NCLAT rejects Go Airlines' plea

NCLAT rejects Go Airlines' plea

The bench notified that it found no reason to interfere with the NCLT order    

The National Company Law Appellate Tribunal (NCLAT) has rejected a plea by Go Airlines challenging an order of the National Company Law Tribunal (NCLT), Mumbai permitting the withdrawal of insolvency proceedings against Sovika Aviation Services.

Go Airlines was the operational creditor of Sovika Airlines who filed its claim learning about the insolvency proceedings. In September 2021, when the resolution professional (RP) was in the process of verifying the claims, NCLT allowed an application filed under the Insolvency and Bankruptcy Code (IBC) seeking withdrawal of Corporate Insolvency Resolution Process (CIRP) against Sovika.

(Under CIRP, the insolvency proceedings against a corporation can be withdrawn if the withdrawal application receives a 90 percent voting share from the Committee of Creditors (CoC).

The bench of Justice Ashok Bhushan (judicial member) and Dr Ashok Kumar Mishra (technical member) of NCLAT noted that the CoC had decided to withdraw the CIRP and found no reason to interfere with the NCLT order.

The tribunal also conveyed to Go Airlines that they were at liberty to resort to suitable legal proceedings before an appropriate authority with respect to their claim in the CIRP being denied.

The NCLAT stated, "The fact that the claim of the appellant (Go Airlines) has not been entertained in the insolvency resolution process, there shall be no bar for the appellant to take the appropriate legal remedy as permissible in law."

It clarified that the decision to dismiss the motion was not based on the merits of Go Airlines' allegations.

Senior advocate K Dutta along with advocates Ayush Beotra, Jay Zaveri, Amish Tandon and Uddhav Khanna appeared for the appellants.

The respondents were advised by senior advocate Ritin Rai advocate Lzafeer Ahmed.