NCLAT asks Jet Airways to vacate Mack Star Marketing premises

The National Company Law Appellate Tribunal (NCLAT) has ordered Jet Airways, which is preparing to resume flight services in the coming months, to leave its office at Mack Star Marketing’s premises in Mumbai.

During the passage of an order on May 6, a three-member bench of NCLAT also said that no monthly fees would be payable to Mack Star Marketing for the use of the premises during the period the airline was in operation. company insolvency resolution procedure course (CIRP) .

Bogged down by financial difficulties, Jet Airways closed its operations in April 2019 and the insolvency resolution process was launched in June of the same year.

The NCLAT’s latest ruling follows a petition filed by Mack Star Marketing against an order issued by the Mumbai Bench of the National Company Law Tribunal (NCLT) in March 2021. The entity had claimed that the NCLT “wrongly justified “the continuation of the occupation. of Jet Airways on the premises.

“Defendant (RP, Jet Airways) is required to return vacant possession of the premises within 15 days from today,” the NCLAT order said.

In addition, the appeals tribunal said Mack Star Marketing was free to take appropriate action on its licensing fee claim after June 22, 2021, when Jet Airways’ CIRP was completed.

“Once possession of the premises has been turned over to the Appellant (Mack Star Marketing) by the Respondent, the Appellant must communicate within 30 days with the Respondent regarding the refund of the security deposit, if any”, said the NCLAT bench, led by the president. Judge Ashok Bhushan, said in the order.

Jet Airways, in 2011, entered into a licensing agreement with Mack Star Marketing to use its building as office space.

In 2018, Jet Airways vacated four office units and large unpaid dues were cleared by Mack Star Marketing from the security deposit. The airline had retained two units and a balance security deposit of Rs 1.35 crore was withheld by the petitioner (Mack Star Marketing).

However, Jet Airways failed to pay the monthly license fee and a notice was also issued in April 2019 asking it to leave the offices if dues are not paid.

In June 2019, the CIRP was initiated against Jet Airways and the moratorium went into effect.

“The mere fact that the CIRP has been triggered and a moratorium has been imposed does not exempt the debtor company from paying for the premises and facilities that the debtor company benefits from during the period of the CIRP,” he said.

The appeal tribunal also said that the premises which were occupied by Jet Airways are business premises and that the appellant was deprived of them for use for a long period “without any justifiable reason”.

However, the NCLAT noted that in the resolution plan, no amount was set aside for the payment of leave and premises license fees. There was no provision to make payment to Mack Star Marketing since the resolution professional never accepted the amount as CIRP costs, the appeals tribunal heard.

“We are therefore of the view that no direction in this appeal can be given for the payment of leave and permit expenses to the appellant during the CIRP period, even though we are satisfied that the appellant was entitled to determine that the monthly fee payable to the caller under the service agreement should have been treated as part of the CIRP costs,” he said.

(Only the title and image of this report may have been edited by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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