NCLAT upholds NCLT order admitting Go First's insolvency proceedings

National Company Law Appellate Tribunal (NCLAT) on Monday upheld crisis-hit Go First airline’s insolvency ordered by National Company Law Tribunal (NCLT) and directed for certain modifications to tribunal's order. NCLAT refused to allow lessors to take back possession of aircraft and asked them to move NCLT for any remedy in Go First insolvency proceedings matter.

The lessors were opposing the NCLT judgement, which had gone in favour of Go First, and given a go-head for Interim Resolution Professional (IRP) and interim moratorium.

On May 10, the NCLT admitted Go First's plea for voluntary insolvency and admitted for the initiation of Corporate Insolvency Resolution Process (CIRP) proceedings. NCLT has granted Go First protection under a moratorium from recovery by lessors and lenders.

"The order dated May 10, 2023 allowing insolvency is upheld," said the NCLAT bench headed by Chairperson Justice Ashok Bhushan on Monday.

The direction came on a batch of four petitions filed by aircraft lessors opposing Go First's insolvency proceedings. The lessors are SMBC Aviation Capital Ltd, GY Aviation, SFV Aircraft Holdings and Engine Leasing Finance BV (ELFC).

US-based jet manufacturers Pratt and Whitney (P&W) has defended itself against the budget airline's claim that P&W is responsible for the financial condition and bankruptcy.

Last week, Go First extended the suspension of flight operations till May 26, citing operational reasons and expressed hope that it will be able to resume bookings shortly.

Go First, which is undergoing insolvency resolution proceedings, stopped flying from May 3. Further, aviation regulator DGCA had directed the cash-strapped airline to stop bookings till further orders.