NCLT warns Jet Airways CoC of contempt proceedings

Mumbai: The NCLT on Wednesday warned Jet Airways CoC of contempt proceedings if they do not release interim funds to the resolution professional by January 20 for completion of insolvency proceedings. "We again reiterate and instruct the Committee of Creditors (CoC) to release the interim amount as required by the RP of the grounded airline, so that the corporate insolvency resolution process (CIRP) is completed and the assets of Jet are not devalued," Mumbai-bench of NCLT in its order said.

Further, the bench comprising Bhaskara Pantula Mohan and Rajesh Sharma directed the CoC to at least pay the amount by January 20, or the tribunal will initiate contempt proceedings against the defaulting members. The tribunal directed the CoC members, who have not honoured the order of the court, to remain present on February 19 - the next date of hearing.

The National Company Law Tribunal (NCLT) also directed Indian Overseas Bank, which filed applications at the tribunal for exemption from payment as they are under Prompt Corrective Action (PCA) restriction to approach the government authorities concerned in this regard.

This direction came after the resolution professional pointed out that it is under tremendous pressure as many CoC members, in spite of the tribunal's earlier order, have not released funds.

The lenders had in-principle sanctioned Rs 63 crore to the RP. Lead banker SBI and two other banks had reportedly already disbursed their portion of the interim amount.

However, the bench exempted IDBI Bank from releasing these funds as it is under the Reserve Bank of India's PCA framework. The tribunal has also said that Indian Overseas Bank must seek similar exemption.