Stating that the grounded airline Go First has approximately 8000 operational creditors globally, the Resolution Professional (RP) filed an application at the National Company Law Tribunal (NCLT) to appoint a representative for all operational creditors.
There are two kinds of creditors under Insolvency and Bankruptcy Code (IBC), 2016. Operational creditors are those who to whom the company owes money for availing goods and services from them for operations. Financial creditors are banks and other financial institutions that have lent money to the company.
Lawyer Diwakar Maheshwari, who appeared for the RP contended that it would become very difficult to respond to the claims by operational creditors if they approach the RP all at once, hence they require a representative. Maheshwari further argued that the Insolvency and Bankruptcy Code (IBC), 2016 provides for appointment of such representatives.
The NCLT questioned the RP on whether such an order could be passed without giving notice to the operational creditors, and urged him to make them a party in the application. The RP however contended that such an order could be passed without giving notice to the operational creditors.
The application will now be considered further on December 1.
Claimant says 'no response from RP'
Captain Nimit Ailwadi, who contended he had filed a claim with the RP in June 2023, stated that he has not received any response from RP till date. Ailawadi sought for NCLT's directions to know the status of the claim.
NCLT has sought for Go First's response to the application. The case is likely to come up now on December 1.
On the last date of hearing, a travel agent called Flycreative filed a plea to intervene in the proceedings stating that the airline owes it Rs. 5.7 crore.
Go First insolvency at NCLT
On May 2, 2023, Go First filed a plea in the NCLT under Section 10, asking to be admitted to the Corporate Insolvency Resolution Process (CIRP) voluntarily. On May 10, the NCLT admitted Go First’s insolvency plea, and appointed a Resolution Professional (RP) to run the affairs of the company.
However, Go First’s aircraft lessors filed an appeal against the NCLT order in the National Company Law Appellate Tribunal (NCLAT) stating that their assets had unfairly been taken from them as they had terminated the leases before moratorium.
The corporate affairs ministry, meanwhile, issued a notification exempting aviation leases from the moratorium. This, coupled with a change in the bench, led to the case being deferred.
However, in what could be considered a blow to the Go First revival plan, the Director General of Civil Aviation (DGCA) filed an affidavit in the Delhi High Court clarifying that the notification exempting aviation leases from moratorium under the Insolvency and Bankruptcy Code 2016 should apply to pending cases as well.
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