National Company Law Tribunal
Case BriefsTribunals/Commissions/Regulatory Bodies

National Company Law Tribunal (NCLT): The Coram of Kapal Kumar Vohra, Technical Member and Justice P.N. Deshmukh, Judicial Member, while addressing a matter wherein Jet Airways requested Mumbai Airport not remove its assets from its premises, expressed that,

“…it is to be noted that one of the principal objectives of the Code is to provide for revival of the CD and every attempt ought to be made to revive the CD and Liquidation being the last resort.”

An application was filed under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 in relation to the strategic assets of the Applicant (Jet Airways) which were placed at the respondent’s Hangar and other places at the airport, contending that the applicant had ceased its operation as commercial airline, prior to commencement of Corporate Insolvency Resolution Process (CIRP) and respondent requested the applicant to vacate the facility made available as aforesaid which is in use of the Applicant contending that permission of subject premises granted to the Applicant for its use stood revoked.

The purpose of filing the present application was to restrain the respondent from removing the applicant’s assets lying at the respondent’s premises at Mumbai International Airport Limited (MIAL).

Request for unhindered access to applicants including his representatives, workmen, nominees, etc. was also made.

Analysis and Decision

Coram stated that the Resolution Mechanism was at an advanced stage and since admittedly the premises were made available to the applicant prior to when it ceased its operation as commercial Airlines and it was the applicant’s specific case that the aircrafts, engines, and auxiliary power units etc. were lying at MIAL Airport which required maintenance at regular intervals of seven, fifteen, thirty, ninety and three sixty-five days, for instance, regular check-ups of tyre pressures of aircrafts, the battery recharges and the engine runs.

In Tribunal’s opinion, if the applicant won’t be allowed to have access to the subject premises, it would certainly cause great hardships to the applicant to perform the above-stated activities which in turn would result in severe deterioration in value assets.

Applicant also stated that despite cessation of Airline operations of the CD, the Erstwhile Resolution Professional had, with the approval of the Committee of Creditors, retained a team of personnel to look for the maintenance of aircraft and engines placed at MIAL Airport including Hangar.

Therefore, the respondent was restrained from removing applicant’s assets from its premises including MIAL Hangar and not to deny access to the applicant’s representatives, workmen, nominees, etc. till the adjourned date.

Matter to be listed on 4-3-2022. [SBI v. Jet Airways, 2022 SCC OnLine NCLT 17, decided on 9-2-2022]


Appearance (via video-conference):

For the Applicant: Mr. Rohan Rajadhyaksha, Advocate

For the Respondent: Mr. Vikram Nankani, Sr Advocate


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Case BriefsTribunals/Commissions/Regulatory Bodies

Competition Commission of India (CCI): Coram of Ashok Kumar Gupta (Chairperson) and Sangeeta Verma and Bhagwant Singh Bishnoi, Members found no cartelization in respect to the skyrocketing prices by the airlines during the Jat Agitation.

Informant had alleged that Jet Airways, Spice Jet and Indigo had contravened the provisions of Section 3 of the Competition Act.

Informant’s Submissions

During the month of February 2016 when Jat Agitation was going on, domestic airlines had skyrocketed their rates particularly between the Delhi-Chandigarh and Delhi-Amritsar routes.

From the above instance, it was noted that the aviation industry had been exploiting the passengers during such conditions as the same was observed during the Chennai Floods and Nepal Earthquake.

Preliminary Conference

Commission on noting the allegations and submission by the Informant held a preliminary conference and made a reference to the Director-General of Civil Aviation in terms of Section 21 A of the Act, later the Commission sought certain information from 5 airlines.

What did the Commission note?

Commission noted that with the use of algorithms, there exists a high possibility of collusion with or without the need of human intervention or coordination between competitors.

Therefore, Commission opined that there was a need for investigation of the algorithms used by airlines, so as to determine whether the fares set by the airlines during the alleged period were an outcome of collusion or not?

 Hence, on 9-11-2018 an order was passed to cause an investigation to be made.

 DG in its investigation report concluded that no contravention of Section 3(3) read with Section 3(1) of the Act was found against the conduct of Spice Jet, Air India, Go Air and Indigo during the period of ‘Jat’ Agitation, but in regard to Jet Airways, DG excluded the same from its purview of investigation since the airline was grounded in April 2019 and due to grounding of Jet Airways and un-availability of any employee/personnel, the Resolution Professional could not provide any price data, booking dates, capacity of flight, number of passengers flown and the number of price buckets used by Jet Airways during the period of ‘Jat’ Agitation.

After the objections and suggestions were filed, parties were directed to appear for a final hearing on the investigation report on 23-02-2021.

On the fixed date of hearing, Commission noted that neither the informant nor its counsel appeared before the Commission.

Further, Commission considered the matter in its ordinary meeting and decided to pass an appropriate order.

What did the investigation try to ascertain?

It was ascertained whether the increase in air-ticket prices during the period of Jat Agitation was the result of an agreement between the OPs?

Whether the price data suggested any uniformity in prices indicative of price parallelism?

DG found no contravention of Section 3(3) read with Section 3(1) of the Act against the conduct of Spice Jet, Air India, Go Air and Indigo during the period of Jat Agitation.

Analysis and Decision

Commission noted that the existence of an ‘agreement’ is sine qua non before ascertaining whether the same is anti-competitive or not in terms of the scheme of Section 3 of the Act.

Definition of ‘agreement’ as given in Section 2(b) of the Act requires inter alia any arrangement or understanding or action in concert whether or not formal or in writing or intended to be enforceable by legal proceedings.

The establishment of ‘agreement’ would require some explicit or tacit arrangement amongst the parties wherefrom a concert between them can be deciphered. This may include, amongst others, exchange of information in the form of communications/ e-mails or in any other form of communication amongst the competitors, whether – explicit or tacit, oral or in writing, formal or informal including through parallel conduct which cannot be otherwise explained etc.

 In the instant matter, no such emails were found which could show any exchange of information among the airlines establishing any form of collusion during or after the period of Jat Agitation.

The investigation did not reveal any price parallelism or identical pricing of tickets by the airlines.

Further, elaborating more, Commission noted that widespread usage of algorithms in price determination by individual firms could pose possible anti-competitive effects by making it easier for firms to achieve and sustain collusion without any formal agreement or human interaction.

Based on DG’s investigation, Commission noted that airlines were using different software’s for the pricing of tickets in different fare bucket.

No evidence on record was found to establish a cartel amongst the airlines during the period of Jat Agitation.

Hence, no case of contravention of the provisions of Section 3(1) of the Competition Act was made out against the airlines. [Shikha Roy v. Jet Airways (India) Ltd., 2021 SCC OnLine CCI 31, decided on 3-06-2021]


Advocates before the Court:

For SpiceJet Limited: Mr. Abhishek Sharma, Advocate along with Mr. Shashi Shekhar, Executive (Legal) of OP-2

For InterGlobe Aviation Limited: Mr. Raj Shekhar Rao, Senior Advocate with Mr. Sagardeep Rathi, Mr. Pranjal Prateek and Mr. Ebaad Nawaaj Khan, Advocates

For Go Airlines (India) Limited: Mr. Vihang Virkar and Mr. Karun Jhangiani, Advocates along with Mr. Prashant Shinde, Senior General Manager (Legal) of OP-4

For Air India Limited: Mr. Pratik Majumdar, DGM of OP-5

Hot Off The PressNews

The fare bands within which the airlines have to operate have been extended upto 24th February, 2021 by the Ministry of Civil Aviation. These fare bands came into force with effect from 21st May, 2020.

            The daily passenger traffic has reached 2.05 lakh on 1st November, 2020. When the domestic aviation opened in May 2020, the airlines were enabled to fly upto 33%  of the normal capacity (as per summer schedule, 2020).   At that time, the average daily traffic was about 30,000. This cap was enhanced to 45% w.e.f.  26th June, 2020. This cap was further revised to 60% w.e.f. 2nd September, 2020. At present, the airlines can operate upto 60% of their capacity.

              Ministry of Civil Aviation is monitoring the traffic every day, and it is expected that the traffic would further pick up because of the festival season and as the passenger traffic increases, the upper cap would be revised to 70-75% of normal capacity in the coming days.


Ministry of Civil Aviation

[Press Release dt. 05-11-2020]

[Source: PIB]

NGT
Hot Off The PressNews

National Green Tribunal (NGT): The Bench headed by NGT chairperson Adarsh Kumar Goel, J., stated that Director General of Civil Aviation (DGCA) has been repeatedly defiant on issuing circular to airlines operating at the IGI airport in order to restrict them from emptying the toilet tanks mid-air.

The Bench further stated that “Since there is a repeated defiance by the DGCA with absolutely no acceptable explanation, we have no option but to direct the DGCA to comply with the directions already issued on or before August 31, 2018.” If the same act continues, NGT would have to consider prosecution against the Director-General.

[Source: The Times of India]