Jet Airways Staff Get Relief: NCLAT Rejects SBI Plea, Orders Full PF, Gratuity, And Pension Dues For Employees

The National Company Law Appellate Tribunal (NCLAT) has upheld an order regarding payment of dues to Jet Airways employees and workmen following the company’s liquidation in 2024. The decision is a major relief for the employees after a seven-year legal struggle, and a setback for the State Bank of India (SBI) and other financial creditors, who had sought to include these dues in the general liquidation estate. However, in the judgment on June 30, a bench of Justice Ashok Bhushan and technical member Barun Mitra rejected SBI’s appeal and directed the liquidator to pay the full provident fund (PF), gratuity, and pension dues to Jet Airways former employees.    

Note that Jet Airways operated its last commercial flight on April 17, 2019, and shortly after that, it suspended its operations and filed for bankruptcy. To revive the airline, Jalan-Kalrock Consortium, a group formed by businessman Murari Lal Jalan and asset management firm Kalrock Capital, filed and won a bid to take over and revive it. The financial and operational obligations were determined, but the consortium failed to implement the approved resolution plan. At last, in November 2024, the Supreme Court ordered the liquidation of Jet Airways, ending all hopes of revival.

Following the liquidation, the lenders sought to include employees’ dues under the liquidation estate along with the claims of other creditors. They contended that PF, gratuity, and pension dues should be distributed among all creditors under the Insolvency and Bankruptcy Code (IBC) and further added that these dues could only be excluded if dedicated funds were established at the start of the liquidation process.

The appellate tribunal, however, rejected their arguments and dismissed the appeal. It ruled that statutory dues of the employees will remain outside the liquidation estate, clarifying that these dues need to be paid in priority over other claims of creditors.

The Tribunal not only protected employees’ PF and gratuity payments, but also upheld a February 4, 2026, order by the National Company Law Tribunal (NCLT). In this order, NCLT set May 20, 2020, as the effective date for calculating employees’ 24 months' dues that are entitled to priority under the IBC.  

While the lenders tried to include the period spent in litigation in this 24-month window, pushing many employees to lose their priority status for payment, the appellate tribunal upheld the NCLT order, protecting several employees from losing their dues.  

This ruling is expected to provide relief to around 11,800 workmen, along with other former staff members involved in the liquidation process. According to employee groups, the total outstanding PF and gratuity dues would come out to roughly Rs 265 crore.

Dr Narayan Hariharan, former senior vice president of Jet Airways and current advisor to the Staff and Officers Association, calls the verdict a ‘landmark decision’, bringing attention to the plight of the employees who had to fight such a prolonged and complex legal battle to get their social security.