The New Delhi Bench of the National Company Law Appellate Tribunal (NCLAT) has strongly said that a challenge to the sale process by ex-employees of Jet Airways after waiting for over fifteen months, where the sale has already been subjected to judicial scrutiny at multiple stages including approval by the CoC, affirmation by the NCLT, NCLAT, and the Supreme Court, amounts to an attempt to frustrate the sale process and delay realisation of assets. The NCLAT held that the former employees of Jet Airways failed to establish locus to challenge the sale of three Boeing 777-300ER aircraft to Ace Aviation entities, as their remedy lies in receiving dues under the Section 53 waterfall mechanism and not in questioning the asset sale process.
The legal principle laid down by the NCLAT is that former employees of a Corporate Debtor, whose dues are to be paid under the waterfall mechanism contained in Section 53 of the IBC, do not have the locus to challenge the sale process of assets conducted by the liquidator during liquidation proceedings, as their remedy lies in receiving their dues under Section 53 and not in questioning the manner or valuation of asset sales.
The NCLAT also held that a sale process initiated during the CIRP stage can validly be continued and completed during the liquidation framework, as there is no bar in the provisions of the IBC to disentitle the liquidator from continuing such process, and Regulation 32 of the Liquidation Process Regulations vests unfettered power on the liquidator to conduct the sale subject to consideration of creditors holding security interest.
The Division Bench comprising Justice Mohammad Faiz Alam Khan (Judicial Member) and Arun Baroka (Technical Member) noted that despite being given an opportunity to file written submissions, the appellants failed to do so within the stipulated period. The appellants, being ex-employees of the Corporate Debtor, claimed locus to challenge the sale on the ground that their dues would be paid under Section 53 of the IBC, and alleged that the aircraft were sold at undervalued prices determined in 2022 without any fresh valuation exercise, that the involvement of VMAN Aviation Services raised conflict of interest concerns, and that the agreements were executed outside India despite the aircraft being physically situated within India, in violation of Section 35(1) of the IBC.
The NCLAT observed that on Apr 22, 2026, when the impugned order was passed, no one was present for the appellants before the NCLT, yet the Adjudicating Authority considered the merits of the application and disposed of the same on merits. The NCLAT reproduced the relevant paragraphs of the impugned order, which noted that the CoC had approved the resolution plan contemplating auction sale of three aircraft owned by the Corporate Debtor and parked at Mumbai Airport, that ACE received the LOI on Oct 12, 2022 with the sale to be concluded by Dec 16, 2022, that ACE deposited USD 5.6 million as Earnest Money Deposit, that the sale was kept in abeyance by the Monitoring Committee, and that the NCLT’s order dated Oct 17, 2023 directing completion of the sale was upheld by the NCLAT and the Supreme Court on Mar 07, 2024.
The NCLAT further observed that the facts stated in the impugned order were not disputed by the appellants during submissions. The NCLAT noted that in its earlier judgment dated Dec 22, 2023 in Company Appeal (Insolvency) No. 1517 of 2023 and Company Appeal (Insolvency) No. 1595 of 2023, it had categorically stated that the appellants were fully protected under the orders passed by the Adjudicating Authority and that the entitlement of the All India Jet Airways Officers and Staff Association was not affected so far as receipt of their dues under the resolution plan was concerned.
The NCLAT also noted that the NCLT had disposed of IA No. 223 of 2025 filed by the All India Jet Airways Officers and Staff Association on Jan 28, 2025, holding that nothing was brought before it reflecting illegal sale or alienation of assets and that under Section 35 of the IBC, it is the duty of the liquidator to take control of all assets of the Corporate Debtor.
Further, the NCLAT noted that the NCLT had disposed of IA No. 718 of 2025 filed by the Jet Aircraft Maintenance Engineers Welfare Association on Mar 10, 2025, holding that there is no bar in the provisions of the IBC to disentitle the liquidator from continuing the process of sale of assets initiated by the RP prior to commencement of liquidation, that Regulation 32 of the Liquidation Process Regulations provides the manner in which the sale would be conducted by the liquidator and vests unfettered power on the liquidator to do so subject to consideration of creditors holding security interest, and that the liquidator is duty-bound to settle claims of creditors in accordance with Section 53 of the IBC in the order of priority without any further direction from the Adjudicating Authority.
Briefly, the appellants, Aman Monga and another, are former employees of Jet Airways (India) Limited (the Corporate Debtor). The insolvency process against Jet Airways was initiated on June 20, 2019 under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC), and the resolution plan submitted by the Jalan Fritsch Consortium was approved by the Adjudicating Authority on June 22, 2021, with a Monitoring Committee constituted comprising representatives of financial creditors, including State Bank of India and Punjab National Bank.
During the Corporate Insolvency Resolution Process (CIRP), a decision was taken to sell certain aircraft assets, including Boeing 777-300ER aircraft, and Letters of Intent (LOIs) were issued on Oct 12, 2022 in favour of entities belonging to the Ace Aviation Group (Respondents 3, 4, and 5). The NCLT directed that the sale process be resumed and completed, which was upheld by the NCLAT and affirmed by the Supreme Court on March 07, 2024.
However, the successful bidder failed to deposit the balance sale consideration within the stipulated period, leading the Supreme Court to direct liquidation of Jet Airways under Section 33 of the IBC on Nov 07, 2024. The liquidation proceedings commenced and the Stakeholders’ Consultation Committee (SCC), constituted under Regulation 31A of the Liquidation Process Regulations, 2016, decided to continue the sale process and adopted the Asset Sale Process Memorandum, ratifying the prior acts of the erstwhile RP and Monitoring Committee with 79.81% voting share approval.
The sale of aircraft assets was executed on Feb 05, 2026 for approximately USD 12.5 million, USD 16 million, and USD 17.5 million respectively, with the entire balance sale consideration of USD 41.4 million transferred by Respondents 4 to 6 to the liquidation account on 22.01.2026, and the sale was disclosed to stock exchanges on Feb 11, 2026. The appellants thereafter approached the NCLT seeking to declare the sale as vitiated, which was dismissed.
