Disputed Contractual Claims Fall Outside Section 60(5): NCLT Dismisses Jet Airways’ Liquidator’s Application for Refund of Advance Payments to Boeing
Jet Airways (India) Limited (through its Liquidator) v. The Boeing Company (I.A. 2737 of 2026 & I.A. 3221 of 2026 in C.P. (IB) No. 2205/(MB)/2019)
NCLT Mumbai Bench Coram: Shri Prabhat Kumar (Member, Technical) and Shri Sushil Mahadeorao Kochey (Member, Judicial)
Order dated 11.09.2026
Background
The dispute traces back to 2013, when Jet Airways (India) Limited entered into two Purchase Agreements with The Boeing Company for the purchase of Boeing 737-8 and 787-9 aircraft. Pursuant to these agreements, Jet Airways deposited advance/pre-delivery payments aggregating USD 92,129,387 with Boeing.
Jet Airways subsequently defaulted on certain payment obligations, prompting Boeing to issue a notice of suspension in May 2019. Jet Airways was admitted into CIRP the following month. During the resolution process, Boeing filed a claim of USD 275,333,451.69, which the erstwhile Resolution Professional admitted at a net figure, after accounting for the advance payments already received from Jet Airways which was Rs. 721.19 crore.
Boeing terminated the Purchase Agreements in December 2020, citing alleged material breach, without ever having delivered any aircraft. After the company moved into liquidation, the Liquidator called on Boeing to refund the full USD 92,129,387,arguing that these advance payments formed part of the liquidation estate under Section 36 of the IBC. Boeing declined, asserting a right of set-off.
The Liquidator filed I.A. 2737 of 2026 before the NCLT, Mumbai Bench, seeking a direction for refund. Boeing, in turn, filed I.A. 3221 of 2026 challenging the maintainability of the Liquidator’s application and asserting that the amount stood fully extinguished by set-off under Regulation 29 of the IBBI (Liquidation Process) Regulations, 2016.
The Tribunal’s Reasoning
The Tribunal’s analysis turned on three principal findings.
First, on the scope of jurisdiction under Section 60(5) of the Code, the Tribunal held that its residuary powers, while wide, are confined to questions of law or fact arising out of or in relation to the insolvency resolution or liquidation process. Relying on the Supreme Court’s ruling in Gujarat Urja Vikas Nigam Ltd. v. Amit Gupta and the NCLAT’s decisions in Ramchandra D. Chaudhary v. Bansal Trading Company and Pooja Bahry v. Uttar Pradesh Rajkiya Nirman Nigam Ltd., the Tribunal reasoned that this jurisdiction does not extend to adjudicating general civil or contractual disputes concerning uncrystallised, disputed claims particularly when the underlying agreements themselves were not even placed on record by either party, due to confidentiality concerns.
Secondly, on the disputed nature of the claim, the Tribunal found that the treatment of the advance payments, whether they were validly forfeited, set off, or remain refundable depended entirely on the terms of the Purchase Agreements and the Aircraft General Terms Agreement, neither of which was produced before it. Both parties had raised rival contentions and counter-claims, while the Liquidator argued that Boeing had already netted off the advances against its own claim and could not now retain them without contractual or legal justification, Boeing maintained that its admitted claim had already been accepted by the Resolution Professional and Liquidator, extinguishing any further liability. The Tribunal held that resolving this required interpretation of the contracts, evaluation of evidence, and a full-fledged trial which is not contemplated in the Code’s summary jurisdiction.
Thirdly, on forum, the Tribunal noted the parties’ rival submissions on governing law and forum non conveniens. Boeing’s position, was that the Purchase Agreements and the AGTA were governed by the laws of the State of Washington, USA,and therefore a US court would be more appropriate forum, and the Liquidator’s contention was that Boeing had submitted to the Tribunal’s jurisdiction by filing its claim and invoking Regulation 29. The Tribunal held that this question of jurisdiction and governing law was itself a matter for the competent court to determine upon evaluating the contract, and not something it could resolve in the present proceedings.
Understanding the Limits of Section 60(5) Jurisdiction
Section 60(5)(c) of the IBC confers on the NCLT a wide residuary jurisdiction to entertain or dispose of questions of law or fact arising out of, or in relation to, the insolvency resolution or liquidation of a corporate debtor. However, as the Supreme Court clarified in Gujarat Urja Vikas Nigam Ltd. v. Amit Gupta, this power is not unlimited and it does not extend to matters that fall outside the insolvency process altogether. A nexus with the insolvency of the corporate debtor must exist. Where a claim involves genuinely disputed questions of fact and law, particularly ones requiring interpretation of underlying commercial contracts, recording of evidence, or an assessment of set-off between the parties, the Tribunals have consistently held that such disputes must be resolved through a full civil trial or other appropriate forum, and cannot be shoehorned into the Code’s summary process. An equitable set-off, per the Supreme Court’s ruling in Bharti Airtel Ltd. v. Vijaykumar V. Iyer, is permissible only where the claim is genuine, quantifiable, and unquestionable and not where it remains contested.
Significance for Practice
The order underscores that a liquidator’s application under Section 60(5) for recovery of monies is not a substitute for a civil suit where the underlying claim is genuinely disputed and turns on the interpretation of commercial contracts that are themselves not on record. It reaffirms that IBC forums exist to adjudicate matters arising from the insolvency process itself, not to function as a parallel recovery mechanism for contested contractual dues which is a principle with particular relevance for cross-border commercial contracts involving foreign counterparties, governing-law clauses, and competing assertions of set-off.
