National Company Law Appellate Tribunal (NCLAT), New Delhi: The 3-Judge Member Bench comprising of Justice S.J. Mukhopadhaya (Chairperson) and Justice A.I.S Cheema (Judicial Member) and Kanthi Narahari (Technical Member), while pronouncing an order in regard to the “Jet Airways” setback addressed the following question:

“Whether separate proceeding(s) in ‘Corporate Insolvency Resolution Process’ against common ‘Corporate Debtor’ can proceed in two different countries, one having no territorial jurisdiction over the other?”

Further, noting the fact that separate ‘Corporate Insolvency Resolution Process’/ liquidation proceedings have been initiated against Jet Airways (India) Limited — ‘Corporate Debtor’, the one in India and another in Netherland, the point of determination as framed was,

“Whether by a Joint Agreement between the ‘Resolution Professional’ of ‘Corporate Debtor’ in India and Administrator in Netherland, as may be approved  by Appellate Tribunal, one proceeding in India can proceed for maximization of the asset of ‘Corporate Debtor’ and balancing all stakeholders, including Indian/Offshore/Creditors/Lenders”?

State Bank of India-Respondent 1, was represented by Ramji Srinivasan, Senior Advocate along with Counsel Karan Khanna.

It was directed to Respondent 1 that it may file a reply suggesting a procedure that may be followed in the facts and circumstances of the case, without any conflicting interest of stakeholders of both the countries.

Tribunal directed case for admission on 21-08-2019.

NCLAT also stated that during the pendency of the appeal, appellant administrator and Respondent 2 – ‘Interim Resolution Professional’ will cooperate with each other. It will be open to the appellant administrator to collate the claims of offshore creditors including ‘Financial Creditors’, ‘Operational Creditors’ and other stakeholders and forward their details to Respondent 2-‘Resolution Professional’ for purpose of preparing the Information memorandum with approval of ‘Committee of Creditors’.

Counsel, Sumant Batra who appeared on behalf of appellant administrator assured that-

  • Appellant Administrator will cooperate in the proceedings in India;
  • Will not sell, alienate, transfer, lease or create any 3rd party interest on the offshore movable and immovable assets of ‘Corporate Debtor’.

In respect to the above undertaking by an appellant administrator, the impugned order dated 20-06-2019 passed by NCLT, so far as it relates to the declaration that offshore proceeding is not maintainable, shall remain stayed.

  • Interim Resolution Professional of this country will ensure that ‘Corporate Debtor’ remains a going concern and will take the assistance of the (suspended) Board of Directors, paid directors and employees.
  • Person authorised to sign bank cheques may issue cheques only after Interim Resolution Professional’s authorisation.
  • Bank accounts of Corporate Debtor be allowed to be operated for the day-to-day functioning of the company such as for payment of current bills of suppliers, salaries and wages of paid director, employees’/workmen electricity bills, etc., subject to availability of fund.[Jet Airways (India) Ltd. v. SBI, 2019 SCC OnLine NCLAT 385, decided on 12-07-2019]

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