NCLT approves liquidation of Go First Airways amid insolvency crisis

The NCLT has ordered the liquidation of Go First on a plea filed by the airline's Committee of Creditors; airline faced insolvency proceedings since May 2023 with no revival options

The National Company Law Tribunal (NCLT) on Monday ordered the liquidation of budget airline Go First Airways, according to a report by Bar and Bench.

 

A Bench of NCLT, led by Judicial Member Mahendra Khandelwal and Technical Member Dr Sanjeev Ranjan, granted the liquidation petition filed by the airline’s Committee of Creditors (CoC).

 

Go First filed a voluntary plea under Section 10 of the Insolvency and Bankruptcy Code (IBC) on May 2, 2023, requesting admission to the Corporate Insolvency Resolution Process (CIRP). The NCLT admitted the plea on May 10 last year and appointed a Resolution Professional (RP) to oversee the airline’s operations.

 

In response, the airline’s lessors contested the decision before the National Company Law Appellate Tribunal (NCLAT), arguing that their assets had been unjustly retained under the moratorium despite leases being terminated before the insolvency process.

 

On May 22, 2023, the NCLAT upheld the NCLT's ruling, instructing the lessors to seek further clarification on the moratorium from the NCLT.

 

The lessors then approached the Delhi High Court, urging the Directorate General of Civil Aviation (DGCA) to deregister their aircraft. Initially, the DGCA declined, citing the moratorium. However, on October 4, 2023, the Ministry of Corporate Affairs clarified that Section 14(1) of the IBC would not apply to transactions involving aircraft, engines, airframes, or helicopters.

 

The DGCA subsequently filed an affidavit with the Delhi High Court, confirming that the exemption would apply to pending cases but postponed action on Go First’s deregistration due to the ongoing legal proceedings.

 

On April 26, 2024, the Delhi High Court directed the DGCA to deregister Go First’s fleet, a process completed by early May 2024. The lessors were assigned the responsibility for maintenance and export of the deregistered aircraft, according to Rule 32A of the Aircraft Rules.

 

With no operational aircraft and no feasible revival options, the CoC decided to liquidate the airline in September 2024 and filed the liquidation application. In October 2024, concerns arose regarding the appointment of the company’s Resolution Professional (RP) Shailendra Ajmera as the liquidator. Consequently, the CoC appointed Dinkar Venkatasubramanian as the new liquidator.