In a significant development, the Bombay High Court has granted bail to Jet Airways founder Naresh Goyal on medical grounds. The 75-year-old former chairman of the now-defunct airline, who is battling cancer, had sought bail to undergo treatment. This decision comes in the wake of a money laundering case filed by the Enforcement Directorate (ED) against Goyal.

The ED had arrested Goyal in September 2023, accusing him of siphoning off Rs 538.62 crore, a loan given to Jet Airways by Canara Bank, and laundering the money for personal use. Despite the ED counsel's opposition to the bail plea, arguing that Goyal could be admitted to a hospital of his choice for treatment while remaining in custody, the court granted him bail.

This is not the first time Goyal has been granted bail. He had previously been granted interim bail on medical grounds, which has now been made permanent.

Interim Bail and Subsequent Developments

In May 2024, the Bombay High Court granted Goyal interim bail for two months, which was later extended by another two months. The case also involved Goyal's wife, Anita Goyal, who was arrested in November 2023 when the ED submitted a charge sheet. A special court granted her bail the same day, citing her age and health condition. She passed away on May 16, 2024.

In a related development, the Supreme Court last week ordered the liquidation of Jet Airways, stating that the resolution plan approved five years ago is no longer viable. The Bench, headed by then CJI D.Y. Chandrachud, allowed the lenders' plea against the transfer of ownership of the grounded airline to Jalan Kalrock Consortium (JKC).

The Bench invoked its extraordinary powers under Article 142 of the Constitution for doing complete justice between the parties and ordered the appointment of a liquidator forthwith.

Liquidation and its Implications

It also ordered the forfeiture of Rs 200 crore infused by the JKC and directed lenders to invoke the Rs 150 crore Performance Bank Guarantee (PBG). The Committee of Creditors (CoC), led by the State Bank of India, had argued that the proposed revival plan was not in the best interest of lenders and questioned the National Company Law Appellate Tribunal (NCLAT) order upholding the resolution plan.

Earlier this year, the Supreme Court ordered JKC, the successful resolution professional bidder for the cash-strapped airline, to deposit Rs 150 crore in an escrow account jointly held by the State Bank of India and JKC. It warned of legal consequences if the JKC failed to furnish the bank guarantee.

The liquidation of Jet Airways has left the fate of its retail shareholders in limbo. At the current market capitalisation of Jet Airways at Rs386.69 crore, retail shareholding in the airline is around Rs74.6 crore. Retail shareholders held around 20 per cent stake in Jet Airways. Other major shareholders include Etihad Airways (24%) and the erstwhile promoters (25%).

The liquidation order has also led to the forfeiture of Rs 200 crore infused by the JKC and the invocation of the Rs 150 crore Performance Bank Guarantee (PBG). The appellate tribunal had accepted an undertaking given by the consortium committing to pay Rs100 crore by August 31 last year and another Rs100 crore by September 30, 2023.