SC upholds NCLAT order on fee of dues to former staff of Jet Airways

In a setback to the Jalan-Kalrock consortium, the brand new homeowners of the cash-strapped Jet Airways, the Supreme Court docket on Monday upheld an NCLAT order directing the fee of the provident fund and gratuity dues of the grounded airline’s former staff.

A bench of Chief Justice DY Chandrachud and justices PS Narasimha and JB Pardiwala mentioned, ”Anybody stepping in would know that there are overriding labour dues. Unpaid labour dues all the time take priority. Someplace, there must be finality. Sorry, we won’t intervene.” The highest court docket refused to entertain a plea moved by the consortium and upheld the Nationwide Firm Regulation Appellate Tribunal’s (NCLAT) order, reported PTI on Monday.

The NCLAT judgment signifies that almost Rs 247.8 crore of gratuity claims are payable by the Jalan-Kalrock consortium on account of getting been admitted by the decision skilled. 

Holding the quantity of Rs 15,000 allotted as fee beneath the decision plan as untenable, the tribunal mentioned that an quantity of Rs 24,40,65,594 in direction of damages beneath Part 14B of Workers’ Provident Funds & Miscellaneous Provisions Act, 1952, as per the order dated October 10, 2018, must be paid to the workplace of the Regional Provident Fund Commissioner, Mumbai.

“The Supreme Court docket judgment is a harbinger of hope for 1000’s of Jet Airways staff who’ve struggled with non-payment of statutory dues of PF and Gratuity within the IBC proceedings. This judgement may have important bearing on lakhs of different staff whose claims are languishing for need of readability on the authorized place of dues beneath the regulation,” Narayan Hariharan, former Sr VP JetAirways and authorized consultant of Jet Affiliation and Employees informed Enterprise Right this moment.

On the outset, senior advocate Saurabh Kirpal, who appeared within the court docket on behalf of the consortium, mentioned they’ll now must put in a further quantity of greater than Rs 200 crore and it will be tough to revive the airline.

He mentioned as soon as accredited, the decision plan can’t be modified or taken again. Senior advocate Siddharth Bhatnagar and advocate Swarnendu Chatterjee appeared within the court docket on behalf of the Affiliation of Aggrieved Workmen of Jet Airways (AAWJA), comprising 270 former staff of the airline who had resigned on or after the service’s insolvency graduation date.

The previous staff had filed a caveat earlier than the highest court docket, anticipating the transfer of the consortium.

”This order will not be solely a path-breaking one, but additionally a ray of hope for all such workmen and staff who’re entangled in all these litigations,” Chatterjee informed reporters after the listening to of the matter.

The attraction in opposition to the NCLAT order was filed on behalf of the consortium of Murari Lal Jalan and Florian Kalrock, the profitable decision candidates for Jet Airways (India) Restricted.

The consortium has claimed that the data memorandum offered to it didn’t disclose any liabilities of the company debtor (Jet Airways) in direction of the provident fund and gratuity dues in full.

On October 21 final yr, the NCLAT had directed the consortium to pay the provident fund and gratuity dues of the workers of the airline.

It had directed the previous decision skilled to ”compute the funds to be made to workmen and staff inside one month from as we speak” and talk the identical to the Jalan-Kalrock consortium to take steps for the fee.

Permitting a batch of petitions filed by the associations of workmen, plane upkeep engineers, the Officers and Employees Affiliation and others, a two-member NCLAT bench had requested the brand new homeowners of the service to pay the provident fund dues as admitted by the decision skilled.

The appellate tribunal had additionally mentioned the workmen had been entitled to the fee of their gratuity dues as on the insolvency graduation date, after adjusting any quantity in direction of gratuity paid beneath the decision plan.

Jalan-Kalrock gained the bid by means of an insolvency decision course of for Jet Airways, which had stopped operations in early 2019 attributable to a monetary disaster. The airline is now making ready to restart its providers.

Based on the NCLAT order, full gratuity and provident fund must be paid to all workmen and staff who’ve resigned or retired. The calculation ought to be performed until June 20, 2019, the date of admission to insolvency.

Over and above the gratuity and provident fund, the complete due quantity of Rs 113 crore, as talked about in Kind H (draft plan), must be paid to the workmen.

”Workers shall even be entitled to the gratuity, which fell due as much as the insolvency graduation date,” the NCLAT had mentioned, including ”The workers are additionally entitled to the fee of their full provident fund, unpaid as much as the date of insolvency graduation.” The NCLAT order had come on a batch of petitions difficult orders of the tribunal’s Mumbai bench, which had on June 22, 2021 accredited the bids of the Jalan-Kalrock consortium.

5 appeals had been filed by the workmen and staff of Jet Airways and three by its operational collectors earlier than the NCLAT.

On January 10, in indicators of accelerating variations, the consortium had requested the airline monitoring committee’s authorised consultant, Ashish Chhawcharia, to not challenge any communication on behalf of the grounded service with out the approval of all of the members of the committee.

The consortium had written to Chhawcharia amid the persevering with uncertainty over the destiny of Jet Airways, which shuttered operations in April 2019.

With inputs from PTI