NCLT orders liquidation of budget airline Go First

The National Company Law Tribunal (NCLT) ordered the liquidation of budget carrier Go First Airways on Monday. The airline had first filed a plea seeking admission to the Corporate Insolvency Resolution Process (CIRP) under IBC in May 2023. The NCLT had admitted the application a few days later, and appointed a Resolution Professional (RP). 

“Liquidation is ordered," said a bench of NCLT comprising Judicial Member Mahendra Khandelwal and Technical Member Dr Sanjeev Ranjan allowing the liquidation application filed by the Committee of Creditors (CoC) of the airline, as per a report by Bar and Bench. 

A detailed copy of the order is awaited, as per the report. 

The airline’s lessors had appealed to the National Company Law Appellate Tribunal (NCLAT) arguing that their assets have been unfairly retained under the moratorium even though proceedings to terminate the leases had already begun. However, the NCLAT upheld NCLT’s decision and directed the lessors to seek clarification regarding the moratorium. 

In October 2023, the Ministry of Corporate Affairs clarified that IBC would not apply to transactions involving aircraft, engines, airframes or helicopters. Before that, the Directorate General of Civil Aviation (DGCA), whom the lessors had approached through the Delhi High Court had resisted deregistering the aircraft, citing the moratorium. 

The DGCA was ordered by the Delhi High Court to deregister the airline’s fleet, which was completed by May 2024, the report stated.