The National Company Law Tribunal (NCLT) on January 22 deferred the hearing of low-cost airline Go First's insolvency plea to February 29, 2024.
The hearing was deferred after NCLT declared half a day holiday on January 22, owing to the 'Pran Pratishta' ceremony at Ayodhya Ram temple. It may be noted that the last effective hearing in the case took place in November 2023, where the tribunal extended the corporate insolvency resolution process by 90 days ie. till February 4, 2024.
According to the Insolvency and Bankruptcy Code (IBC), 2016, a resolution process must be completed by 180 days and the NCLT has the power to extend the period for completing the resolution process to a maximum of 330 days. If there is no resolution to a company's insolvency even at the end of 330 days, the NCLT has to order liquidation of the company. On February 4, the airline would be under the resolution process for 270 days.
Background to the case
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 the moratorium.
The lessors also moved the Delhi High Court against the Director General of Civil Aviation (DGCA) to de-register their aircraft. Delhi High Court is yet to conclude the hearing of the case.
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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