The liquidator of Jet Airways has filed an appeal with the National Company Law Appellate Tribunal (NCLAT) seeking to recover $92.12 million (equivalent to nearly 873 crore rupees) in advance payments for aircraft from Boeing. This action follows the rejection of his claim by the National Company Law Tribunal (NCLT).
A bench comprising Judge Mohammad Faiz Alam Khan and Technical Member Naresh Saleci issued a notice to Boeing on Tuesday, acknowledging that the appeal warrants consideration. Boeing's legal counsel accepted this notice and was granted two weeks to prepare a response, while the liquidator was given one additional week to file objections. The hearing is scheduled for the first week of December.
This appeal challenges the NCLT order dated September 11, which dismissed the claim by liquidator Satish Kumar Gupta for $92.12 million from the aircraft manufacturer.
Appearing before the appellate tribunal, the liquidator's lawyer argued that Boeing withheld the advances paid by Jet Airways and subsequently claimed an unpaid contractual balance during the airline's insolvency process. The liquidator clarified that the appeal pertains solely to the return of advance payments and does not seek any interim relief.
The dispute stems from two sales agreements signed in 2013 concerning Boeing 737-8 and 787-9 aircraft. Jet Airways made advance and pre-delivery payments under these agreements but was unable to meet subsequent payment obligations due to growing financial difficulties.
Boeing sent a suspension notice in May 2019, followed by a termination notice in December 2020. None of the aircraft stipulated in the contracts were delivered to the airline.
Before the NCLT in Mumbai, the liquidator insisted that the advance payments constituted assets of Jet Airways' liquidation estate and should be returned, as he believed Boeing had neither contractual nor legal grounds to retain these sums. However, Boeing countered that the advances had already been offset against its outstanding claim against the airline. The company argued that the liquidator could not demand reimbursement for amounts credited against a larger claim recognized during the insolvency proceedings and subsequently confirmed upon liquidation.
The manufacturer also cited Rule 20 of the Indian Council of Bankruptcy and Insolvency (Liquidation Process Rules), which permits the set-off of mutual debts. The NCLT bench in Mumbai, consisting of Judicial Member Sushil Mahadeorao Koche and Technical Member Prabhat Kumar, declined to adjudicate competing claims under Section 60(5) of the Insolvency and Bankruptcy Code. The Tribunal noted that resolving the dispute would require examining the underlying sales agreements, presenting evidence from both parties, and conducting a full trial. Neither party submitted the agreements, citing confidentiality concerns.
The Tribunal ruled that 'these issues require assessment of the agreements between the parties, presentation of evidence by the parties, and a full trial.' Recognizing that the contractual dispute was separate from the insolvency proceedings, the NCLT rejected the liquidator's application without determining whether Boeing had the right to confiscate or adjust the advance payments. The liquidator has now challenged this decision in the NCLAT.
