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Jet Airways cabin crew, ground staff move NCLAT, seek stay on Jalan Kalrock resolution plan

Jet Airways cabin crew, ground staff move NCLAT, seek stay on Jalan Kalrock resolution plan

In their petition filed before the NCLAT, the Jet Airways Cabin Crew Association and Bhartiya Kamgar Sena have submitted that dues of all workmen of the airline were not included as part of the Corporate Insolvency Resolution Process cost

In June, NCLT approved Jalan Kalrock Consortium's resolution plan for Jet Airways In June, NCLT approved Jalan Kalrock Consortium's resolution plan for Jet Airways

Jet Airways' cabin crew and ground staff have challenged the Jalan Kalrock consortium's resolution plan, which was approved by the National Company Law Tribunal (NCLT) in June, flagging concerns about pending salaries and retirement benefits. In their petition filed before the National Company Law Appellate Tribunal (NCLAT), the Jet Airways Cabin Crew Association and Bhartiya Kamgar Sena have submitted that dues of all workmen of the airline were not included as part of the Corporate Insolvency Resolution Process (CIRP) cost.

In June, NCLT approved Jalan Kalrock Consortium's resolution plan for Jet Airways, which remains grounded for more than two years now. The once-storied full service carrier, shuttered operations in April 2019 due to financial woes and the insolvency resolution process commenced in June the same year.

The two groupings of employees have requested the NCLAT to "quash and set aside" the order passed by the Mumbai Bench of the NCLT's Mumbai bench approving the consortium's resolution plan. Besides, they have urged that execution of the order should be stayed till their petition is heard.

Jet Airways Cabin Crew Association (JACCA) claims to represent a majority of cabin crew and Bhartiya Kamgar Sena claims to represent more than 70 per cent of the airline''s ground staff.

The petition has pointed out that the resolution plan includes demerger of Jet Airways'' subsidiary Airjet Ground Services Ltd (AGSL). Also, the services of the airline''s employees, who were on the payroll as on the date of approval of the resolution plan, will be transferred to the demerged entity.

"It further proposes that with the said demerger of employees, the corporate debtor (Jet Airways) will not be liable for all the retirement benefits of said demerged employees at all and the said AGSL, which is not yet even operational, will be solely responsible for the said liability," it noted.

Also, the petition has sought a stay on the proposed liquidation of the AGSL and sales of assets like aircraft, aircraft spares and ground equipment of Jet Airways till the NCLAT takes a final decision.

As per the petitioners, their members did not receive any salary from March 2019 and had submitted their claims during the CIRP.

It was assured by the NCLT earlier that entire ground staff, engineers and pilots should be considered as an asset of the company. "The above observation by NCLT as well as the approach of Respondent No 1 (Resolution Professional) clearly depicts that the dues of all workmen were that point of time considered as CIRP cost," the petitioners have contended.

Further, the petitioners have flagged the consortium''s requirement that if its proposal, dated July 5, 2021, was not accepted by 95 per cent of the employees/ workmen, then it would be entitled to liquidate AGSL.

According to the petition, it was also mentioned that if any employee challenges the proposal, then the proposal will stand withdrawn.

The proposal, dated July 5, pertains to employee dues and retirement benefits, among others. It also mentioned that 76 per cent of AGSL will be held by the Employees Welfare Trust of AGSL.

In a nutshell, the entire liability of retirement benefits of said demerged employees of Jet Airways will be saddled upon their own back through this new entity AGSL and through this Employees welfare Trust mechanism, the petition said.

"This clearly violates the core principles of Industrial Disputes Act, 1947. In addition to that Ground Support Equipments of the Jet Airways, which has no utility value and can only be considered as scrap, will be conveniently transferred to AGSL which has liquidation value of not more than (Rs) 10 crore," it said.

Further, the petitioners have alleged that the respondents are desperate to shy away from the liability of employees of Jet Airways since liquidation of AGSL will not fetch any good amount to settle the dues of the employees.

"In view of the above as well as various other points, the said impugned order dated June 22, 2021, proposal dated July 5, 2021 and the said approved Resolution Plan deserves to be quashed and set aside to the extent of continuity of services of employees and their legal dues," it said.

Ashish Chhawchharia, who was the resolution professional for Jet Airways during the CIRP, and the consortium are among the respondents.

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