The National Company Law Appellate Tribunal has dismissed a plea by the State Bank of India challenging the priority payment of provident fund and gratuity dues to former Jet Airways employees during the airline’s liquidation.
In a judgment delivered on June 30, a bench comprising Chairperson Justice Ashok Bhushan and Technical Member Barun Mitra upheld a February 2026 order of the National Company Law Tribunal’s Mumbai bench, which had directed the liquidator to pay these statutory dues in full and treat them as separate from the liquidation estate.
SBI and other lenders had argued that the exclusion should apply only if Jet Airways maintained separate, identifiable provident fund and gratuity accounts, which the airline had not done. The NCLAT rejected this reading of the Insolvency and Bankruptcy Code, holding that the relevant provisions are “due-centric” and not “asset-centric.”
The tribunal said accepting SBI’s interpretation would “negate the right and entitlement of the workmen and employees to their provident fund, gratuity fund and pension fund which they have earned due to their continuous service rendered to the Airways.”
The bench also directed the liquidator to recompute workmen’s dues for the 24-month window preceding the liquidation commencement date of November 26, 2024, after excluding 1,656 days spent in litigation during Jet Airways’ insolvency resolution process.
Employees have said their combined outstanding dues, including provident fund and gratuity, exceed ₹275 crore, according to a CNBC-TV18 report; this figure has not been independently confirmed by the tribunal or the liquidator.
The tribunal did not extend the same protection to wage arrears for January to March 2019, ruling that these claims must be settled through the IBC’s waterfall mechanism applicable to employee dues, alongside other creditor claims.
The ruling follows the NCLAT’s own 2022 order in the Jet Aircraft Maintenance Engineers Welfare Association case, where it had similarly directed the resolution applicant to pay unpaid provident fund and gratuity dues in full, and cites the Supreme Court’s decision in Sunil Kumar Jain vs Sundaresh Bhatt.
Jet Airways entered liquidation in November 2024 after the Jalan-Fritsch consortium’s resolution plan collapsed. The order adds to a small but growing body of tribunal rulings treating employee provident fund, gratuity and pension dues as protected claims outside the liquidation estate, a precedent that HR and compliance teams at companies undergoing insolvency proceedings are likely to track closely.
