The National Company Law Appellate Tribunal (NCLAT) on Thursday directed the Jet Airways liquidator to keep the proceeds from the sale of three grounded Boeing 777-300ER aircraft to Malta-based Ace Aviation in an escrow account until a dispute over dues payable to Mumbai International Airport Ltd (MIAL) is resolved.
The bench, led by Justice N. Seshasayee (Judicial Member) and Barun Mitra (Technical Member), asked the National Company Law Tribunal Mumbai to decide the matter regarding MIAL’s airport dues, while granting lenders and the liquidator the liberty to approach NCLT or NCLAT for any clarification.
The appellate tribunal clarified that it is not deciding the entitlement of funds, and the order is solely to keep the money in escrow, leaving the liquidator free to decide the status of MIAL’s dues as per the Insolvency and Bankruptcy Code’s waterfall mechanism, under which a corporate debtor's debts are paid to various stakeholders by following a structured and predictable hierarchy.
“Keep the amount in an escrow account until that issue is finally resolved. Full stop,” the bench remarked.
MIAL, owned by the Adani Group, approached the NCLAT seeking clarity on its share from the aircraft sale, claiming parking fees and related dues for planes parked at Mumbai airport since 2018. The airport operator moved the NCLAT in response to a contempt plea filed by Ace Aviation at the NCLT Mumbai, alleging that MIAL had not complied with the 17 September NCLT order, which required it to provide bank details, issue a no-objection certificate and cooperate with the sale within seven days.
Under a 7 August consent order, MIAL had agreed to give up all claims, liens or encumbrances on the aircraft — but only for the buyers and only for the period before the sale.
Future parking charges
Under the arrangement, Ace Aviation or its affiliate Challenge Air Cargo Ltd would deposit ₹14 crore with MIAL to cover future parking and airport charges — ₹4 crore each for two planes and ₹6 crore for the third. The buyers must remove two aircraft within four months and the third within six months, paying ₹1 crore per aircraft per month for any extended period. MIAL would deduct charges from the deposit and facilitate the transfer of the aircraft.
According to the consent order, if the buyers fail to pay or remove the aircraft on time, MIAL can take legal action, including exercising its statutory lien. Once all the dues are cleared, MIAL will issue the no-objection certificate for export, and any remaining deposit will be refunded.
The three Boeing 777-300ER aircraft, parked at Mumbai airport since 2018, have been embroiled in a longstanding legal dispute over unpaid dues. In 2022, Ace Aviation secured the bid to purchase the aircraft for ₹400 crore, but the sale was delayed due to a deadlock within the monitoring committee.
While Jet Airways’ lenders supported the sale, a group of former employees opposed it, citing liens for unpaid gratuity and provident fund dues.
Ace Aviation approached the NCLT, which in October 2023 directed the committee to finalise the sale, recognising Ace Aviation as the eligible bidder. The Supreme Court also instructed the monitoring committee in 2024 to complete the sale.
MIAL maintained its objection, asserting a lien on the aircraft for outstanding dues.
According to the Jet Airways resolution plan by the Jalal Kalrock Consortium (JKC), airport dues and parking charges — initially estimated at ₹475 crore — had escalated to about ₹1,000 crore.
However, circumstances changed when the Supreme Court, exercising its special powers under Article 142 of the Constitution, ordered Jet Airways into liquidation on 7 November after finding that JKC failed to comply with the conditions of the resolution plan, including the payment of airport dues.
MIAL raised concerns over the survival of the aircraft sale agreement. While the airport operator initially refused to release ownership until the dues were cleared, it later consented under the 7 August order, but subsequent disagreements led to the current NCLAT proceedings.