Title: STATE BANK OF INDIA V THE CONSORTIUM OF MR MURARI LAL JALAN AND
MR FLORIAN FRITSCH AND ANR
Citation: Civil Appeal Nos 3736-3737 of 2023
Dated on: 18.1.2024
Corum: HON’BLE JUSTICE DR DHANANJAYA Y CHANDRACHUD, CJI
Facts of the case
This present contention Is the insolvency resolution of jet Airways Limited, a corporate Debtor. Murari Lal and Florian Fritsch a consortium submitted a resolution plan which included certain conditions perquisite for the implementation of the plan such as international traffic lights clearance, validation for airport operator permit, submission and approval of business plan, slot allotment and approval and demerger of the ground handling business. All these resolution plans were submitted and later approved by the NCLT- National Company Law Tribunal. The resolution plan also included a clause which provided that the plan would be automatically withdrawn if the conditions are not fulfilled within 270 days from the approval date and the transfer of control of corporate debtor to the monitoring committee. Later on, there was a dispute between leaders of successful resolution applicant and representative of SBI, regarding the compliance of the conditions precedent and the infusion of funds by the resolution applicant. The NCLT determined that the resolution applicant had met the requirements precedent, allowing it to acquire control and management of the corporate debtor. The NCLT also granted a 180-day exception for the plan’s execution. SBI challenged the NCLT’S order before the National Company Law appellant Tribunal which allowed the extension of time for approval of resolution applicant to infuse funds and comply with plan but did not allow the stay order. Due to this the SBI filed an appeal before the SC of India challenging the order of NCLAT for modification of order.
Issues
The main issue in the appeals is whether the successful resolution applicant (SRA) met the conditions precedent stipulated in the resolution plan and is entitled to an extension of time to pay Rs 350 crores to the lenders represented by the State Bank of India (SBI).
Court analysis and judgement
The SC in the present matter reviewing various other precedents acknowledged the conditional nature of SBI’s offer, and directed the Successful Resolution Applicant to deposit the remaining funds by January 31, 2024. The court highlighted that importance of meeting the agreed-upon deadlines while upholding the PBG’s (Performance bank guarantee) validity. If the conditions were not met, the consequences outlined in the Resolution Plan would be imposed while the NCLAT reached a final ruling on the current appeal.
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Written by- Namitha Ramesh
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