 "Go First")
The National Company Law Tribunal (NCLT) on Thursday extended the insolvency process of grounded airline Go First by 90 days.
The extension will take effect from November 6 this year and end on February 4 next year.
Dismissing the airline’s lessors’ objections to the extension, the NCLT said the resolution plan should be completed within the stipulated period.
The tribunal has asked the resolution professional (RP) of the airline to submit a 90-day action plan.
Contesting the lessors’ arguments, the RP told the court the decision of extension was within the Committee of Creditors’ (CoC’s) remit, and the lessors did not have the locus standi to oppose it.
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The lenders are part of the CoC.
The lenders to the airline, which includes Bank of Baroda, Central Bank of India, and IDBI Bank, supported the insolvency process extension.
According to Section 12(1) of the Insolvency and Bankruptcy Code (IBC), insolvency resolution shall be completed within 180 days from the date of admission of the application to initiate such a process. The Adjudicating Authority may grant a one-time extension of 90 days. The maximum time allowed is 330 days.
The extension comes as a relief for Go First, which is in a legal battle over the control of its aircraft with its lessors since May this year. The final blow to the airline’s revival came when the Ministry of Corporate Affairs on October 3 issued a notification, exempting arrangements related to aircraft, aircraft engines, airframes, and helicopters from the moratorium under Section 14(1) of the IBC.
The airline, meanwhile, had obtained an expression of interest from one prospective resolution applicant, who has until November 21 to give a resolution plan.
The RP said if no resolution plan was given till then the airline would initiate a fresh bid process.
The tribunal told the RP if the insolvency process was not completed within the new timeframe, it might start liquidation proceedings.
Jindal Power was initially interested in the bid for the airline but did not follow through with it after evaluating the airline’s financial statements.
The RP had told the NCLT earlier claims worth Rs 28,558 crore had been received by the creditors. Of those, 19 per cent have been admitted and the rest are under verification.
Advocate Diwakar Maheshwari, appearing for the RP, had told the tribunal in the earlier hearing there were about 8,000 operational creditors globally, and they were moving an application so that the NCLT could appoint a representative for all such creditors.
