Liquidation of Jet Airways: A Legal Analysis of the Supreme Court’s Ruling and its Implications on Corporate Insolvency in India

Abstract

Corporate liquidation involves ceasing operations and utilising assets to settle outstanding debts to creditors. It is generally a matter of last resort when the Corporate Insolvency Resolution Process (CIRP) fails, either due to the absence of a viable resolution plan or its inefficient implementation. In a recent and significant development in this area, the Supreme Court (SC) of India, on 7th November, 2024, in the case of State Bank of India and Others. v. The Consortium of Mr. Murari Lal Jalan and
Mr. Florian Fritsch and Another, ordered the liquidation of Jet Airways (India) Limited, one of the previous major airline companies operating in both, the domestic as well as the international aviation sector. In reaching its conclusion, it established certain key principles that can be incorporated for future insolvency cases. In this backdrop, this paper seeks to examine the history and background of the insolvency of Jet Airways. It further aims to legally analyse this SC decision, considering the existing
legal frameworks and previous developments. It then goes on to explore the potential practical implications of this decision on the plethora of stakeholders involved as well as the broader legal landscape of insolvency in India. Lastly, it conceptualises a detailed model, evolving certain practical and pragmatic suggestions that could be incorporated in future legislative frameworks, as well as by the courts while adjudicating such matters. Although the geographical scope of this paper is limited to India, it includes comparative references from other jurisdictions in order to facilitate a comprehensive analysis. The structure of the paper is divided into two broad sections with the intention of presenting a systematic write-up on this matter which would foster easy comprehension by the readers. These include: first, the introduction, background and history of this matter which would set the descriptive foundation and second, the analytical legal and practical discussion. The main argument of this paper is that while the SC has given the correct ruling, there are a few criticisms and drawbacks that could be explored, especially while considering the model that has been conceptualised.