In a significant ruling, the National Company Law Appellate Tribunal (NCLAT) has rejected an appeal filed by the State Bank of India (SBI), confirming that former Jet Airways employees are entitled to receive their full provident fund, gratuity, and pension dues. This decision provides crucial relief to the airline's staff as Jet Airways undergoes liquidation proceedings.
The appellate tribunal, in its judgment delivered on June 30, 2026, upheld that these statutory dues payable to workmen and employees must be paid in full and are to be excluded from the general liquidation estate. This means these funds will not be subject to distribution among other creditors, including banks.
A bench comprising Chairperson Justice Ashok Bhushan and Technical Member Barun Mitra also directed the liquidator to recompute workmen’s dues for a protected 24-month period. The tribunal ruled that 1,656 days spent in litigation during Jet Airways' corporate insolvency resolution process must be excluded from this calculation, ensuring that the workmen's dues for this period are not treated as nil.
The ruling stems from appeals related to an order passed by the National Company Law Tribunal’s Mumbai bench in February 2026. Employees have claimed that their total dues, including provident fund and gratuity, exceed ₹275 crore.
SBI had argued before the NCLAT that the exclusion of provident fund and gratuity dues from the liquidation estate should only apply if Jet Airways had maintained separate and identifiable funds for these purposes, which the bank contended the airline had not. Therefore, SBI asserted, these dues should be treated like other workmen’s claims within the normal liquidation pool.
However, the NCLAT firmly rejected SBI’s interpretation, stating it was contrary to the spirit and text of the Insolvency and Bankruptcy Code (IBC). The tribunal clarified that the IBC's provisions are "due-centric" and not "asset-centric," meaning the exclusion of sums due to workmen from provident, pension, and gratuity funds is not contingent on the physical existence of such separate funds at the liquidation commencement date. The tribunal emphasized that accepting SBI's argument would unjustly deprive employees of their rightful entitlements earned through years of service.