether the non-implementation of the Resolution Plan by the SRA necessarily leads to the consequence of liquidation as under Section 33(3) of the IBC, 2016? a. Whether Respondent No.1/SRA had failed to implement the Resolution Plan on non-payment of the Airport Dues as per the terms of the Resolution Plan? b. Whether Respondent No.1/SRA could be said to have failed to implement the Resolution Plan on account of the non-payment of workmen and employees’ dues as per the terms of the Resolution Plan and the order of the NCLT dated 21.10.2022 which was confirmed y the order dated 31.01.2023 of this Court? c. Whether there were sufficient grounds before the NCLAT to hold that Respondent No.1/SRA had contravened the terms of the approved Resolution Plan and that the Corporate Debtor must be directed to be liquidated under Section 33(3) of the IBC, 2016? iii. Whether the timely implementation of the Resolution Plan is also one of the objectives of the IBC, 2016? |
| F. | SHORTCOMINGS AND SUGGESTIONS TO THE IBC, 2016. |
| G. | CONCLUSION |
1. These appeals arise from the judgment and order dated 12.03.2024 passed by the National Company Law Appellate Tribunal (hereinafter, the “NCLAT”) in Company Appeal (AT) (INS) 129-130 of 2023 filed by the Appellant herein by which the NCLAT dismissed the appeal and upheld the order dated 13.01.2023 passed by the National Company Law Tribunal (hereinafter, the “NCLT”). The order of the NCLT held that Respondent No.1 had fulfilled all the Conditions Precedent as stipulated in the Resolution Plan. The NCLAT further issued several directions including a direction that the Performance Bank Guarantee of Rs. 150 Crore (hereinafter, the “PBG”) could be adjusted towards the first tranche payment of Rs. 350 Crore which was to be made by Respondent No.1.
A. FACTUAL MATRIX
2. The NCLT vide its order dated 20.06.2019 in C.P. 2205 (IB)/ (MB)/ 2019 admitted the application for initiation of Corporate Insolvency Resolution Process (hereinafter, the “CIRP”) filed by State Bank of India (hereinafter, “SBI”) in respect of Jet Airways (India) Limited (hereinafter, the “Corporate Debtor”) in accordance with Section 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter, the “IBC, 2016”). The total admitted claim of the Financial Creditors was Rs. 7800 Crore (approx.). Pursuant to the aforesaid Order, Mr. Ashish Chhaw
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