Travel and tourism company Flycreative Private Ltd has sought to intervene in the ongoing insolvency proceedings involving grounded airline Go First at the National Company Law Tribunal (NCLT).
Flycreative, in its plea filed through lawyer Naman Joshi, has claimed Rs 5.7 crore from Go First stating that it has paid Rs 4.5 crore towards group bookings and the release of its Rs 1.2 crore credit shell. Flycreative has contended that the amount stuck with Go First was a government loan that it had availed through the Emergency Credit Facility Scheme to revive the company after the Covid-19 pandemic.
According to the application filed by Flycreative, the airline had taken money from them towards group bookings for travel in May despite being aware of the fact that they were going to file for voluntary insolvency resolution process. Notably, the airline has remained grounded from May 2, 2023.
The NCLT is likely to hear the Go First batch of cases on December 1.
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. On May 22, the NCLAT upheld the NCLT order and asked the lessors to file an appropriate application at the NCLT for clarification on the applicability of the moratorium on the aircraft.
The lessors accordingly moved the NCLT seeking exemption from the moratorium, and asked it to injunct the airline from using them. However, the NCLT refused to pass such an order and refused to permit them to inspect or maintain their assets. The lessors approached the NCLAT against this order, but the appellate tribunal modified the order only to the extent of permitting the lessors to inspect their assets.
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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