Supreme Court: In appeal filed by the consortium of Murari Lal Jalan and Florian Fritsch, the successful resolution applicants for Jet Airways (India) Limited, against the National Company Law Appellate Tribunal (‘NCLAT’) order, wherein the Tribunal had directed the consortium to pay the provident fund and gratuity dues of the employees of the airline, the full bench of Dr. D.Y Chandrachud, C.J., P.S Narasimha and J B Pardiwala, JJ. upheld NCLAT order directing the payment of the provident fund and gratuity dues of the airline’s former employees.

In the case at hand, five appeals were filed by the workmen and employees of Jet Airways and three by its operational creditors before the NCLAT. Allowing a batch of petitions filed by the associations of workmen, aircraft maintenance engineers, the officers and staff association and others, NCLAT had asked the new owners of the carrier to pay the provident fund dues as admitted by the resolution professional. The appellate tribunal had also said the workmen were entitled to the payment of their gratuity dues as on the insolvency commencement date, after adjusting any amount towards gratuity paid under the resolution plan. According to the NCLAT order, full gratuity and provident fund must be paid to all workmen and employees who have resigned or retired. The calculation should be done till 20-06-2019, the date of admission to insolvency. Over and above the gratuity and provident fund, the entire due amount of Rs 113 crore, as mentioned in Form H (draft plan), must be paid to the workmen. Hence, the consortium filed the present appeal.

The consortium has claimed that the information memorandum provided to it did not disclose any liabilities of the corporate debtor (Jet Airways) towards the provident fund and gratuity dues in full.

The Court said that “anyone stepping in would know that there are overriding labour dues. Unpaid labour dues always take precedence. Somewhere, there has to be finality. Sorry, we will not interfere”

Thus, it held that there is no error in the order of the NCLAT dated 21-10-2022.

[Jalan Fritsch Consortium v. Regional Provident Fund Commissioner, 2023 SCC OnLine SC 106, decided on 30-01-2023]

Advocates who appeared in this case :

For Appellant(s) Senior Advocate Saurav Kripal, Advocate Pooja Mahajan, Advocate Mahima Singh, Advocate Arveena Sharma, Advocate Komal Abrol, Advocate Mehak Nayak, Advocate -On-Record Avinash B. Amarnath;

For Respondent(s) Advocate Gaurav H Sethi, Advocate Rahul D Oak, Advocate Sujoy C Datta, Advocate Swarnendu Chatterjee.

*Apoorva Goel, Editorial Assistant has reported this brief.

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