The National Company Law Appellate Tribunal (NCLAT) on Friday rejected the petitions challenging the liquidation of Go First Airways.
A coram of Chairperson Justice Ashok Bhushan and Technical Members Barun Mitra and Arun Baroka upheld the verdict delivered by the National Company Law Tribunal (NCLT) on May 10, 2023, on the grounds that it did not find any infirmity in the order.
The petitioners included Busy Bee Airways, which had earlier placed a bid for the airline, contending that the Committee of Creditors (CoC) decided to liquidate the airline before it could place a renewed bid.
On May 2, 2023, Go First filed a voluntary plea under Section 10 of the Insolvency and Bankruptcy Code (IBC), seeking admission to the Corporate Insolvency Resolution Process (CIRP). Admitting the application, the NCLT appointed a Resolution Professional (RP) to manage the airline’s affairs on May 10, 2023.
The airline’s lessors then approached the NCLAT, arguing that their assets had been unfairly retained under the moratorium, despite the termination of leases before the commencement of proceedings.
On May 22, 2023, the NCLAT upheld the NCLT’s decision and directed the lessors to seek clarification regarding the moratorium from the NCLT.
The lessors moved the Delhi High Court, urging the Directorate General of Civil Aviation (DGCA) to de-register their aircraft. The DGCA initially expressed reservations, citing the moratorium. On October 4, 2023, the Ministry of Corporate Affairs clarified that Section 14(1) of IBC would not apply to transactions involving aircraft, engines, airframes or helicopters.
The DGCA then submitted an affidavit before the High Court affirming that the exemption should apply to pending cases, however, it deferred action on Go First’s case on the grounds that the matter was sub-judice.
The High Court directed the DGCA on April 26, 2024, to de-register the airline’s fleet, which was completed by early May 2024. Maintenance and export of the de-registered aircraft were assigned to the lessors under Rule 32A of the Aircraft Rules.
In September 2024, the CoC filed an application for liquidation of the company on the grounds that there was no available aircraft and no viable revival options as well.
In October 2024, the NCLT raised apprehensions about permitting the company’s RP Shailendra Ajmera to be its liquidator. The tribunal also questioned whether this could give its seal of approval for third-party funding to pursue arbitration at the Singapore International Arbitration Centre (SIAC).
The CoC subsequently named Dinkar Venkatasubramanian as its liquidator, which the tribunal approved in its order.
On January 20, 2025, NCLT called for the liquidation of the airline.
Besides BusyBee, Bhartiya Kamgar Sena Mumbai, Captain Arjun Dhawan and others also challenged the NCLT order.
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