NCLT Orders Go First Airways Liquidation After Request From CoC

NCLT Orders Go First Airways Liquidation After Request From CoC

The decision was taken after facing a lack of aircraft and no viable revival options

The National Company Law Tribunal (NCLT) has ordered the liquidation of Go First Airways.

The bench of Mahendra Khandelwal (Judicial Member) and Dr. Sanjeev Ranjan (Technical Member) confirmed the decision after a request from the airline's Committee of Creditors (CoC).

The air carrier filed a voluntary plea on 02 May 2023, for admission to the Corporate Insolvency Resolution Process (CIRP) under Section 10 of the Insolvency and Bankruptcy Code (IBC).

The plea was admitted on 10 May by appointing a Resolution Professional (RP) to manage the airline's operations.

Thereafter, the airline's lessors appealed before the National Company Law Appellate Tribunal (NCLAT), challenging the moratorium that prevented them from reclaiming the assets, despite the termination of leases before the proceedings began.

On 22 May 2023, the NCLAT upheld the NCLT's ruling and directed the lessors to seek clarification on the moratorium.

Subsequently, the lessors approached the Delhi High Court to deregister the aircraft.

While the Directorate General of Civil Aviation (DGCA) initially resisted the move, on 04 October 2023, the Ministry of Corporate Affairs clarified that Section 14(1) of the IBC did not apply to transactions involving aircraft and related assets.

Thus, by May 2024, the DGCA agreed, and the fleet was deregistered and maintenance and export of the aircraft transferred to the lessors.

Lack of aircraft and no viable revival options forced the CoC to opt for liquidating the airline and filed the application last September.

Earlier, the NCLT expressed concerns about appointing Shailendra Ajmera as liquidator but later approved Dinkar Venkatasubramanian.

The CoC was represented by advocate Vishnu Sriram and Diwakar Maheshwari guided the Resolution Professional.