On May 10, the National Company Law Tribunal (NCLT) granted Go First’s insolvency petition. The moratorium will take effect, which will be a relief to Wadias. Insolvency specialist Abhilash Lal has been selected.
According to the NCLT judgment, the prior management must pay Rs 5 crore for IRP charges. IRP will be required to keep the firm operating as a continuing concern. The suspended management was urged to provide any help required by the IRP to keep the airline running.
“The IRP has been directed to proceed with all necessary steps, including the execution of the Arbitral Award, to keep Go Airlines as a ‘going concern’ and to ensure the smooth operation of its services.” Furthermore, the NCLT has urged the IRP to ensure that employee retrenchment is not used as a matter of course and that any such decision/event be brought to its notice immediately,” the ruling stated.
In response to the judgment, a DGCA spokesman stated that because the NCLT has now allowed the airline’s bankruptcy plea, none of the demands to deregister and export GoFirst’s aircraft will be approved. Lessors’ requests for re-registration will be considered following the insolvency case.
“This is the best possible outcome for the airline.” The plan of action will now involve IRP to negotiate refunds and flying resumption. “Our job was to ensure that the airline did not go down and did not lose its aircraft; now everything is in the hands of IRP,” GoFirst CEO Kaushik Khona stated.
On May 8, the airline requested that the tribunal issue orders in its bankruptcy, claiming that lessors were seizing ownership of the aircraft even while the NCLT had seized of the matter. “We are not being allowed access for maintenance work,” stated the airline.
After hearing arguments from GoFirst and aircraft lessors, the tribunal deferred the issue for judgment on May 4.
Ajay Shaw, Partner at DSK Legal, commented on the ruling, saying, “This is a move done with the intent of protecting the airline from losing the substratum in this case, namely the aircraft, as, without the aircraft, business would be grounded and resolution as a going concern would be problematic.” However, this will be a major problem for lessors in this area because the moratorium will limit their rights to repossess.”
Throughout the four-and-a-half-hour hearing on May 4, senior lawyer Neeraj Kishan Kaul, who represented the airline, maintained that the company is seeking an interim moratorium only if the tribunal is not inclined to accept the insolvency petition immediately.